JF2364: How To Go From A Commission Chaser To A Problem Solver With John Chin #SkillsetSunday

John cut his teeth as a traditional real estate broker. He escaped the “hamster wheel” of chasing sales thanks to a mentor who put him on the fast track to investing. That paradigm shift made him see licensed agents as problem-solvers for homeowners rather than just salespeople.

Now John teaches real estate agents how to leverage their license into creating 8-10 various income streams as opposed to relying on commission alone. In this episode, he talks about his lead intake process that helps licensees make the most out of their leads.

John Chin Real Estate Background: 

  • John and Ron are the founders of Investor Agent
  • Together they have done 2,800 rentals and flip properties (mostly short sales, foreclosures, and REOs)
  • Closed over $260 Million in residential investments
  • He currently manages over 470 cash flow rentals
  • Based in Orlando, FL
  • Say hi to him at www.investoragent.com 

Click here for more info on groundbreaker.co



Best Ever Tweet:

“You’ve got to look at your listing as just one tool in your tool chest. It’s not the main driver of your business ” – John Chin.


Theo Hicks: Hello, Best Ever listeners, and welcome to the best real estate investing advice ever show. I’m Theo Hicks, and today we’ll be speaking with a repeat guest, John Chin. John, how are you doing today?

John Chin: I’m doing awesome, man. Thanks for having me again.

Theo Hicks: Yeah, no problem. Thanks for taking the time to speak with us. And today being Sunday, we’re going to be doing a Skillset Sunday. We’ll talk about a specific skill set that can help you in your real estate business, and we’re going to talk about how you can go from being a real estate agent who chases commissions to being a real estate agent wolf. John’s going to explain what that means, where the word wolf comes from, because he told me a really funny story before we got on. I want him to tell again where it came from, to have this concept hit home for you. Before we get into that, a refresher on John’s background.

He is the founder of InvestorAgent, and InvestorAgent has done 2800 rentals and flips, mostly short sales, foreclosures, and REOs, closing over 260 million dollars in residential investments, and currently manages over 470 cashflow rentals. He’s based in Orlando, Florida, and the website is investoragent.com. So John, do you mind telling us a little bit more about your background and what you’re focused on today?

John Chin: Yes. I cut my teeth in traditional residential real estate brokerage. Then, like a lot of us who end up in the investment business, where we’re flipping houses, buying rental properties, building cash flow portfolios, and serving investors to do the same thing, there was a pivotal relationship in our past – we met somebody, and they kind of set us on a fast track of doing deals, and kind of got us off of that. We call it the sales hamster wheel, where you are in perpetuity unemployed and chasing the next closing or closings. So I was fortunate enough to have that kind of relationship, and pivot the trajectory of my real estate career to actually doing deals, and then using my license as a way or just a tool to solve problems for sellers. So it’s kind of a paradigm shift.

That whole wolf story came from Pulp Fiction, where we kind of liken ourselves to one of the characters in Pulp Fiction, Mr. Wolf. Anybody who’s listening who saw that movie, there was that accident in the back of the car, they ended up at Quentin Tarantino’s character’s house, and he was going through the roof, he was upset because he had a dead person in his garage… So the boss guy sent his problem solver to the house to fix that problem, and his name is Mr. Wolf. He shows up in the tuxedo at the front door, and he says, “Hi, I’m Mr. Wolf. I solve problems.” And he comes in and cleans up the whole situation. So that’s what we kind of do for sellers.

I think the biggest paradigm shift I had that helped me transform from being somebody who just tried to chase more closings and more listing and buying commissions, to somebody who was actually building wealth, was the paradigm shift from being a salesperson to being a true problem solver for homeowners or property owners. This means that you go from only being able to make money one or two different ways as a licensed salesperson, to actually being able to make money maybe eight to 10 different ways on a property, while solving problems for homeowners that are a little bit more flexible, that most licensed agents can’t do. So you end up making more money, you end up getting more deals for yourself, and you end up solving more problems for sellers.

Theo Hicks: Perfect. Then you were talking about in order to start this process of solving the homeowner’s problem is to properly doing the seller intake. You talked about a form that you have, that people use. Can you explain at what point of the process is this used? Is it when I find a lead? And then maybe tell us what people usually do if they’re not doing seller intake.

John Chin: If you get into the mind of a traditional licensed agent who’s working what we call the retail business,  that’s all they do exclusively – they work with buyers and they work with sellers. When you talk to a homeowner in that space, what you’re trying to do is turn that phone conversation into a listing presentation or an appointment at the seller’s house or at your office to list their property. And to do a CMA form a lot of times, you do your formal listing presentation… Basically, how I can help you sell your house as quickly as possible, for the highest net proceeds as possible, that’s kind of the goal.

Everybody heard the expression, if you’re a hammer, everything looks like a nail. Well, everybody looks like a nail to a licensed commission salesperson who’s just trying to do that all day. So we bring in this process like the number one thing that helps you shift from being a commission earner to being a problem solver dealmaker is when you do that initial intake call a little bit differently.

So if you just do this one thing really well, number one, you’re going to look a lot different to that seller… Because most people aren’t coming to them as an advisor/consultant capacity. What they’re really trying to understand from that seller, “Look, you’re at point A right now and you’re trying to get to point B in your life, and your house is a mechanism to help you get there.” That’s the difference, the way you’re looking at that situation with the seller, as opposed to somebody who says, “Okay, I know you’re just trying to sell your house as quick as possible, for as high proceeds as possible.” That conversation looks different than the former. So if you do a proper, what we call a lead intake consultation with the seller… And this is the template that we use. I’ll kind of walk through what we’re trying to accomplish in that template. But it’s just a different line of questioning.

If you follow that line of questioning in a specific chronology or a specific order, then number one, you’re going to sound like a consultant, a lot different than most agents, because you’re really trying to get deeper into the life situation of the seller. Then the house just becomes a tool or a mechanism to help them get from point A to point B.

Theo Hicks: That makes sense. Let’s talk about this lead intake consultation form. So just explain, if you’re on the phone with the seller, do just read straight through it? Or is there I guess a script that you do? Or is it like, if they say this, then you say this, like a logic tree type of deal? How does it tactically work?

John Chin: Okay, so it’s a worksheet. And I always have a paper copy printed up, and it’s a front and back worksheet. So I literally can just print one up and I can fill out the front and I can fill in the back. All of the students that we work with, our trainees and our licensed agents that we support, they literally fill this out, take a picture of it, the front and the back, and then they can send it off, and now we can huddle to figure out how to best solve a problem or turn that into a deal. Or maybe it’s a better short sale listing, or maybe it’s a better traditional listing… But the sheet helps you get there, to that if-then prognosis, if you will.

So to answer your question, you just start at the top of the sheet, you go down and you just fill in the blanks. Now, the blanks just prompt you of the type of information you want to ask. As you get skilled at using the sheet, the second and third-level type questions will follow the answers you get from just the blanks. In other words, the sheet serves as a wedge for you to get what we call first-level answers from these sellers.

For example, I could ask you, “Why are you selling the property?” and someone says “Well, because I just evicted the tenant. The place is kind of trashed, and I want to get rid of it now”, for example. Well, then I don’t just stop there, even though the sheet just prompts me to find out why they’re selling. What I want to do is then go second and third level, because that’s where the juice is, that’s where you get the real nuggets that are going to help you find out what the true problem is for that seller, and help you monetize that deal.

In that situation, it would prompt me then to not just leave it with that answer, but then for me to ask, “Well, tell me about that experience with your last tenant. What happened there? How’d you end up getting that as a property, as a rental?” So all kinds of solutions come out of the info you get when you go second and third level with the sellers.

It’s a huge paradigm shift, because most people want to just get facts. And a lot of investors too, they want to just get facts, because they want to get to understand is there equity in this house? Or is there no equity in this house? They just want to go for the jugular and they take five to 10 minutes, because they’re spending more time qualifying than they are actually trying to solve a problem for somebody.

So that’s the benefit of what we do as licensees are. We have so many tools in the tool chest; you’ve got to look at your listing as just one tool in the tool chest. It’s not the main driver of your business, for example. That’s the major shift from people who are on the hamster wheel to actually evolve into problem solvers and dealmakers. But you could almost look at this sheet as a marriage between what cash investors who are looking for motivated seller leads, what they do on the phone, combined with what your typical licensee does on the phone with the seller.

You combine the two because they both offer unique solutions that they both bring to the table. But even your cash investor who talks to motivated sellers – they’re a hammer too, because all they’re trying to do in most cases, they’re trying to find out how much equity you have, build rapport, and then make a lowball offer and throw a bunch of spaghetti against the wall with maybe 15 to 20 sellers to get the deal or the discount they want. Well, if you’re a licensee and you take a consultative of approach, you can monetize maybe three or four of those out of 15 or 20, as opposed to just one out of 15 or 20. That makes sense.

Theo Hicks: Yeah. So is that where the eight to 10 different ways of making money comes from? You’re going to have a higher success rate? Or are you saying that there are eight to 10 different ways to make money on a particular deal?

John Chin: Both. So the former is what we emphasize, because of the latter. In other words, because you’re able to solve a problem a few different ways with the seller, there could be two or three ways to make money with the seller. Now there’s only one ideal way that’s a happy marriage or medium between what they’re trying to accomplish in life and the profit motive you may have as a real estate professional. So you want to find that one highest and best answer, if you will. If you’re able to have multiple ways to do that and there’s a highest and best answer, then to the latter point there, you can take more leads and turn more leads into deals.

So if you’re concerned, like a lot of us are, about our lead generation spend… Because you know, depending on where you are on the spectrum – if you’re a cash buyer, you’re spending anywhere from low competitive market $50 to $100 per paid lead, up to $200 or $300 per paid lead. If you’re in the retail sales space, you’re spending anywhere from 20 bucks a lead, five bucks a lead, on up to $100 or $200 a lead, too. So if you’re in a business that you’re trying to scale, and you’re sensitive about your lead gen cost, then you want to take as many of those leads and monetize as many of those leads as possible. Well, if you’re a hammer and you only have that one solution, whether it’s on a cash buyer side or on the listing side, you can’t monetize many of those leads. So it’s both.

Theo Hicks: Got it. I wanted to circle back to that… But I first want to hit on what’s actually on the form. I don’t want you to walk us through every single question, but what are some of the ones that are pretty unique, that maybe people don’t typically think about asking?

John Chin: Okay, let me give you the overarching philosophy here. We call it the four Ps. When you’re using the form, what the form does in two pages with about 50 different questions, or lines of questions, or fields that you have to fill in – what that does is it actually just answers or addresses four Ps that we’re trying to uncover. The first two Ps – and I’ll break them down, because it’s an acronym for four different things that you’re trying to uncover. The first two Ps you get done in the first few minutes of the phone call, and that’s “Is it a property type that I can deal with?” In other words, if you don’t do vacant land, then you don’t have solutions for vacant land or commercial properties, then you want to qualify that right upfront. It’s kind of a knockout question.

Second thing is, “Are you talking to the person,” that’s the second P, “who has control of that property? Are they entitled to the property? Or are you talking to a friend of the owner?”, for example. So you have to not waste your time and obviously address those right up front. Those are the two easy ones.

The second two Ps are a little bit more in-depth. And the sheet – it does a couple of things. Number one, because of this line of questioning, it allows you to build rapport with somebody by virtue of your seeking to understand them with a line of questioning they’re not used to from commissioned salespeople. You build rapport with them and it helps you agitate some pain and urgency, because you have to break this inertia of them doing nothing with their property, to get them to act… And that involves people getting emotional, and getting into what we call that negative fantasy that keeps them up at night when they’re worried about what this property, if they don’t get rid of it, is going to do to them in life.

The second two Ps are pain and profit. That’s what really takes up the bulk of the sheet. The magic behind the methodology is the profit is self-evident, it’s obvious. If I want to find out what kind of profit potential I have on this as a dealmaker, then I’ve got to understand what the cashflow opportunity is, are they willing to leave the loan in place, for example, on a subject-to acquisition? Is there potential, because they don’t need to sell it right, now for us to lease option it? What would the spread be between what market rent is and my carry costs on the property if I was going to structure something like that for a cash flow deal, for example?

So the profit potential, that line of questioning gives you permission and helps you build rapport naturally, and gives you the actual facts that you need to determine if there’s profit potential from a cash flow perspective and/or equity position.

Then the other P is pain, or urgency. The questions are designed so that you want to agitate the pain to build the urgency to get them off the couch, for example, to actually take action, whether that’s getting the property listed or getting it under contract. You have to agitate that pain, because if you’re going to get a deal, people only leave equity or cash-flowing deals if they’re making an emotional decision, so you have to stir the emotion. And that’s where I think people fail the most.

Our typical lead intake is going to take anywhere from 30 to 45 minutes, assuming we know the first two Ps we have checkmarks with – they are in control of the property and it is the type of property that we want to deal with, that we can monetize. If we know those first two Ps, then the rest of the conversation should take about 30 to 45 minutes if you’re doing it correctly. I’ll tell you that when it relates to the pain portion of the questionnaire, the type of questions that elicit that pain and agitate the emotions to get them to take action – I’ve asked somebody what they want to get for their property on the front end of the phone call, and I’ve compared it to what I can get them to sell their property for at the end of the phone call. It’s like a 10 to $15,000 difference, just by virtue of making that pain front of mind for them.

I’ll give you an example, coming back to your initial question, what are some questions on here that maybe somebody doesn’t ask; or maybe they do ask, but they don’t take it third level. So for example, somebody says they just inherited the house. You’re going to see a lot of that; we have two million houses in the probate pipeline with the boomers dying off right now. There’s a lot of heirs or siblings that don’t want to contend with those properties. If you’re talking to somebody, for example, who just inherited a house, they’re in another state, and they’re trying to unwind the legacy of this property owner, their deceased family member, or parent… And they’re telling you that that is how they have the property. Then what I’m not going to do is just leave it there. I’m going to say, “Well, what happens if you can’t sell it? Who’s helping you with this probate case, or to help liquidate all these assets?” And then they’re going to tell me — I’m going to uncover more of their pain and more of their situation that is going to be more agitating to them. So it’s not even the questions on the sheet, it’s kind of the mindset you have. The sheet gives you permission to go second and third level to agitate pain, to get them to take action.

Theo Hicks: Very interesting. You mentioned that once this sheet is completed, then what are the next steps? It sounds like for you, you have people that use this and they can kind of come back to you and your program and talk through it. What about people who don’t have access to this? What should they do once they’ve finished out their intake?

John Chin: That’s a good question. So as you evolve as a licensed agent, [unintelligible [00:18:55].07] having somebody you can link into that can help you put all this information together into a practical solution. I’ve never had that question before, because the people that we work with, we work with on a consistent basis. They’re around the country; so I don’t want to get into a pitch here, but… If you don’t have somebody that can help you put those tools together, I guarantee you the way you find them is you can just do on Google and find people who are spending big money for leads like this, that have dealt with sellers in urgent situations. So if you’re a licensee and you want a quick low-hanging fruit way to find those people, you can go to your local REIA meetings and find somebody who helps people with different deals, that does coaching programs. They’d gladly get on the phone with you to help you unpack one of these after you finish it, so that you can get their feedback on how to do it. Because a lot of times, they’ll either provide the funding for it, or they want to JV with it, or there’s an incentive there to turn into a deal, and to take you by the hand and walk you through that process.

Another way to do it is to go on Google and just type in “sell my house cash,” and you’re going to see all the people who pay big money for Google AdWords to be found by sellers who you’ve already started working with. You can collaborate with that person, and they’d be happy to do it, because the incentives are there to partner with you on a deal. I’d say that those are the two easiest ways to do that.

You could also just look at the mail you get at your own house. A lot of people get direct mail from people who will pay cash for houses. Or just google cash for houses in your local area and you’ll find people who market in your geography that want leads like this, that will partner with you. So I would say lean on somebody like that.

If I was in that situation, and I had one of these done… By the way, I’ll walk through the structure of the type of information you’re getting without going into the exact questions… If I had that already done and I could take a picture of it, the front and back of that sheet, and send it off to that experienced cash investor or that deal maker, and then I jump on the phone with them, they have everything they need right there to unpack the deal. Because I’m actually collecting more information than chances are they’re even getting on their intake phone calls.

Theo Hicks: That makes sense. I’m glad we talked about this, because I think this clearly applies to real estate agents, but as you kind of mentioned a few times, it really applies to anyone who’s talking to owners and attempting to get them to sell their house. So that applies to anyone who’s generating off-market leads.

Some of the big takeaways that I got is – first of all, this is kind of obvious, but making sure that right off the bat on the phone call, you’re asking the questions that will automatically let you know if you’re talking to the right person and if this deal meets your criteria. That way, you’re not going to waste time in the meaty part of the conversation which is the profit potential, and then the pain and urgency.

It sounds like, in a sense, you’re trying to tap into what would make them motivated to sell the property, or why they’re motivated to sell the property. It’s most likely going to be some emotional reason, that’s going to be an emotional decision, which is what’s going to help you not only get leads, but get the best types of deals. And then overall kind of shifting your paradigm from just intaking a bunch of facts and then leaving it there, as opposed to approaching and saying, “Hey, you said you’re at point A and you want to get to point B. Let’s figure out how we can use your house to get to that point.” And then going through a solid seller intake form, but not just relying on those questions only, but using those questions to catapult into the second level and third level questions. You kind of gave us an example of that.

Then you talked about how can you create this form, and then once you have this form, how do you know what to do with it? Well, you really need to find someone who’s the expert. I like the advice you gave, you can just Google “sell my house cash,” and you’ll find all the companies that are trying to capture these leads, and you can work with them. So John, is there anything else want to mention before we sign off?

John Chin: Yeah, I’ll give you one last juicy tactical nugget. It’s the setup of that phone call. So literally, when you first talked to that seller on the phone, my question is have you ever worked with a licensed professional who takes more of an advisory approach to solving problems as opposed to only listing houses? Right off the bat, that sets a different tone with you. So they say, “Well, no, I haven’t.” Because they never have. “Well, let me tell you what I do. I solve problems for sellers, in various situations, various scenarios, in various life situations, whether it’s divorce, or they’re missing payments on their house, especially in today’s environment. Sometimes listing your house isn’t the best thing. My intent with this phone call is to get as many of these puzzle pieces on the table of information about your situation where you’re trying to go and what you’re trying to accomplish, so that we can together put our heads together and figure out how to put these pieces together to get you from point A to point B. So with your permission, I’d like to ask you some questions about your house and your situation, and then we’ll be able to solve this problem for you. Is that fair?” That’s the intent statement that we use to set up that actual phone call. Then you have permission to go into everything, because they know what you’re trying to accomplish now, and you clearly are different than your competition.

Theo Hicks: Yeah. Instead of just going straight into the questions. That totally makes sense; making sure you have that solid intro to set the foundation for the conversation. Thank you for sharing that, John. Well, alright Best Ever listeners, thank you for listening. You can learn more about john at investoragent.com. Thank you for tuning in. As always, John, thanks again for joining me today. I enjoyed our conversation. Have a Best Ever day and we’ll talk to you tomorrow.

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JF2264: Investor Agent With John Chin

John is the co-founder of Investor Agent where they have done 2,800 rentals and flips. He started at 19 in the military by picking up real estate courses where he could barely understand the terminology but through perseverance and hard work he now manages over 470 cash flow rentals.  

John Chin Real Estate Background:

  • John is the co-founder of Investor Agent
  • You’ve done 2,800 rentals and flip properties (mostly short sales, foreclosures, and REOs)
  • Closed over $260 Million residential investments
  • Currently manage over 470 cash flow rentals
  • Based in Orlando, FL
  • Say hi to him at:  www.investoragent.com 
  • Best Ever Book: Power vs Force

Click here for more info on groundbreaker.co

Best Ever Tweet:

“Start working with investors, one investor client will change the trajectory of your future” – John Chin


Theo Hicks: Hello, Best Ever listeners and welcome to the Best Real Estate Investing Advice Ever show. I’m Theo Hicks and today we’ll be speaking with John Chin.

John, how are you doing today?

John Chin: I’m doing good, man. Thanks for having me.

Theo Hicks: Absolutely. Thanks for joining us. Looking forward to our conversation. A little bit about John. He’s the co-founder of Investor Agent. They’ve done 2,800 rentals and flip properties, mostly distressed residential properties. They’ve closed over $260 million worth of residential investment and they currently manage over 470 cash flowing rentals. He is based in Orlando, Florida, and his website is www.investoragent.com.

So John, do you mind telling us some more about your background and what you’re focused on today?

John Chin: Yeah, man. So we have a traditional brokerage background. I’ve been doing traditional residential sales for a long time. I started when I was 19 years old while I was in the military, serving in the Air Force, didn’t like turning wrenches that much, didn’t see myself doing that forever… Although it was a good experience, I wanted to get into real estate investing.

So I think a lot of us — to kind of date me a little bit… A lot of the listeners know Carleton Sheets and picked up that ‘No Money Down’ course; it was when it was like a three-inch thick package of audio cassette tapes. And I couldn’t get past the first chapter, because I didn’t know the language as a 19-year-old; I’d never bought or sold the house. So I got my real estate license to learn the course. And then started accidentally selling houses to my military friends.

Then had kind of a fortuitous pivotal moment when I sold a house to an investor who had multiple rental properties. And he kind of took me under his wing and that kind of changed the trajectory of my career in real estate, which is now about 25 years. And I just focused at that point forward on residential real estate properties.

So you fast-forward to today and now we work with licensed agents who want to get into the residential investment space, so that they can do more closings with clients who want to buy rental properties or flips and that sort of thing.

Theo Hicks: So you said that you want to help them work with investors, or you want to help them invest themselves?

John Chin: We helped them to work with investors first, and as a byproduct of working with investor clients and being in that space — it’s kind of like being in the commercial world, but in a residential space… Then as a byproduct of that, you pick up key relationships with investors who then you do JVs with, and you start investing yourself; capital doesn’t become an issue anymore, you have unlimited funding, essentially, with your deals…

And so licensed agents, typically who have an interest in real estate investing will, in our opinion, do it the wrong way. So they start trying to learn how to invest in properties, do coaching programs… You could spend 20 $40,000 pretty easily trying to learn how to invest in real estate and not ever make a penny.

Well, our view is, if you’re a licensed agent, you have access to the MLS, and we teach you how to hack the MLS to find deals; then you work with investors first. You learn as you go, you’re making money as you learn, and then you keep the cherries along the way. So it’s like joining the military, you get to make money while you learn a trade, and then you get out, as opposed to going to college, where you’re paying to learn,  and then you’re trying to make money after you graduate. It’s a little bit of a paradigm shift.

Theo Hicks: Yeah. I was actually talking to someone earlier this week who has a corporate job. She caught the real estate bug, she wants to get out of that job, and her thought is to become an agent, start up being an agent in order to generate income from selling homes in order to make enough money so she can quit her job, and then ultimately start investing. It sounds like you work with people who are already agents, but would you recommend that if someone is in that position, if someone wants to get started in real estate and they have no experience whatsoever, they’re working a job and they want to get their feet wet – do you recommend their first step being getting their license?

John Chin: Yeah, 100%. It’s funny, there’s two schools of thought about that. A lot of estate investors don’t like to get their license, because they like to operate in what I call the gray, where they don’t want to be liable or be in front of a judge saying that, “Oh, you’re taking advantage of the public, you’re a licensed professional,” and they don’t want to deal with the disclosures, and all that kind of stuff. But our school of thought around that is that if you’re a licensed agent, you have that kind of educational base and all the tools to access inventory, like the MLS and you have a broker to guide you and keep everything compliant… That’s, in our perception, a good foundation to start from.

And then if you’re doing investing the right way anyway, then you shouldn’t be afraid of disclosures and investing in real estate as a professional. So that’s our take on that. And if you start that way, with the intention of doing residential sales, but then focus on working with investor clients and—there are cash investors right now that are closing multiple transactions a month on almost every MLS in the whole country. So if you find out how to identify those people, why not work with less clients, do more transactions, not have to deal with buyers and sellers who have finance contingencies and a lot of the hiccups that you deal with emotional buyers and sellers? …that by the way, they’re only purchasing every 7 to 15 years, right? When you think about somebody who’s buying or selling a home.

And if you’re a licensed agent, you’re lucky if you get both of those transactions, the buy and the sale. So why not work with cash investors who are buying a lot of times sight unseen, that don’t have any finance contingencies and they’re closing multiple transactions a month? So we try to accelerate somebody’s success and their money-making opportunity by working with investors, as opposed to your traditional retail client is what we call that.

Theo Hicks: Sure. So you said two things there. One, was identifying the cash buyers, and then two was – you said this earlier, I think, about hacking the MLS. Let’s talk about the ID and the cash buyers first. I kind of got two questions there, answer both or whatever… But the first one is, from an agent’s perspective, how am I finding these types of cash buyers? And obviously, that’s going to apply to wholesalers or anyone who needs to find cash buyers in general.

John Chin: Yeah. Yeah.

Theo Hicks: But then secondly, kind of flipping it around. If I’m an investor and I want to work with an investor-friendly agent, what types of things are agents looking for in their ideal investor client? Will they take anyone who says, “Hey, I want to invest”, or are they looking for a specific person with a specific background and specific ability before they begin to work with them and give them access to their hacked deals?

John Chin: It’s interesting… I think the second question is a lot easier and faster to answer. And the answer there is to anybody who’s been on floor time as a licensed agent who got a call from a “investor”, you want to run the other direction, because most of them are tire kickers. They have you on this wild goose chase and you’re sending them MLS listings and you have no idea, number one, what to look for. You don’t know how to qualify them. But if you know how to qualify an investor right – it’s basically  just two things. They have a track record and a history of closing on deals. If they have a track record and history – that’s the first thing we’re asking them on the phone – and they have realistic criteria on what they’re looking for, then yeah, they’re worth working with. But we’d rather work with someone we don’t have to qualify.

That comes back to your first question, is how do you identify these cash investors that are buying multiple properties? Well, on any MLS search, you can do a search for cash transactions. If you know how to on the MLS pull up all the cash transactions within a certain window – we like to go back like 60 days, 90 days – and then you then append that information with absentee owners, so where the mailing address is different than the property address, and you see someone doing that three and four times the same party, then you know they’re an active cash investor in most cases. Unless you’re in a place like the mountains of Tennessee or in Orlando, for example, or maybe Vegas… Chances are those aren’t vacation rentals. Those are probably long-term rentals and they’re building a portfolio. So then it’s just a matter of contacting those folks, finding out what their criteria is.

And here’s the thing. The number one turn-off with investor clients for licensed real estate agents is that they have unrealistic expectations and they want huge discounts, which as you know, today’s competitive environment seller’s climate, you’re not going to find those kinds of discounts.

So what’s nice about working with people who have tons of transactions and a history of cash deals on the MLS is you’re talking about inventory that’s on the MLS. You don’t have to be a specialist at finding off-market deals, which my partner Ron and I have a lot of experience with that.

Ron’s background is wholesaling, where him and his group – they were closing 50 to 60 transactions per month wholesaling, right? So that’s his background. You complement that with my background, taking possession of properties and full-cycle flipping them, and funding them and so forth… All of the stuff that we’ve done in the past has been a mix of off-market and on-market MLS deals. But when we’re working with licensed agents, we’re helping them utilize a tool that they already pay for, the MLS, to find those investors and find the deals already buying that’s on the MLS.

Theo Hicks: So let’s transition into that… You told me how to find the investors… How do I find the deals now on the MLS?

John Chin: It’s easy. Literally, if you do the first part – we call it our investor launchpad sequence. Picture that a rocket ship is taking off. You’re newly licensed and you want to work with investors, you don’t know where to start. I’d tell you to start by looking at the MLS, doing the search I just described; that surfaces the active cash investors that are buying multiple properties. Well, by virtue of those search results, you see the kind of properties they’re buying. So if you contact those investors and find out that, okay, these are the addresses they bought, that translates usually to a yield requirement they have.

So if you look at what they paid for the properties, and you can easily research what they rent for, those are the same assumptions that these guys are making to get to their yield requirement… And you know that, okay, they’re looking for at 12% gross yield, for example. That’s kind of a rule of thumb to start your search.

There’s a misconception that a lot of agents have – it’s that to work with these private equity firms and companies that are doing these transactions, you have to be very sophisticated with analysis. You don’t. Because they have all their own people that crunch the numbers, right? All you have to do is find the addresses that meets at most a gross yield, which to you and me, we don’t think a term of gross yield; we think cap rate or net income, right? Or cash on cash return if we’re doing a leveraged purchase and financing. But these guys think in terms of, “Look, the only burn I’m going to put on that agent is you just research a realistic [unintelligible [00:13:14].10] number and an address and a price that meets a certain rent multiplier. Send that to us. We’ll do number crunching and get granular with it and then we’ll give you a yes or no.

Theo Hicks: So I’m just trying to make sure I’m getting this right. So I search all these cash buyers, I find the types of properties that they’re buying, and then from that, I know what yield they want. So what’s the next step from there? Going through the MLS and looking for properties that match that criteria? Is that what you’re saying?

John Chin: Exactly. So they’ll have some input process or a team that will take the addresses that you want to send them and then they’ll do further analysis on them. And then they’ll tell you yes or no, and then you represent them on the transaction on that buy.

It’s so overly simple that it’s mind-boggling that agents aren’t doing more of this, right? So if you don’t know what their yield requirement is, you will literally just put an address in, and then you’ll have some sense of what they’re looking for, based on what they’ll tell you their gross yield requirement is… And most institutional investors today are going to be anywhere between the 12%, maybe 15% gross, and then they’ll have some geographic criteria they’ll have on where they won’t buy. Usually, it’s exclusionary. They won’t tell you where they will, but they’ll tell you where they won’t.

So based on that geographic criteria, usually they’ll tell you their requirements on the specs of the house; maybe minimum three bedroom, they’ll have a vintage or a year built requirement. They won’t go back more than 15 years. They won’t do heavy rehabs maybe. They’ll have their exclusionary geographic criteria, but they’ll tell you what that criteria is. And because there are so few agents who know how to work with them, for you to be able to approach somebody like that and say, “Look, I’m a licensed agent. I want to work with you. I can help you find these properties,” they’ll send you their template or their “buy box”.

Theo Hicks: So essentially how that works – you search MLS, cash transactions, absentee owner, multiple transactions. I call them, say, “I’m an agent,” say, “I want to work with you, what’s your criteria?” They send me their criteria and then I search the MLS, I find a list of all the properties that I think meet their criteria, send them an Excel spreadsheet and then it kind of goes from there?

John Chin: Yeah, they’ll usually have one point of contact that you’re working with, somebody on the ground, and sometimes it’s even another agent; or maybe it’s somebody internal, at their ivory tower. And they’re never, by the way, local. Maybe if you live in Phoenix, you’ll be working with them locally or something like that. But usually, there’s five investors that have probably purchased 30% of — we’re in Central Florida, right? So in central Florida MLS, we have about 30,000 property listings; of all the cash transactions, they’re probably purchasing between 25 and 30 percent of all these cash transactions, five different buyers. And they all operate very similarly to what we’re describing right now.

Theo Hicks: And then at what point as an agent — how long they do this for until I start to transition into doing my own deals?

John Chin: If you are into wholesaling — and I have to kind of switch hats for a second here. I’m so into working with licensed agents who are working on the MLS and they have to conform with the brokers requirements and that kind of stuff… But if I’m starting with an investor’s perspective, somebody who’s potentially wholesaling deals and they know that game, then a lot of times it’s a matter of you just contracting the properties yourself. And a lot of times, these buyers – they don’t care how they get them, they just want to get their yield requirements. So if you have to do an assignment or a double closing, they’re fine with that, because they’re paying cash, there’s no underwriting requirements… It’s a pretty easy game. You just have to make sure that their rehab numbers aren’t out of this world and they meet what you expect them to look like.

So if you’re a wholesaler, to answer your question, if you want to get into doing your own deals, what ends up happening is you come across in this exercise of serving that investor and making commission’s on them, you start coming across cherries that you end up wanting to keep yourself. What also will surface is your mid-tier investor clients and your Mom-and-Pop investors who also want to play that game, but not to that scale, that you’ll end up serving and finding deals for as well.

So in our experience, when you’re working with those Mom-and-Pops and those mid-tier folks, they end up becoming JV partners on deals… Our own flips – we never fund or put any money into our own flips. We never even do hard money loans. By virtue of working with these investors that trust us, and they know we have contractors and property management operations in place, and we have all the mechanisms on the assembly line to take that residential property and to monetize it as a flip or rental property, they want to fund our deals.

So we get 100% funding, we typically offer these investors—because think about it, you’re a cash buyer and you’re looking to build a rental portfolio. And let’s say today, a good cap rate might be 7% or 8%, if you’re in a decent area. Do I want to do that and make 7% or 8% on my cash at the end of the year, or can I give Theo,  an investor agent, some of my cash for him to fund a flip? Maybe be exposed to 80% of the ARV so I’m pretty safe, I have some margin of safety there. But I give you 100% funding and you give me in return — our typical term is about 8% interest preferred return on my money, and maybe a 15% clip on the profit beyond that. So it’s kind of like a CD with a lottery ticket attached to it as a little bonus, right? Profit kicker.

And then now if you make me 10% in a six-month span, and you can do that for me twice in a year, I’m at 20% return on my cash. Why won’t I just keep doing that and be completely liquid after every transaction? So it’s very easy then for you to graduate from being an investor agent – good credit, bad credit, no money, maybe you have some money, but to convert a lot of these investors into private money.

Theo Hicks: Alright, John, what is your best real estate investing advice ever?

John Chin: It’s easy. One investor client will change the trajectory of your future because of what they teach you, the access to resources and how they shorten your learning curve. So if you’re working with investors, you make friends, and one or two of those friends are going to become your mentor. So just start working with investor clients. Don’t worry, everything else will take care of itself.

Theo Hicks: Alright, John, are you ready for the best ever lightning round?

John Chin: Yeah, let’s do it.

Theo Hicks: Alright.

Break: [00:19:07] to [00:19:54]

Theo Hicks: Okay, John, what is the best ever book you’ve recently read?

John Chin: That’s easy. David Hawkins, he wrote the book Power vs. Force. The more recent book is The Pathway of Surrender: Letting Go, by David Hawkins. It could be the most important book you could ever read and the only book you ever need.

Theo Hicks: If your business were to collapse today, what would you do next?

John Chin: I’d throw a dart at the map, and as long as I had a phone and a laptop computer, I’d probably go out there, start finding some cash buyers and then start finding deals for them and reverse wholesale.

Theo Hicks: Is there a time that you or a client you work with lost money on a deal? How much did they lose and what lesson did you learn?

John Chin: Many times, actually, including myself. The most recent one I’m thinking of is about $80,000 on one flip that we’re still contending with right now, because after the transfer of the title – because we purchased the property subject to – the IRS filed a tax lien even though there wasn’t one in place and we’re still contending with that, with an IRS that’s shut down right now, in some of the departments. So anyway, we do it all the time.

And the lesson you learn from it is, in every single case, the common denominator on losing money on a flip is because I put too much trust in somebody and never validated. And I didn’t control it and micromanage that deal with somebody maybe that I haven’t done business with before. Almost every case, whether it’s contractors who messed up, competence or character-wise, or it’s somebody who was overseeing a rehab… It always comes down to someone who in many cases are well-intended, but incompetent.

Theo Hicks: On the flip side, what about the best ever deal you’ve done, either monetarily or some other reason why it was the best deal?

John Chin: The best deal I’ve ever done was probably — we love lease option sandwiches, just controlling an asset and not having to deal with the rehab; we do quite a few of those. None of them stand out. One of them where we made about $80,000 when you combine the option money that we got up front, the spread and the cash flow for the year and a half we had it, and then the amount of money we made on the sale price between our buy and the sale… That one comes to mind. It wasn’t the most money we made on a deal, but it was so easy. So those are the ones that kind of stand out.

Theo Hicks: What is the best ever way you like to give back?

John Chin: Well, Ron and I, we both are coaches, youth coaches, that is. I coach the lacrosse, ron coaches football and soccer… And both have young kids. And number two is we kind of take our coaching to a level that [unintelligible [00:22:16].26]  just the games and things like that. So we kind of serve as mentors of the kids that we coach and love.

Theo Hicks: And then lastly, what’s the best ever place to reach you?

John Chin: The easiest place to find us is https://www.investoragent.com/ because we’re offering credentials, the content and the tools and the community to support to a licensed agent who wants to get their foot in the investment world.

Theo Hicks: John, I really appreciate you coming on the show today and walking us through this very simple but very effective step by step process for new agents to not only grow their real estate agent business, but also ultimately transition into doing deals themselves.

And essentially, the process is that you go to the MLS, you look up the cash transactions with an absentee owner, so they don’t live at the property they bought, and they’ve done multiple other transactions in a month or in a year. And then you reach out to that person, because you assume that they’re an investor, confirm they’re an investor, determine what their criteria is, and then go through the MLS and find deals that meet their criteria, send them the address, send them the price, and send them the rent you’ve done, and they’ll take it from there.

And if you do this process enough, you’ll start to build up relationships with people, you’ll start to learn what a good deal is, and then eventually you can start to cherry-pick those deals yourself or start to partner with people, start to have people invest the capital into your deals, assuming you’ve kind of got the relationships with the contractors and the lenders and the property managers. And it is that simply, you said.

And you said that if your business were to collapse today, you would just throw a dart at a place on the map and just do that there.

John Chin: Pretty much. I would say too another way of saying what you just said – because that was a very good summary – is focus on the who, the investors. The what and the how – that comes as a by-product of just serving investors. It’s very simple.

Theo Hicks: And then your best ever advice was to, as you mentioned, focus on the client. And that one client, one mentor can change the trajectory of your future. Like for you, that person can be your one mentor, two mentors, three mentors that guide you towards whatever your investing goals are.

So thanks, John, for joining us and sharing this fantastic strategy with us. I’ll definitely tell the person I talked to listen to this episode. Perfect timing. This is exactly what she was looking for. So I can just say, “Hey, listen to John’s episode.” And anyone else who wants to do the same thing, who wants to get started in real estate, can just listen to John’s episode.

So thanks again, John, for joining us. Best Ever listeners, as always, thank you for listening. Have a best ever day and we’ll talk to you tomorrow.

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JF1914: From House Flipping To Mobile Buying To Mobile Home Park Investing with Andrew Keel

Andrew is here to add some value that we don’t get a lot of on this show. We cover a lot of investing areas, but mobile home parks are not a common subject. That changes today and Joe and Andrew dive into his investing story and then get into specifics on a couple of mobile home park deals. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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“When buying a mobile home park, due diligence is very, very important” – Andrew Keel


Andrew Keel Real Estate Background:


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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Andrew Keel. How are you doing, Andrew?

Andrew Keel: Good, thanks for having me on the show.

Joe Fairless: My pleasure, and looking forward to our conversation. A little bit about Andrew – he’s a mobile home park investor and has been one since 2015. He owns and operates 971 lots in 16 parks across seven states. He’s based in Orlando, Florida. With that being said, Andrew, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Andrew Keel: Yeah, definitely. I started out actually rehabbing and flipping houses down in the Orlando Florida area. I also was wholesaling… Eventually, through my marketing efforts, I came across a couple of mobile homes that were very cheap, and I didn’t really know what to do with them, because they didn’t have a deed. They were a lot different, because they were personal property, kind of like a vehicle; they have a title. So I ended up doing some research and on YouTube I found a guy by the name of Lonnie Scruggs, who wrote this book called Deals on Wheels, which I highly  recommend, and I ended up reading. It just talks about buying mobile homes, and selling them on contract, and creating mailbox money.

I ended up buying about 19 of those individual mobile homes, selling them on contract, and then through the process I met a couple park owners. One of them told me the real wealth is built through owning the land, not the individual mobile homes. That was like a game-changer for myself, and I instantly just dove in — I went to Frank and Dave’s bootcamp, I went to another mobile home park specific investing bootcamp, and dove in. I was fortunate enough to have the wholesaling background, so I was cold-calling and sending letters at the same time to find motivated sellers. I ended up at the Frank and Dave bootcamp actually meeting some passive investors that wanted to invest in deals. We put some deals together; since then we’ve done five deals together with the guy that I actually met at the bootcamp, and I’ve brought on other JV partners since then, and other private equity partners from doing syndications and so forth.

So it’s been an awesome ride. We’re looking to continue buying properties, larger properties. We just closed a few months ago a five-part portfolio, and we have a couple under contract now, so… Just continuing to grow and acquire more affordable housing units.

Joe Fairless: Where is the five-park portfolio located?

Andrew Keel: That is in LaSalle County, Illinois. It’s about an hour and a half west of Chicago.

Joe Fairless: Tell us about that deal.

Andrew Keel: So that deal – it was a pocket listing through a broker. We ended up doing quite a lot of due diligence on it, and negotiations were very slow. From when we actually went under contract it was March or April, and then it ended up closing in December of 2018… So it was just a long, drawn-out process. The sellers really wanted to go through and vet everything through their attorney, so… It kind of dragged on a little bit, but thank goodness we did. We were able to get a decent concession from the seller after due diligence and doing some research.

I actually moved on-site February, March and April of this year, and through that process we bought and brought in 23 used mobile homes, along with 17 brand new mobile homes. Just a massive infill project, value-add to the max… And now our property is worth about double, so I’m really excited about that property.

Joe Fairless: You’ve given me so many things to ask questions about. Thank you for that. [laughs] Okay, a lot of due diligence you said was done on that… Will you elaborate?

Andrew Keel: Yes. When you’re looking at five parks versus just one, it’s very intensive, because you have to look at the utility infrastructure of each… When buying a mobile home park, due diligence is very, very important. Utility infrastructure specifically can make or break a deal. So some of the properties had private utilities, which means that they would have a well, or a septic that we would be required to maintain… So we did specific inspections through experts in plumbing and electrical in those private utilities to make sure that the infrastructure was intact and was going to last in the future… And if it did need repairs, what was the number that we needed, either as a concession from the seller, or that we would need to budget for to improve it moving forward.

Joe Fairless: Is it ideal to have public infrastructure?

Andrew Keel: 100%. If you can get city water, city sewer, that is the best type of park to buy.

Joe Fairless: Okay.

Andrew Keel: Some of our parks — just because they’re city water, city sewer doesn’t mean that that’s the end-all, because most of the parks are master-metered, meaning there’s just one bill that comes in from the local utility company that charges the park for all of their usage, usually for water and sewer… So then what a lot of park owners should do – if they haven’t already – is sub-meter; put individual meters on all of the homes, and then read those meters on a monthly basis and bill the tenants based off of their usage.

A lot of the mobile home park owners today are mom and pop owners, and they don’t have it sub-metered, and they just include the utilities with lot rent, so that’s a value-add component that we can add immediately when we buy these properties to increase the asset value.

Joe Fairless: So utility infrastructure was one thing that you did… And you said there five different parks. How far away are they?

Andrew Keel: They’re about 20 minutes apart from each other. Two of them are very close together… But they were a good distance apart, so when we would set out — when I was on location, I’d literally be hopping from park to park every day, and it made for long days.

Joe Fairless: What’s the smallest lot and what’s the biggest lot of the five?

Andrew Keel: The smallest one had 31 lots, and the largest had 78.

Joe Fairless: So what were some unique things that you came across from a due diligence standpoint that you wouldn’t normally come across if they were just all in one location?

Andrew Keel: That’s a great question. One of the items is — we’ll go back to the private utilities, because that’s where most of our headaches come from…

Joe Fairless: Okay.

Andrew Keel: One of the properties that was probably in the best city in terms of demand and size and employers – it had both private utilities; it had well and septic. So that just – for a lack of better terms – opens up a can of worms… Because you’re now charging people — we go in and sub-meter that park, because it wasn’t metered… So now we’re charging people for their water usage to basically cover our costs to run both the well and the septic… And the septic system was an aging system (we knew that going in), and we had three different excavations/septic expert companies come out and inspect this system… And one of them told us we had a 50/50 chance at surviving and lasting another 5-10 years, and then the other two said it was completely fine.

So with that information we had to make an educated decision on negotiating with the seller as to that septic system. We basically got the seller to guarantee the system for a period of 12 months, and if it failed during that 12 months, they agreed to pay a certain amount of money to help with either a new septic system we would have to install, or connecting the city sewer, which is by far the best bet.

Unfortunately enough, the septic system went bad in the spring, when we have the high water table… Luckily, we did have that guarantee–

Joe Fairless: Unfortunate for them, but really fortunate for you, I imagine…

Andrew Keel: It is, and we’re in process now, working with engineers to get it hooked up to city sewer, which is by far gonna be a way better situation… But yeah, that’s just the kind of stuff that we have to deal with. Actually, all of the other parks have public water and sewer, so that right there makes it a good deal. That was the only one that was kind of a headache.

Joe Fairless: How much does it cost to get it hooked up to public?

Andrew Keel: It really depends on the distance away from where the current main line is. In this situation it’s gonna cost roughly $200,000.

Joe Fairless: My eyes got really big. You can’t see me, but… [laughter]

Andrew Keel: Yeah, it’s a big ticket item.

Joe Fairless: How much did you buy the portfolio for?

Andrew Keel: We bought the portfolio for 3.2.

Joe Fairless: Okay.

Andrew Keel: It makes sense. Even if we would have paid that extra 200k, the purchase price made sense. We’re purchasing these at a 10%-11% cap, so the returns were there, it was just — mainly the project management of now having to oversee that is the painstaking process… But on the other end of this, the property will be worth maybe 8% or 9% because now it has that connection.

Joe Fairless: Right. And you mentioned earlier that you got concessions from the seller, so clearly that was one thing where you had that contingency… Anything else?

Andrew Keel: Some of the electrical… We always inspect the electrical in these parks, and a lot of these parks were built in the ’70s, so they have older electrical infrastructure… And a couple of the parks actually had electrical issues, that weren’t immediate — it wasn’t like “Oh my goodness, they don’t have power”, but they were rusted meterbanks and things like that, that needed to be addressed to help us out. So they agreed, they had an electrician that was going to take care of all of that before closing… And that unfortunately didn’t happen, so we had to put some money in escrow at closing and oversee that project to make sure that it got finished… Which it did, it just took a little bit longer than we would have liked.

Joe Fairless: And you moved on-site for three months… Tell us about that.

Andrew Keel: Yeah, my wife is by far — she’s fantastic.

Joe Fairless: Very understanding.

Andrew Keel: Very understanding, very flexible, and she gets what we’re building, so I’m so thankful to have her in my life. Her and my two-year-old daughter moved up to Ottawa, Illinois, and we rented a little Airbnb up there, a nice little spot… And they moved up with me, and I was working on the parks day in and day out.

The main thing – when we purchased the property, there was poor management in place. There was one manager overseeing all five parks, and it was kind of like chaos. Every day you would talk to her there was some new fire that she was putting out… So we ended up putting a new on-site manager at every property. That instantly gave us eyes and ears in each of the five properties, and helped with our communication of what was going on inside of those locations. That helped tremendously.

Joe Fairless: What are some benefits from a bottom line P&L standpoint that you saw as a result of being there for those three months?

Andrew Keel: Yeah, the toughest part in this business in terms of creating value is gonna be bringing in new homes and used homes, and also renovating existing homes that for whatever reason are not occupied, and in some sort of disrepair. Because unlike traditional multifamily and other asset classes, you can hire a general contractor that’s licensed, insured, and has been doing this and has a track record of doing these construction projects… However, when you’re renovating mobile homes and doing work on mobile homes  you get a different quality contractor, and they require more babysitting, quite frankly. And with that, if you’re on site, you can save yourself money, compared to being a thousand miles away and trying to make a decision off of photos or walkthrough videos.

So we’ve been burned and learned from that experience, and found out that it’s just so important to be on-site. We saved thousands of dollars being able to point out, “Hey, you did replace the glass in this window, and you can send me a picture showing me you did that, but if I didn’t walk through after you did that, I wouldn’t have noticed all of the broken glass that’s now laying on the ground… Just laying there. You sent me a picture of the window and it looks good”, right? Normally, people would just send out a check. But since I can go now to that property, I can see the glass laying on the ground and making the property look worse. A little kid can come and cut themselves. So that’s the kind of stuff that we’ve found being on-site really helps us out with.

Joe Fairless: You’ve mentioned bringing in used homes and new homes are one of the hardest parts… Will you elaborate on what you’re talking about?

Andrew Keel: Sure. When you’re bringing in used homes – I’ll start there, because I started out, my background as a [unintelligible [00:13:54].22] helps me where I can access used homes very quickly. If you talk to anybody in the mobile home park space, they’ll tell you that used home inventory is very small, and they have trouble finding used homes to fill vacant lots. So with that, I actually find several used homes in a given week through different avenues, and I used technology to do so, and have different marketing  tactics to be able to do that… So that’s a process in and of itself, to find the used homes.

Then you have to hire a transporter to go tear it down, put axles on it, put the hitch on it, get it moved into the park… And then you have to hire an installer to then block-level, tie down, put skirting on it, steps… And then you also have to get all the utilities hooked up – electrical, plumbing, gas if there is that… So it’s a multi-stage process, and as with any project management, there’s gonna be some time involved with that, and being on site is very helpful in that aspect.

Bringing in new homes – there’s HUD laws per each state with new homes, of how the site prep needs to be set up, meaning the lot… If we need to pour concrete down below the frost line – that’s something that needs to be done prior to the home even being brought in… There’s just different regulations that HUD requires for brand new homes, so making sure you have an experienced transporter and installer to install the homes is very important, otherwise you can have brand new homes just sitting there, not occupied because they haven’t passed inspection… And obviously, that’s just a waste of time and money.

So having all  those things happen at once, in a period of three months, was a little ambitious, I’ll be honest. We’re still working on some of those projects, but overall occupancy and demand for these mobile homes is so off the chart that we’re definitely profitable, so that’s great.

Joe Fairless: What are some common reasons why homes don’t pass inspection?

Andrew Keel: Number one – this is for new homes – the grading of the ground has to be so that water doesn’t sit underneath of the homes. Even though there’s skirting around it, if water can sit under there, that’s a reason the inspector doesn’t like it. It can attract mosquitoes, attract moisture, which then would rot out the sub-floor… So you have to have proper grading, and you also have to have the concrete runners that meet the local code, which would depend on the depth of the frost line. In Illinois we had to go 48 inches deep with concrete runners, so that when it does freeze and thaw it’s not going to adjust the level of the home. So those are just a couple reasons…

Joe Fairless: What’s a project you’ve lost money on?

Andrew Keel: Projects I’ve lost money on…

Joe Fairless: Or maybe the most money. Let’s go with that – which ones have you lost the most money on.

Andrew Keel: Lost the most money on… We’ve been very fortunate in the mobile home park space where we’ve bought some off-market properties, so thank God we haven’t lost money in the mobile home park space… However, when I was a home flipper in Central Florida here I bought into a property, I paid too much for it, and I was able to sell and not make all of my money back. I think I lost about 4k-5k on that property… I paid too much for it going in, took a chance, and ended up losing a bit of money there. And you don’t account for the time that you lost as well, of getting that property ready.

So yeah, it was 4k, but really that was 3-4 months of work that also went into that, so it was quite a bit more than that.

Joe Fairless: How are you finding off-market mobile home parks?

Andrew Keel: We start out cold-calling…

Joe Fairless: How do you know who to cold-call?

Andrew Keel: Cold-calling – it’s pretty simple; you can type in “mobile home parks” into Google, into a certain search criteria, based on a certain area, and then you just basically call off of the Google Places numbers. A lot of the times you’ll reach managers, and you have to somehow strategically get them to present your information to the seller…

Joe Fairless: How do you do that?

Andrew Keel: I try to just build rapport with them, and kind of get them to like me, kind of prove that I’m not just joking around, or a joker-broker kind of thing… I try to build rapport, and then if they don’t wanna give out the owner’s information – which is ideal if they will – then I will sometimes mail a letter to the tax assessor address on file for the owner, after I talk to the manager. I mail them a letter to where they get their tax bill and say “Hey, I’m interested in buying the property. If you’re interested in selling, please give me a call. If not now, sometime in the future.” We’ve had success with that.

Joe Fairless: How do you transition the conversation when you call the mobile home park, from “Hi, my name is Andrew” to “What is the owner’s contact information, so I can reach out to him/her?”

Andrew Keel: Yeah, that’s a great question. Usually, when I call I try to downplay it and just say “Hey, this is Andrew. My wife Katie and I are interested in buying this mobile home park. We’re looking to get into the business and we like this area, and we like the size of this property. Would you be interested in selling?” And I ask the manager. I assume that they’re the owner.

Joe Fairless: Right, yeah.

Andrew Keel: And then they say “Oh, no, I’m not the owner. I’m the manager.” I say, “Oh, I apologize.” And then I just kind of talk in and say “Oh, well, how long have you been managing the park? What do you think about the business?” I just try to get them talking… And after a little while, they kind of elaborate and tell me about the owner a little bit, about how long they’ve owned it, if they own any other properties, what other business avenues they own, if local – because a lot of these parks are owned by local mom and pops that have other business ventures… One time they said “Oh yeah, he owns a car dealership, and this and that, but I can’t give you his phone number.” So I ended up calling the only car dealership and I got a hold of him… So there’s just ways to kind of get around.

Joe Fairless: Yeah, very resourceful. Your wholesaling days served you well, I imagine, in that regard.

Andrew Keel: They definitely did, yeah. You’ve gotta keep going deeper. The deeper you go, the more you’ll find.

Joe Fairless: Huh. Taking a step back, based on your experience, what’s your best real estate investing advice ever?

Andrew Keel: My best real estate investing advice would be to go bigger faster, and to raise money faster. A lot of investors start out with their own money, and when they run out of money, they stop and they don’t look at continuing to acquire real estate. A good friend of mine – he has a nice little savings account, but he won’t put any of his money in deals… And he only raises money for all of the real estate that he purchases. There’s many different operators and ways of doing it, but I would just encourage people that your friends, family, potential investors out there – you’re doing  them a disservice by not allowing them  to invest with you, because the rate of return that they’re gonna get with you potentially could be a lot higher than any other program, or annuity, or CD that they could ever invest in.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Andrew Keel: Let’s do it.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:20:42].11] to [00:21:40].00]

Joe Fairless: Best ever way you manage properties in seven different states, in terms of a process? What’s a best ever process that you use?

Andrew Keel: I would say we use a software called Slack; it’s our messaging software. Every single on-site manager is in their own channel, based on that property… And instead of phone calls, we make the managers communicate with us through Slack. That way, everything is in a nice, concise, little blurb, instead of talking with managers. Sometimes you’ll find that you’ll be on the phone for an hour when you only needed 30 seconds to get an answer… So that’s one process that I’ve implemented that has worked tremendously for us.

Joe Fairless: What about the reverse of that, where if you just jump on a phone call and you can get through it in five minutes, versus going back and forth on chat for 15?

Andrew Keel: To be honest, usually what happens when we hop on the phone is we end up talking about her sister’s brother who got in a motorcycle accident, and broke his leg… You’d be surprised, man. The conversations go on and on and on. So in Slack, there’s nothing really very complex that we discuss. It’s “Hey, did lot 29 pay?” It’s more like a yes and no type of thing, so… We don’t really have a lot of back-and-forth, I guess is what I’m saying.

Joe Fairless: Fair enough. What’s the best ever deal you’ve done?

Andrew Keel: The best ever deal I’ve done… I was able to secure seller financing on a property that I won in Ohio, and was able to secure 75% loan-to-value, 5% fixed. We have a 20-year note… And the property, when we purchased it, had like 40 tenants. We’ve been able to increase that just by implementing some marketing and some other strategies. Now we have 64 tenants… So that’s my best ever deal.

Joe Fairless: Best ever way you like to give back to the community?

Andrew Keel: Best ever way to give back to the community… I’m pretty active in church, so I give back through that. We also have an angel program my wife and I donate to for kids in the Dominican Republic.

Joe Fairless: Best ever way the listeners can learn more about what you’ve got going on?

Andrew Keel: Check out KeelTeam.com, my website. Always looking for new investors and partners. Even if you’re interested in the mobile home park business and you’d just like more information, I’d be happy to chat with you. You can go on my website and set up a free consult.

Joe Fairless: I enjoyed our conversation, I learned a lot… From ways new mobile homes wouldn’t pass inspections, or common things for why they don’t pass inspection – you talked about the grading of the ground – to getting your hands dirty and living in the area of something you closed on, and what you were doing to help the P&L statement… And then also the private versus public utilities and how much that could cost to actually connect into public… So – lots of stuff we talked about; I’m grateful that you were on the show. I hope you have a best ever day, and we’ll talk to you again soon.

Andrew Keel: Awesome.  Thank you so much for having me, Joe.

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JF1868: Investor Creates Software To Better Manage Real Estate with Ryan Smith

Ryan had grown up around the real estate industry with his family being investors. He had a financial analyst role with his dad’s company when he realized the business needed a better way to keep track of everything. He built software to solve the issue, he grew that to 140,000 users. Ryan also purchases real estate with his wife, having more than 175 different assets across 30 states. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“Focus on the value of income more than income as value” – Ryan Smith


Ryan Smith Real Estate Background:                                                       

  • Co-founder of Elevation Capital Group, focusing on Manufactured Housing Communities and Self-Storage
  • They have more than $500 million of combined acquisition value, 175 assets across more than 30 states
  • Based in Orlando, FL
  • Say hi to him at http://elevationcapitalgroup.com/
  • Best Ever Book: Right Away & All At Once by Greg Breneman


The Best Ever Conference is approaching quickly and you could earn your ticket for free.

Simply visit https://www.bec20.com/affiliates/ and sign up to be an affiliate to start earning 15% of every ticket you sell. 

Our fourth annual conference will be taking place February 20-22 in Keystone, CO. We’ll be covering the higher level topics that our audience has requested to hear.


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Ryan Smith. How are you doing, Ryan?

Ryan Smith: I’m doing well.

Joe Fairless: I’m glad to hear that. A little bit about Ryan – he’s the co-founder of Elevation Capital Group, focusing on manufactured housing communities and self-storage. They have more than 500 million dollars of combined acquisition value, and 175 assets across more than 30 states. Based in Orlando, Florida. With that being said, Ryan, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Ryan Smith: Sure, happy to. Real quick, I started in kind of a technology background. My dad is in real estate, growing up in a real estate family [unintelligible [00:02:00].03] so needed some tools and some help, and so my role within the family was to help with financial analysis, and basically financially underwriting some of these investments, starting as early as my teenage years.

I ended up seeing that my dad needed a better way to do things, so I built a software application for his business that other investors found to be useful, and ended up building that software company up to an install base of about 140,000-some-odd investors globally that used it.

Joe Fairless: Wow.

Ryan Smith: I went to college, played baseball, got drafted a couple of times, but wanted to pursue business, so… Coming out of college, I had – thankfully, due to my programming background and my software company – capital, I had knowledge that real estate was a great place to endeavor, I had a tool (my software program), and my wife, who is also a co-founder in the business, she had a prolific management background in property management… So we came together and started purchasing real estate.

We started with single-family residential in our early twenties, built a portfolio of about 20-some-odd properties, found it wasn’t overly scalable at 25, and we wondered when it would become scalable… So we looked for a better path forward, and long story short, we spent in our early twenties probably about six months to a year researching billboards, storage, apartments, mobile home park storage, and the things we were looking for is we wanted consistent cashflow in a variety of economic conditions. We wanted cashflow, obviously, we wanted tax benefits, and then we wanted capital appreciation opportunities, so the opportunity to grow our capital base. So really the two things we settled on were mobile home parks and storage. We liked those two.

Mobile home parks really stood out, and one of the things that I saw pretty much right off the bat that was interesting was what I thought was a moat hiding in plain sight. Simply put, mobile home parks are needed everywhere, they’re hated everywhere, so they’re not allowed anywhere. So there’s a real constraint on supply… And I thought that was intriguing, because I saw a moat lying in plain sight, that I didn’t have to spend a dollar to create. I didn’t have to spend my way to its creation. So we started building a portfolio well over 15 years ago or so, and here we are today.

Joe Fairless: You and your wife have been partnering up on the business for how many years?

Ryan Smith: We started the company together. The inception, in its original, was about 17 years ago. It’s when that kind of spark was lit.

Joe Fairless: What are some tips for partnering up with your spouse on a business?

Ryan Smith: Hah! It’s a good question. It’s one of the best things to me, because this doesn’t mean if you don’t work with  your spouse you don’t love your spouse, but to me the opposite is also interesting, where if you really do love your spouse, then spending as much time with them is great. It’s definitely stimulating to work with them in an intellectual capacity on a daily basis, so there’s definitely been some learning lessons in terms of roles and responsibilities and boundaries at times, but I will tell  you, it’s one of the best things… And partially because I’m spoiled, because I [unintelligible [00:05:02].10] She’s fantastic.

Joe Fairless: So what are some specific tips that you have? You mentioned the benefits, but what are maybe a tip or two that you have for someone?

Ryan Smith: I would clearly articulate roles and responsibilities according to strengths and weaknesses… And sometimes when you’re in a relationship lines get blurred, but in business it’s helpful to have a clear delineation. So I think it’s a simple, basic tip, but I think to understand strengths and weaknesses and identify roles and responsibilities based on those, and clearly articulate those going in.

Joe Fairless: So your focus now is on manufactured housing communities and self-storage, yes?

Ryan Smith: Yes, correct.

Joe Fairless: What’s the latest transaction that you closed on?

Ryan Smith: In December we closed three. Two self-storage deals in Houston, Texas, and then a mobile home park just outside of Columbus, Ohio. About a 300-space deal.

Joe Fairless: Let’s talk about those three. Two self-storage in Houston. Can you give us the details on those?

Ryan Smith: Yeah, I’ll just pick one, just to have at least one of those to talk about…

Joe Fairless: Yeah, sure.

Ryan Smith: It’s in Katy, Texas, which is a suburb of Houston. It’s a newly-constructed self-storage facility, in a good location. We think for the long run it will be great. There’s some upside in it, in that the current management was, I would say, okay, but not great, in our opinion, and we think we could do things better. And then the structure of it, the physical layout of the facility was kind of odd. It was this approach or attempt to on the third floor of it climatize it without the traditional climatization process. Basically, they put two giant fans in the roof and tried to circulate that way. What it ended up doing is not working very well, so the top floor was incredibly hot, 100 degrees plus on most days, and it sounded like a jet engine in your ear. So occupancy on the third floor was a challenge. We are fixing that design flaw, in our opinion, and we’re managing it better.

Joe Fairless: How?

Ryan Smith: Actually, the guy who built it – we know him quite well; I believe he brought the deal to us. He just said “Listen, they’re asking me to do it this way. It doesn’t make sense to me, but I’m gonna do it, because that’s what they’re asking…” So we’re taking out the fans and we’re actually sealing the roof and putting in your standard climate system.

Joe Fairless: And why would a reasonable businessperson decide to do it the way that it’s currently done? Just putting ourselves in their shoes.

Ryan Smith: I wish I knew the answer, and I’ve relegated myself as a goal to never understand crazy, for fear of what that says about me.

Joe Fairless: So there’s no rational explanation? If you had to come up with a rational explanation for why they did it that way?

Ryan Smith: Cheaper. It’s lower cost.

Joe Fairless: There we go. Okay. Got it. Approximately what would be the cost differences?

Ryan Smith: I don’t know off the top of my head. If I were to guess, it was a couple hundred thousand dollars most likely.

Joe Fairless: That’s significant. Okay. Alright, and the upside there is changing the existing cap-ex — or I don’t even know if it’s cap-ex…

Ryan Smith: Correct.

Joe Fairless: …changing some of the structure, and then you’ll get better rents and get higher occupancy.

Ryan Smith: Correct, correct. I believe the first month after we bought it, I think we rented something like 25 to 30 units the first month or two.

Joe Fairless: How many total units?

Ryan Smith: It’s about 700 units. Just shy of 700 units.

Joe Fairless: Okay. Is that type of value-add play typical for self-storage?

Ryan Smith: Yes and no. Every deal is a different puzzle, and really no two are alike. But there’s no shortage of value-added plays within the space, it’s just every one is a different puzzle you’re putting together. I can give you another example…

Joe Fairless: Yeah, please.

Ryan Smith: One of the first properties we bought in our current fund, called Fund 7… But one of the first properties was a self-storage facility in Melbourne, Florida. The short story is it was built about 17-some-odd years ago; great location, in the heart, on the main drive… A pretty moated property, we believe. In short, it was about 750 units. They had RV spaces in the back; kind of adult toys, boats, RVs, and the like… And we find that to be a pretty inefficient use of land. So when we put it under contract, part of the agreement was that they would build, based on our design, a new building in place of the storage, and we would close basically upon completion. So that was done, we closed, and it went from 750 units to approximately 1,050 units at closing. So when we closed, the occupancy on the property was roughly 75% occupied. So we created the  vacancy issue.

Now, the risk is we think we can fill that and absorb that vacancy, and we couldn’t, so the risk was borne but us, in our underwriting… But in short, I wanna say — gosh, I think it was Q3 of last year that property had (I wanna say) 93% occupancy, and that was in just about six quarters from acquisition. So we created the vacancy problem and then filled that, and obviously more NOI, which is always a good thing.

Joe Fairless: What are some other ways to add value in self-storage?

Ryan Smith: I’ll give you an example of a property we bought about two years ago in Melbourne, Florida… When we first saw it – the asset was in a great location, major market, good density, good barriers to entry… But the specific asset – one of the problems that we created intentionally so we can solve it on the other side of ownership was we found that it was built in 2001, good bones, had about 750 units, about 75,000 feet, but they did RV, boat — basically, adult toy storage in the back, which is not as effective on a per-square-foot basis for the purpose of generating income.

So we put in the contract that we wanted them to build 300 units to our specification. The long and short of it is when we closed, there were about 1,050 units on more than 100,000 feet, and because of that, the project was around (off of memory) 74% or 75% occupancy. So we created our own vacancy problem, which we then solved through leasing it up and pushing rents over time.

Off of memory, I think 4-5 quarters later after acquisition it hit 93% occupancy, so from 74% to 90% plus within a year, a year-and-a-half. So that’s been another example of a way we’ve added value on that type of asset.

Joe Fairless: Does that negatively impact your financing, since you’re buying a property that used to be 90% and now they went down to 70%?

Ryan Smith: No, because you tell the story as to why. So it’s not a market-based — you do all the diligence and you can show that the market can support it, and we were able to… So it was not a challenge.

Joe Fairless: I don’t recall ever hearing a multifamily investor go to a seller of an apartment building and saying “I like your 750 units. I notice it’s zoned for 1,100 total, so why don’t you go build 400 units? And then I’ll close on the property.” First off, does that happen in multifamily? And then secondly, how frequently does it happen in self-storage?

Ryan Smith: Yeah, it’s a good question. On the multifamily side I wouldn’t really know, because my expertise is mobile home parks and self-storage… But I would say it happens less often than normal; it’s not overly common. But then again, we ask for things pretty regularly that we get that are not normal, so this is one. And what it did for us is it allowed us to close, and then go right into lease-up, rather than having to close and then go through permitting, construction, and more of a drag on cash.

Joe Fairless: How is that structured…? If I’m the seller, and I have 750 units, and I’m selling my self-storage, and  you are the buyer and you’re saying “You know what- I like it, but why don’t you go build me about 300 more and then we’ll talk?” I’d be like, “Screw you, buddy. You go build it yourself.” So how do you convince me to actually build them?

Ryan Smith: You’re kind, by the way. You would have said far worse than that, but I appreciate the kindness of that reply. [laughter] We include the cost of construction plus a premium for their time and energy and effort. We paid a premium over what the 750 units was. So they came out ahead in the wash, but so did we, in that they won — if we were right in our underwriting and we could lease up the facility, it’s a shorter path to profitability, rather than a longer drag on cashflow. So it was a mutual win in the way that it was presented and accepted.

Joe Fairless: And approximately how much longer does that take to close the transaction, since they’re now gonna be build 300 units?

Ryan Smith: Off of memory, I think it took roughly six months, something like that. It added roughly six months.

Joe Fairless: Six additional months?

Ryan Smith: Correct.

Joe Fairless: Got it. That’s fun to talk about. I’m glad  you mentioned that. That’s fresh stuff. And on that note, you did say you tend to ask for things that aren’t normal, but get. What’s another example of that?

Ryan Smith: That’s a good question. I would just say we’re creative, because every deal is a different puzzle. One thing that’s somewhat unique that’s pretty normal for us is I’d say it’s pretty normal for us to make more than one offer to a seller, so we usually create multiple offer scenarios. One example of a recent one is where there’s an option to assume the loan, and a whole offer based on that loan assumption, and then a whole different offer based on a cash purchase. So we like to, as much as we can, bifurcate the offers, to give the sellers a feeling of flexibility in options. That has worked out well for us.

Joe Fairless: When you do the loan assumptions versus cash purchase – first off, do you typically work with a broker on these transactions? And if so, are the brokers seeing that this is something that’s commonplace, or is that not as typical, to have two offers for one deal?

Ryan Smith: That specific one was an off market deal through a broker; no problem at all with it. So I don’t wanna say all brokers are familiar or comfortable with that, but the brokers we’ve worked with are, and it’s not abnormal.

In terms of our deal flow, we deal with both on and off market properties, and then also broker and direct seller relationships, so we pretty much deal with all types.

Joe Fairless: For someone looking to not get started in self-storage, but buy their second or more self-storage facility, but say they’re still on the small scale relatively speaking, what’s the best way for them to find off market deals?

Ryan Smith: I’d say the usual suspects of beat the payment, postcards, mailings, those things help. We do those. Attending trade shows of self storage associations in your area could be helpful… But also going door-to-door. Picking a market – if your market is specific and you say “Hey, this geographic region is where I wanna buy in”, creating a list of opportunities in that area, and either mailing/calling and/or visiting I think would pay dividends. That’s, by the way, how we started our business many years ago, specifically in the mobile home park side of things – just phone calls. My wife had more success at it than I did. You talk to her on the phone, you wanna know her; you pretty much wanna hang up on me. So she was very successful.

Joe Fairless: Based on your experience in the industry, what’s your best real estate investing advice ever?

Ryan Smith: It’s a good question. I’ve learned this over many years, and I would just say succinctly to focus on the value of income more than income as value. The value of an income stream is in my opinion more valuable than an income stream as the value of an investment, if that makes sense.

Joe Fairless: It does, but please elaborate.

Ryan Smith: As an example, I’ll give you  as best I can by verbal… Let’s say you buy a property, and you find a way to make a dollar a month, each month. So at the end of the year you have $12, you pay tax on that, assuming no depreciation offset; let’s just say you pay tax, 40%. So you have roughly (let’s say) $8 at the end of the year. So every one dollar a month, you raised your net cash $8 at the end of the year. Assuming an asset is a 5-cap asset – and I’m just picking 5-cap for ease; you can do this at 6, or whatever cap rate you wanna apply… But let’s say a 5% capitalization rate. If you’re able to buy a property and add $1 of NOI on a monthly basis, that’s $12. Divide that by 0.5 or multiply it by 20, it’s all the same. So you have $240 of equity that you have created per $1/month of NOI.

Comparatively, the question is what excites you more – $240 which is unrealized, so it’s not taxed, or $8 after tax? And in fact, if you focus on the $240, you also have the $8. But the point in that is if you have one unit and you can raise your NOI $1/month, you have $240. If you have ten units, it’s $2,400 in equity, so on and so forth. And the reason why understanding this is so important is working backwards.

For example, if your listener who’s listening right now says “Okay, well my goal is to create ten million dollars of net worth for myself in whatever period of time.” It may be five million, it may be a million, I don’t know. But let’s just say ten million dollars. With this, at a 5% capitalization rate, you take ten million dollars 5% cap, you need $500,000 of NOI to be worth at 5-cap ten million dollars. So you need to create $500,000 of new NOI, and that sounds like a ton… But then let’s break it down. So you take $500,000 of NOI, divided by 12 months in a year – that’s roughly $42,000/month of NOI. It still seems like a lot, $42,000/month of NOI; it’s a lot of work to do.

Now, let’s say — how many units do you wanna own? Let’s say your listener says “I would like to one day own 1,000 units.” Okay, so take $42,000 and divide it by 1,000 units – you need roughly $42/month of NOI per unit to be worth ten million dollars. And you say “Okay, well $42/month – that still may take some time.” Okay, well how many years? Say five years. So you take $42, divide it by five years, so the summation of all of that is if you have 1,000 units, and for five years, each year for five years you grow your NOI by $8/year, for five years, across 1,000 units, at a 5% cap rate, you have created ten million dollars of net worth for yourself. And with that, you can then create all the income you want.

Joe Fairless: Thank you. Very helpful, and what a good example. I didn’t know you had that up your sleeve. I might have just kept going. Good thing I asked you to explain. That’s a great example.

Ryan Smith: Thanks.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Ryan Smith: I am.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:19:22].27] to [00:20:04].03]

Joe Fairless: Best ever book you’ve recently read?

Ryan Smith: Right Away & All at Once, by Gregory D. Brenneman.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Ryan Smith: Trusting without verifying.

Joe Fairless: Will you give an example?

Ryan Smith: Yeah, I did a deal – it probably also falls under the worst ever deal –  with a family member where some of the information was misrepresented. [unintelligible [00:20:21].13]

Joe Fairless: I would imagine so…

Ryan Smith: Yeah… [laughs]

Joe Fairless: …for multiple reasons. Best ever deal you’ve done?

Ryan Smith: Mobile home park, early in our business, in Hopkinsville, Kentucky. Off of memory, it’s 60-some-odd units. We got it under contract for roughly 300k. I think we put $12,000 down. The rest was seller carry. We then improved it over many years, and I think sold it for around $800,000. So from an ROI perspective, that’s probably the best one we’ve ever done.

Joe Fairless: Best ever way you like to give back?

Ryan Smith: Focusing on bringing the heart of giving into the intention of earning, making it more of a unified — but more specifically, what we do… My wife has been really great in this, but in short – we form giving groups around towns, where  we get 12 people in a group; each person puts in $2,500, and then we, through our social fabric, bring people in need to the group that we’re connected with, and then we vote on a gift recipient twice a year, and then we follow up and follow through with the people. So it’s a direct gift, giving locally, within our social fabric, and then we’ve expanded that. There’s many giving groups now, it’s been a lot of fun.

Joe Fairless: Is that a formalized organization, or is there a website for that?

Ryan Smith: No. But if anybody wants details on how to do it, or possible details, I’m happy to share with what we’re doing. We’ve systematized the approach on how we’re doing it, but we’re not formalized as an organization, no.

Joe Fairless: And what a wonderful segue – how can the Best Ever listeners learn more about you and your company?

Ryan Smith: ElevationCapitalGroup.com, that’s the URL of our site. My direct line is 407-602-7662. Happy to help any time.

Joe Fairless: Loved listening to the stories about unique ways to add value, from the jet engine sound with the property in Katy, Texas, to the 750 units that — no, no, no, you don’t want 750; you wanted 1,050, so “Please just go build those, and I’ll wait six months.” I love hearing these stories and actual transactions, with some back-and-forth, and what made sense for both parties.

Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.

Ryan Smith: Sounds great. Thanks.

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JF1670: Hiring The Right Remote Team Members To Help Your Business Grow #SituationSaturday with Nathan Hirsch

Nathan had a problem, he needed to hire team members and saw the need for others too. So he created a company to help provide good remote team members for businesses and people that need help. Hear his best tips as it pertains to hiring a new person. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


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“Focus on whether or not they are the perfect fit for you” – Nathan Hirsch


Nathan Hirsch Real Estate Background:

  • Co-founder and CEO of FreeeUp.com, a marketplace that connects businesses with pre-vetted freelancers in eCommerce, digital marketing, and much more
  • Has sold over $30 million online
  • Based in Orlando, FL
  • Say hi to him at https://freeeup.com/


Sponsored by Stessa – Maximize tax deductions on your rental properties. Get your free tax guide from Stessa, the essential tool for rental property owners.


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

First off, I hope you’re having a best ever weekend. Because today is Saturday, we’ve got a special segment for you called Situation Saturday. Here’s the situation – you are needing to hire some remote team members to help you grow your real estate business. Well, you need to know how to hire the right ones.

With us today we’ve got Nathan Hirsch, who’s going to talk to us about how to do just that. How are you doing, Nathan?

Nathan Hirsch: I’m doing great, how are you?

Joe Fairless: I am doing great as well, and welcome to the show. A little bit about Nathan – he is the co-founder and CEO of FreeeUp.com, which is a marketplace that connects businesses with pre-vetted freelancers in e-commerce, digital marketing and much more. He has sold over 30 million dollars online. Based in Orlando, Florida.

With that being said, Nathan, first, before we dig into how to hire the right remote team members, can you tell us a little bit more about yourself and what you’re focused on?

Nathan Hirsch: I’m a long-time entrepreneur. I started a multi-million dollar Amazon business out of my college dorm room back in 2008. I was 20, and it was really tough to hire people; college kids are pretty unreliable, and I got thrown into the remote hiring world, the virtual assistants and freelancers, and UpWork, and Fiverr.

Growing my business using those methods was great, but it also took up just a lot of my time, to post a job and get 50 people apply, interview them one by one… And I always just wanted a faster way… So a few years ago I created my own marketplace, FreeeUp, where we get thousands of applicants every week, we vet them for skill, attitude, communication, make them available to clients quickly, with 24/7 support, and a no turnover guarantee… And it’s been a lot of fun.

We started in the e-commerce space, moved our way up there, got into the marketing space, and now we’re working with real estate agents, and software companies. It’s been kind of fun thinking outside of my norm, which is e-commerce and online businesses, to the average real estate agent who is just swamped with work, and they have so much to do, whether it’s website stuff, or lead generation, and the different creative ways that you can use virtual assistants and freelancers.

Joe Fairless: You mentioned you evaluate skill, attitude and communication… Is that your differentiating feature for the other companies that you referenced earlier?

Nathan Hirsch: Yeah, it’s really four things… It’s that pre-vetting; we let in one out of every 100 applicants. It’s the speed – people put in a request, we fill them within a business day. We have clients who get started within hours or minutes, so you don’t have to wait two weeks to find someone you like.

The customer service, I would put against anyone else. We’re really there to make sure you have a great experience all the time… And that no-turnover guarantee, which as an entrepreneur, there’s nothing more frustrating to find someone you like, only to have them walk out the door. And while people rarely quit on our platform, it’s real life, of course it could happen, and if it does, we cover the replacement cost and get you a new person right away.

Joe Fairless: In your bio it says you’ve sold over 30 million online… What’s the bulk of that come from?

Nathan Hirsch: Twenty million plus on Amazon, and it’s probably more like 35 to 40 million now. A little outdated, but on FreeeUp we did one million the first year, five million the second, and last year we did about nine million.

Joe Fairless: Wow. That’s incredible. What were you selling on Amazon?

Nathan Hirsch: I started off selling books. I was a college kid, I wanted to compete against my school bookstore. I actually got a cease and desist letter to knock it off from them, and that made me pivot a little bit. I started doing research into stuff I was familiar with – sporting equipment, computer games, DVDs, and I just failed… The only thing I could get to sell were these books.

It wasn’t until I branched out of my comfort zone and found the baby product industry that my business started to grow in and scale. If you can imagine me as a 20-year-old single college guy selling baby products on Amazon – that was me.

Joe Fairless: So you sold the bulk of the 20 million dollars in sales from baby products?

Nathan Hirsch: Yeah, the bulk was baby products, the rest was home goods and toys.

Joe Fairless: Huh. And why don’t you do that anymore? It seems like it’s got a lot of revenue.

Nathan Hirsch: Yes, we got the Amazon business to the point where it was three million, five million… That’s about where we topped off. And we got in at a great time, before all the courses and the gurus. Now everyone is selling on Amazon.

As we got bigger, we started off doubling every year, and then once all the competition came out there, we were still there, we were still making money and it was still a good business, but we weren’t growing at all. We were just kind of staying stagnant.

I wasn’t passionate about selling baby products then, I’m still not passionate about selling baby products now… And with Amazon, you’re always relying on them; you’re not building a brand, you’re not communicating really with anyone outside of your manufacturers and your team.

When I started FreeeUp and it started to take off, it was a lot more fun. I get to go on podcasts with you, and speak at conferences, and help business owners all around the world… FreeeUp has been scaling, and I get to grow my brand, and I made the decision January of last year to focus all my attention on FreeeUp.

Joe Fairless: When you created FreeeUp, did you initially identify the differentiating features that you now have as how you’re gonna position yourself, or has that evolved?

Nathan Hirsch: The pre-vetting and the speed was always there, and I’ve always been very customer service-focused. I forget exactly when we added the no-turnover guarantee; it wasn’t very long, but… The original concept was much more towards an Amazon seller. I was a big Amazon seller, I knew the community well, I had a Rolodex of Amazon freelancers that I knew were dependable, and the concept was “Hey, if you’re a seller, you can go post a job, or you can just come to me and I’ll introduce you to someone who can get the work done today.” That’s kind of how it started, and people started talking about us, and telling all their other business owner friends, whether they were real estate agents or they were in different e-commerce, they owned a Shopify store… We really expanded from there.

Joe Fairless: When an entrepreneur is hiring a freelancer and they’re doing the 15-20 minute interview, what should they ask?

Nathan Hirsch: We do a lot of the vetting for skill, attitude and communication, so a lot of times that’s where I would encourage people to interview if they weren’t using FreeeUp; not just focusing on the skill and the resume, but also the person’s attitude and the communication. What I like to tell clients is focus on what it’s like to work for you, whether they’re the perfect fit for you. I know myself very well; I know I talk fast, I know I’m direct, I know I’m not the most warm and fuzzy person out there, so I really like to focus in on “Is this person the right fit for me and my business?” Because a lot of freelancers work for tons of different clients, and what’s good for one client is bad for another; what one client likes is another client’s pet peeve. So really making sure that they’re the right fit for you and your business – that’s where you should focus the interview.

Joe Fairless: How do you evaluate attitude?

Nathan Hirsch: We do one-on-one interviews and we look for people who are passionate about what they do; they’re not just in it for the paycheck. We want people if they’re a graphic designer, they love graphic design. Me personally, I hate bookkeeping; I like being an entrepreneur. So if I hire a bookkeeper, they need to love bookkeeping as much as I love being an entrepreneur.

The other side of it is we want people who – yes, they’re nice, but they also don’t get aggressive the second something doesn’t go their way. We’ll edge people on a little bit, because not every client out there is rainbows and butterflies. If they get on our platform and some client says something or comes across the wrong way, we can’t have freelancers that will just blow up on them. We want people who keep it professional and don’t take things personally and don’t get aggressive. That’s a lot of what we look for.

Joe Fairless: When the entrepreneur is looking to scale — let’s pretend that FreeeUp is not around… It is, and it will be, but let’s just pretend it’s not; what are some things that the entrepreneur should know prior to even doing a search for the person they’re hiring?

Nathan Hirsch: What I recommend doing – step one and two of my hiring process is figure out what you wanna hire for and what that perfect person looks like. What you wanna hire for – create two lists. The first list is everything you do on a day-to-day, week-to-week, month-to-month basis. Get away from your computer, get away from your phone and just brainstorm it, and write everything out. Put it in order from easiest to hardest, and start chipping away at that list from the top.

On the flipside, one of the activities that my business partner and I do whenever we meet up is we go through our businesses; we’ll be honest with each other, “Hey, Nate, you’re not good at this. Hey, Connor, you’re not good at this.” We’ll write that down, and it’s great if we complement each other very well, but at the same time we always end up with a list of things that we’re doing all the time that we’re really not good at. The best entrepreneurs – they learn how to turn those weaknesses into strengths. So that’s really step one – everything that you do that you have processes for, and everything that you’re bad at.

Step two is what are you really looking for. Are you looking for a full-time employee in your office? Is it a virtual assistant in the Philippines? Is it a freelancer for a project? Whatever it is – what’s your price point? What’s it like to work at your business? What kind of culture do you wanna hire for? What skills do they have to have? Really defining what that perfect person looks like, because if you don’t know what you’re looking for, it’s very hard to find it.

Joe Fairless: What’s a challenge you’ve had growing FreeeUp?

Nathan Hirsch: For me it’s the software. It’s funny, I was in New York yesterday and I was talking to this guy who owns a huge company. They have 60 full-time employees. He was originally a coder, and I thought to myself, “Man, if I could code, FreeeUp would be even bigger than it is now”, because that’s one of the things that can hold you back in this day and age. Working with developers is tough. I have a million ideas of how I wanna improve our software, and you can only do so much with the dev team that you have. You’re prioritizing projects; some of them take three months, some of them take a month, some of them take a year, and you’re constantly getting feedback from clients, from freelancers, and you wanna implement everything, and… If only I could code, if only I could go in there and do it myself… But it becomes a lot more of trying to communicate the business needs with the developer, who thinks in a much different way.

Joe Fairless: How do you attract the freelancers to your platform, compared to other platforms?

Nathan Hirsch: Great question. This is one of the things that we focused on at the beginning, because we’re well aware that there’s no shortage of virtual assistant agencies out there, and marketplaces, and places where people offer their service… And we wanted to create a culture where people wanted to be here, and the first part is that speed. Just like clients don’t wanna go through 50 people and take two weeks when they need a project today, freelancers don’t wanna compete against 50 people on every project, and spend all their time looking for jobs; they wanna be doing the projects. So really eliminating that upfront time and making it a fast-paced marketplace was the starting point.

On the back-end, that same 24/7 support that we have on the client side, we want on the freelancer side too, where if they have a question, if they want help with the software, if they want tips or advice on how to land a client or how to grow their freelance business, or how to turn into an agency – we have those resources there, and my team is very well trained to handle that. That’s really what we’ve been able to do – create a marketplace where yes, there’s scarcity, because it’s hard to get in, but once you’re in, you get access to clients quickly, with great support to really help you scale and grow.

Joe Fairless: Anything as it relates to hiring the right remote team members that we haven’t talked about, that you think we should touch on?

Nathan Hirsch: Yeah. Especially in a business that’s always changing – and I’ll put that in the perspective of real estate – that trial and error is so important. A good example of that – I was not a big social guy back then; now I guess I am – is I would experiment. I would say “Hey, let’s hire someone to run my Twitter for a few months. Let’s hire someone to run my Instagram.” You play around with it, and some of it works, and some of it doesn’t work; and what’s the worst-case scenario? In three months it doesn’t work, I’ve lost $1,000; I’m not gonna go homeless. What’s the best-case scenario? I have a new source of leads, a new way to generate business… And I feel like in a space where – yes, real estate is changing, but there’s just so much competition, trying new things and experimenting with hires is a must. You never know what’s gonna work for your business.

There’s someone that sells insurance that I know very well, she’s a friend of mine, and she found that on LinkedIn she can just get a ton of leads there. Well, all the other insurance agents are marketing in different ways. She’s found that niche on LinkedIn, and she did it through trial and error… So that’s what I encourage people to do – instead of just focusing on your processes, leave a little bit of room for creativity to hire different people and see what actually works for your business.

Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on?

Nathan Hirsch: If you go to FreeeUp.com you can book a time in my calendar; I’m more than happy to talk to you about your business and your hiring needs that are right at the top. You can create a free account, get a $25 credit by mentioning this podcast, and check out the FreeeUp YouTube channel and the FreeeUp blog for a lot of great hiring content.

Joe Fairless: I love how you talked about how to approach thinking about hiring someone, and creating the list of what you do on a day-to-day basis, start chipping away at the top of those items for other people to do, and then being honest, really looking in the mirror and identifying what you’re good at, what you’re not good at, and just stop doing the stuff that you’re not good at, and bring on the right team members. Then, as you said towards the end, start testing certain things out.

There’s a lot of skilled people out there, and why have yourself do the things that you’re not as good at or don’t like doing, when there are plenty of people who enjoy doing that stuff, and consequently are very good at it.

Thanks again for being on the show, Nathan. I hope you have a best ever day, and we’ll talk to you soon.

Nathan Hirsch: You too! Thanks so much for having me.

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JF1413: Zombie House Flipping Star Gives Back To Go Forward with Justin Stamper

Best Ever Listeners, today we have the privilege of learning from a celebrity! Justin is the star of Zombie House Flipper on A&E. He worked his way up to flipping over 100 homes and being the star of a TV show. His take on life is refreshing and something we could all use a little more of in our own lives. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:


Justin Stamper Real Estate Background:

  • Began his career in real estate by flipping his family’s foreclosed home when he was 19 years old
  • Worked his way up to becoming a well known real estate investor in Central Florida by buying and renovating over 100 homes
  • Say hi to him at www.americananchorhomes.com
  • Star of Zombie House Flipping on A&E
  • Based in Orlando, Florida
  • Best Ever Book: 48 Laws Of Power

Best Ever Listeners:

We have launched bestevercauses.com  

We profile 1 nonprofit or cause every month that is near and dear to our heart. To help get the word out, submit a cause, or donate, visit bestevercauses.com.


Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Justin Stamper. How are you doing, Justin?

Justin Stamper: Hey, I’m great, man. Coming to you live from sunny Orlando, Florida. What’s up, Best Ever listeners?

Joe Fairless: Nice! Well, what’s up back, my friend. One of our team members, Theo, moved to Florida from Cincinnati, and I was talking to him recently and he’s like “I don’t know why I ever lived in Cincinnati. The weather here in Florida is amazing.” Not knocking Cincinnati… Well, he kind of was knocking Cincinnati. I’m not knocking Cincinnati, I’m just repeating what he said.

Justin Stamper: Just knocking winter.

Joe Fairless: Exactly, just knocking winter. Thank you for that. Good save, I appreciate your help on that. Justin began his career in real estate by flipping his family’s foreclosed home when he was 19 years old; worked his way up to becoming a well-known real estate investor in Central Florida by buying and renovating over 100 homes, and you can learn more about what they’re up to now at AmericanAnchorHomes.com, which is also in the show notes.

With that being said, Justin, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Justin Stamper: Yeah, absolutely. Best Ever listeners, I got into real estate just by getting chucked into the lion’s den. I had just graduated high school, I really wanted to work in the music industry, and moved to London. My parents called me and they were like, “Hey, it’s the recession…” — it’s like 2008 when this was happening… “You know, if you could move home and kind of just help us out… We’re just going through some really tough times.”

My family owned a small business, and unfortunately they lost everything. We went bankrupt, and we also ended up losing our home. So I was home one day, these guys came and knocked on the door, and they were like “Hey, we need to talk to your parents.” I was like, “Hey, look, they’re not here right now. What’s going on?” They’re like “Well, we just bought your house today at the foreclosure auction.” I was like, “Wow. I didn’t even know my house was in foreclosure.” They’re like, “Yeah, we didn’t know people lived here.” I was like, “Yeah man, this is like my childhood home.”

They were super cool. I actually renovate houses with these guys now, like ten years later… But they gave my pops and I the chance to buy the house back for like essentially a markup. We raised private capital through friends, bought our house back from these guys, renovated it ourselves, and sold it. We made the first bit of money that we had made in real estate, and at that time any money that we had made in a couple years, and I literally started buying houses at the same courthouse auction a month later, and just kind of never looked back. Pretty crazy stuff.

Joe Fairless: That is pretty crazy stuff, and thank goodness for the individuals who purchased the house being good people, who wanted to make money but also wanted to work with you all on a solution to help you all out.

Justin Stamper: For sure. Because honestly, that’s probably my favorite part about real estate… The service that we do (hopefully) is solving problems and bringing solutions to people, and fighting the good fight and helping people out. They were all about that, and they kind of showed me the ropes of that through my career; real estate doesn’t have to be about profit and loss, it can be about “Hey, these people are in a really peculiar situation, they’re going through a tough time. Can you help them?”

Every time I buy a house from somebody that’s like pre-foreclosure or dealing with a death in the family and doesn’t even wanna walk into the house again, I enjoy being able to be like, “Hey, let me help you pick up the pieces of life.” Because life is tough man, there’s no easy way about it; there’s no instruction manual for this life, there’s a lot of challenges, and real estate, for a lot of people, is super stressful, especially if it’s not their profession… So I love being able to help people out, and these guys kind of showed me the way with that. And it’s cool, and it’s led us down a crazy path, and now we have a television show about us flipping houses in Orlando, on AME, called Zombie House Flipping. We’re doing our third season, and I never would have thought that some punk/rock kid who only has a high school education would ever have a show about being a real estate professional. I’m still kind of in shock and awe that my life has worked out this way.

I think a lot of it has just had to do with helping people out. I don’t know… That’s my take, to all the Best Ever listeners out there – I guess if you help enough people out, eventually the world will give you what you actually wanted. It’s been pretty cool.

Joe Fairless: Yeah, a Zig Ziglar quote – or at least attributed to him – “Help enough people get what they want, and you’ll eventually get everything you want.” It’s something I certainly live by. Real quick on that – your family house, that got foreclosed on, and then the individuals who purchased it at the auction made a deal with a deal with you all and sold it at a markup… First off, how much did they buy it for, if you know, and how much did they sell it to your for?

Justin Stamper: Yeah, they bought it for 400k, they sold it to us for 450k. We renovated it and we ended up selling it for 750k. So we actually made a killer deal. We actually made around 200k on our very first transaction… Which is super rare. We’re going back to like 2008, where the banks and the valuations and everything was just a huge mess.

Back then, there were some deals where they’re like “Well, this bank owns it, but this bank is now bankrupt and absorbed by this bank…” You know, it was a mess back then. So they sold our house totally under value, and these guys, they only owned it for a week and they made 50k, so they were happy, and then my pops and I put like 30k-50k grand into it, and then after we paid closing costs and commissions, we ended up walking with just around 200k.

We gave our private investors 100k, we split it 50/50, and we kept the other 100k, and we started buying what we could afford with the 100k, and just never looked back.

Joe Fairless: Let’s pretend for a moment that the individuals who purchased your house at the time were cold, calculating and just mean people. What could they potentially have made if they did whatever they needed to do to maximize the profit? So they bought it for 400k… What could they have made and what would they have done to do the mean path process?

Justin Stamper: They could have kicked us out, which would have sucked, because I have no idea where we would have went, because we were broke as a joke… And they could have probably put 50k into it, like we did, and probably sold it for 750k, like we did as well… So they could have made a killing, I guess. After closing costs and commissions, they would have walked with probably like 275k, depending on — if they weren’t pulling hard money, they probably could have made like damn near 300k, which was a killer.

Nowadays, those deals seem few and far between. The market is just so on fire in Orlando now, and everybody wants to flip a house… Because you know, all these guys on television out here making it look so easy… [laughs] But yeah man, they could have made a killing, but luckily, they were totally fine with just like a quick wholesale fee of 50k, which — I mean, I’ve wholesaled hundreds of houses, and hardly any of them have ever been a 50k fee. I think in that situation it was a win/win situation for everybody, so that was cool.

Joe Fairless: And you said you have since partnered with them, and it sounds like you still do… First off, is that accurate?

Justin Stamper: Yeah, they’re a part of the OG House Flippers in Orlando, and I worked my way up because I didn’t have the most capital when I started… I started really just wholesaling a ton of houses. I was going to the auction, picking them up at the auction and then just wholesaling them to people that were not at the auction… So I just got to know all the real players in Orlando, and these guys are real players. Every now and then, they’ll bring me a deal that’s like either “Hey, we don’t want it… Do you want this?” or “We’re down to put a path if you’re down to put a path…” I think at this point we all trust each other and we’ve done enough business that 10 years later they’re still friends of mine in the industry.

When you get involved in your local real estate community and you do a couple transactions with people, it seems one way or another it will always come back around to you. These guys have always kind of brought it back around, and vice-versa to them.

Joe Fairless: If you had to put a number on the profits that they’ve made from the deals you two have partnered on, so profits just they’ve made from the deals you two have partnered on over the years, what would that number be?

Justin Stamper: Well, honestly, I would say just in the deals I’ve wholesaled on – because I know I’ve wholesaled on at least 10 houses that they’ve made close to 100k revenue from… I would say that I’ve in turn repaid the favor at least over half a million bucks in profit for them by just being like “Hey guys, before I even send this out to my list, I know this is your strike zone… Here’s a house, let me know. It’s off-market. If you want it, just let me know in 48 hours.” And in turn, they’ve bought a good amount of houses from me wholesaling that I feel like I’ve repaid my dues of like “Hey, thank you so much for helping me get my start and letting my family keep a roof over their head.”

Joe Fairless: That’s where I was going with it… That’s why I was wanting to learn about the numbers, because everyone listening is an inherently nice person, but if there is an outlier and someone who was skeptical, like “Oh man, yeah, they let you stay there, but they only made 50k when they could have made 275k or 300k”, I wanted to bring that full-circle. So there was basically 250k of potential profit that they left on the table for being good people, but then the world, through you and other deals you worked with them on, repaid them the 250k and potential lost profit, and then doubled that at minimum to another 250k, plus you can sleep well at night and you’ve got good karma, right?

Justin Stamper: For sure. Absolutely. It hopefully always comes back around. I’m a firm believer that if you’re doing good business and you’re helping people out, it’ll come full circle… And it’s taken me age to learn that. I’m 29 years old and I was impatient; as a hustler, you’re always like “When’s the next deal? When’s the next deal? When can I get this? When can I get this?”, but my mentors are all 15 to 30 years older than I am, and they’ve always just been like “Slow down. All in due time. Everything comes back around. Even if it’s 15 years from now, you’re gonna be shocked at the full-circle of life.” When I was 23 I didn’t understand that, but now that I’m coming up on 30, I’m starting to see the actual full-circle of doing good business and just being involved in your community, and it’s really cool. It’s cool to see the karma of the Universe. I’m a big fan of that.

Joe Fairless: Agreed. As am I. So now what is your focus from a business standpoint?

Justin Stamper: So we’re filming season three of Zombie House Flipping. This year we are flipping 14 houses on the show. And then I’ve probably done four more renovations this year that aren’t on the show.

My partner Ashley and I, we own a boutique brokerage in Orlando, Florida where we just transact real estate, and we buy and sell our own real estate etc. But truth be told, good friends of mine sold their entire rental portfolios in Orlando and then traveled around the country for over a year to different markets, looking at turnkey and just good returns on single-family and multifamily real estate, and they settled on Cleveland.

They hit me up and they’re like “Hey man, we’ve just bought like 30 houses in Cleveland, we’re having killer returns. We sold everything in Orlando. We’re actually thinking about moving up here. Come check out what we’re doing.” And these are good friends of mine. These are actual friends. We hang out, we are good, close friends…

So I flew up to Cleveland to check out their operation, and literally like two weeks later I started selling off most of my rentals in Orlando, because the value here is so inflated… Or maybe not inflated, but our market is hot. So all my rental properties are worth double what I paid for them, and sometimes you’ve just gotta take your chips off the table, because you never know when the market’s gonna turn on you.

I’ve already watched it happen once, and I don’t wanna get caught on the wrong side of that the second time. So I started selling off my doors, and we started buying in Cleveland about a year ago, and we accumulated a portfolio between all of us of 52 houses at the moment. And then, since we all are well-versed in construction, we just started selling them off to other investor friends. It started with friends of ours in Miami that were like “Hey, we’re priced out of the market. We see you guys are killing it in Cleveland; hook us up with some houses”, so we sold them 15 houses, and then they brought their friends and they’re like “Hey, my friends want double-digit returns, too. Hook them up with some houses.” And next thing we knew, we were like “Um, I guess we’re kind of a turnkey company now…”, so we launched a turnkey company in February called American Anchor Homes, and we have our own construction crew in Cleveland, and that has honestly been my main focus.

The revenue that I’m making flipping houses in Orlando is just going towards buying more houses in Cleveland, because it’s so competitive in Orlando… And this is my hometown, I love my city, but I think maybe we have another 14 months of this market being on the up and up and on fire like it is… So I wanna be prepared when that market turns, and to me that’s always gonna be passive income, and Cleveland has just been really killer to work in, and I really like the city. It’s just like a cool punk/rock, weird Midwestern city that’s like having its own DIY local revival, and I love that. I just love weird punk/rock stuff like that.

So it’s been a lot of fun being there, and now that we’re launching American Anchor, it’s also just been a lot of fun to be like “Hey, come check out what we’re doing! It’s super cool!” I like that, it’s been really cool. So that’s what I’m up to right now, really just taking my chips off the table in Orlando and just putting them on the table in Cleveland to see what happens.

Joe Fairless: Were you not making passive income on your properties in Orlando?

Justin Stamper: I was, but there gets to be a point where — here’s how I was looking at it… It’s like I’ve got $100,000 in equity in this duplex; how long is it gonna take me to collect $100,000 in rent? Where I can sell this duplex, take my equity, and then go buy for the same exact price a 6-unit apartment building in Cleveland that I’m collecting more rent in. It just made a lot more sense to just take the equity while it was there and trade that equity for much better cashflow… Because the ROIs in Cleveland are just so much better, and the entry into the market is so much cheaper.

We have fully-renovated good properties for $45,000. In Orlando, if you buy something for 45k, you’re ducking bullets. Not that Orlando has crazy war zones, but there are war zones and there is not really real estate for sale for 45k in Orlando anymore. So it just made a lot more sense from a cashflow perspective to get rid of the properties here, take the massive equity and then go buy properties that were 12% and above cap rate.

Joe Fairless: Yeah, it makes sense. Understood. How many did you sell in Orlando?

Justin Stamper: I had nine properties ranging from single-family homes to multifamily… So I had nine individual properties that was like a mix of duplexes or single-family, and then my friends had like 17, I think.

We were in this market called Deltona that we originally all bought for like 30k-45k, and when we unloaded them, it was all for like 100k and above. So there was just massive equity, and you just never know how long that equity is gonna be there, because once the market switches again, if it goes back to only being worth 35k, 45k, 55k, you sure did miss a huge opportunity there to take your chips off the table. So it just made sense to get rid of our portfolios here, and it was crazy, because a 9-unit portfolio here, which was really expensive to buy because it’s like every property we’re buying — like, I just bought a duplex last year, for example, for 365k in Orlando. That’s an expensive duplex.

Meanwhile, in Cleveland I can buy a 20-unit apartment complex for around the same price. Now, granted, it’s probably not gonna be turnkey, it’s gonna need a lot of rehab, but still, your dollar just goes a lot farther, and that’s what I really enjoyed about it. You can just buy so much more.

Joe Fairless: Why didn’t you do a 1031?

Justin Stamper: Honestly, I wish I did. I just wasn’t educated enough at the time to do it. I have a friend and a mentor who’s going to show me the way, but at the time I was just like “Yeah, cool, let’s sell it.” I own a brokerage, so I can sell it for essentially nothing, and then “Let’s get this money deployed.” And it wasn’t until afterwards that my friend was like “Exactly, why didn’t you just 1031 that?” and I was like “Arrgghh!” Because I don’t know, I’m just shooting from the hip, you know? I can’t say that I know everything about real estate. I can’t even say I scratched the surface. I just am shooting from the hip and learning every day. Learning every day.

Joe Fairless: With the turnkey properties that you all have – what is your role in that company?

Justin Stamper: I handle all of our marketing and sales, because I’m doing it from a distance… I’m in Orlando, but my friends are in Cleveland. So I’m doing a lot of like — starting to do YouTube videos, starting to just do like educational stuff… We’re on television, so I have a good amount of social media followers, and I really just enjoy talking to people… The gift of gab, I guess. I enjoy, legitimately, talking real estate. I think it’s fun.

When you see me at a bar, I’m in the corner, talking to any random realtor that I’ve met, and that’s my exciting conversation over a beer; it’s like “What are you doing on the real estate market?” You know, for guys like us, we’re kind of obsessed. Being obsessed makes the difference between successful real estate investors versus people who never really get off the ground… Being super-persistent and kind of eating, breathing and drinking real estate in. So I enjoy it, where the rest of my friends who I’m in American Anchor with are like “Hey, we don’t like to talk to strangers that much, so Justin, you go deal with that.” [laughs]

So that’s what I’m doing, man… I’m the guy that you get  to talk to if you wanna buy some real estate from us. It’s been fun though, I like that; I love helping people grow their portfolios. I’ve done it so many times wholesaling… People come to me and they’re like — my buddy John, he’s buying two duplexes from us in Cleveland next month, once he refi’s his entire portfolio that I sold him in Orlando, and he literally had never owned real estate before. Now he quit his job with corporate and is financially free. He makes all of his money from just owning all of the rental properties that I’ve sold him. So it’s been really cool to help people grow a portfolio. I love that. I love to be like “Whoa, remember when you came to me and you had no houses and now you have 15? That’s so cool! You and I helped change each other’s course of our lives.” I love that, man… It’s like the butterfly effect of life, so I’m super looking forward to growing portfolios with people.

Joe Fairless: Based on your experience, what’s your best real estate investing advice ever?

Justin Stamper: Keep hustling. Keep hustling. America rewards the persistent. I really cannot stress that enough. I have a high school education, my family was too broke to send me to college, and honestly, I was probably too punk/rock to even go and listen… So if it weren’t for just like waking up every single day — I mean, I worked three jobs… I was a line cook at Disney, I valeted cars at a nightclub here called Pulse, and I went to the foreclosure auction from 8 AM until noon, and then after that I either went and valeted cars or I went to Disney, and I was just a line cook inside of a hot, hot, sweaty kitchen. That’s what I did to get by for like the first four years before I had enough money to like full-time transition into real estate.

A lot of people might have given up. I had a lot of friends tell me I was stupid, because my first year in real estate I think I actually only made 8k that year. I think my next full year in real estate I made like 16k, and then it just kept doubling. It literally just kept doubling.

I had so many friends that were like “Why don’t you get a job with a corporation? It would be so much safer. You’re being foolish. Why don’t you try to go to community college?” I was just like “No. This is gonna work out, one way or another”, and it did. And it took years. It took four full years before I was like “Okay, now we’re full-time in real estate, making good money.

But just keep hustling. America rewards the persistent. You can get rich off of YouTube nowadays. There are so many things that if you just keep doing it, eventually hopefully it will pay off, and real estate is one of those things.

What did Babe Ruth say? “I love every strike, because it means that I’m one swing away from a home run.” That’s how it goes, just keep hustling. Best Ever listeners, you’ve already made it this far; you’re listening to the podcast. Now just keep your head up and keep grinding.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Justin Stamper: Boom, boom, boom! Born ready.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:23:25].19] to [00:24:28].11]

Joe Fairless: Okay, best ever book you’ve read?

Justin Stamper: 48 Laws of Power.

Joe Fairless: Love it. Robert Greene.

Justin Stamper: This was the top one, Robert Greene. 48 Laws of Power  just kind of showed me all the other struggles that — if you don’t see behind the curtains, or I guess read behind the curtains, you just think that they were just born great and wonderful, and that life was handed to them… And then you read the 48 Laws of Power and realize that everybody had their own insane struggle to deal with, and they took it and they ran with it. I love that book. A mentor gave it to me when I was 19 years old, and I would say it definitely changed the course of my life, by just realizing that everybody else that I idolized had to go through hell to get to heaven as well.

Joe Fairless: Absolutely. And another good one – have you read his other books, like 33 Strategies of War and other things in the series?

Justin Stamper: Yeah, the 50th Law, and things like that…

Joe Fairless: Oh, man… The way he writes is like no other. In your face, unapologetic about what he says, and it’s factual, because it’s based on history. It’s just a must-read. I love him as an author.

Justin Stamper: Yeah, they’re great, and I love the fact that you can just pick it up, open it to any law and read that law, and it’s not like you missed anything from the last chapter, and you can just set it down.

Honestly, it’s a book that I pick up… It stays on my coffee table. I’ll pick it up once a week and just flip it open, read it for half an hour and put it down. I’ve been doing that for 10 years now.

Joe Fairless: Best ever deal you’ve done?

Justin Stamper: Man, I would say the first one, honestly, because that’s what started it all, and that’s what kept a roof over my girl’s head, that’s what gave me and my dad a new breath of life… Because we were just down in the gutter. It was good. It gave my sister the ability to go to college, and now she works for Boeing and is in the space race, she’s gonna be an astronaut… It’s crazy. She’s so smart, and had we not been able to do this deal, I don’t know if she would have been able to go to the college that she wanted to go to, and go the career path that she’s always known she wanted to do.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Justin Stamper: In a transaction, I would say probably not talking to title enough. I feel like it’s a thing that everybody learns the hard way – not communicating with everybody on a transaction, to make sure everybody is on the same page… Because at first, you just assume things are going great and people are doing their job, but as time goes by and real estate happens, you realize that communication is so key, and even if you’re the annoying guy that sends 10 e-mails a day, CC-ing four people, at least that deal is gonna close on time.

But I would say my biggest real estate mistake, period, was selling the properties that I should have been keeping when I started wholesaling, when I started flipping… Had I understood rental property better when I was 21, 22, even 19 – had I understood cashflow better, and rental properties, and the abilities to creative finance things… Oh my god, I can only imagine what my rental portfolio would look like today. And now, moving forward in real estate, I’m trying to be like Warren Buffett – I don’t buy it ever thinking about selling it, I buy it to keep it.

So I would say that was my biggest mistake – not understanding rental real estate and only focusing on transactional flipping real estate… Because that’s a job, and sometimes real estate is nice to not be a job. It’s nice to have your tenants pay rent when you sleep.

Joe Fairless: Best ever way you like to give back?

Justin Stamper: I work with a group called Best Buddies – developmental disabilities; kids with autism, Asperger’s, Down Syndrome… I have a Best Buddy, I love her to death; her name is Erica, and it just tickles me to death to work with these kids and give back, and I’ve never felt more fulfilled. It’s really cool.

Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on?

Justin Stamper: Best Ever listeners, come find me on Facebook, it’s Justin Stamper. You can see me on Instagram, which is @FlipOrlando, or just go on either AmericanAnchorHomes.com and shoot me an e-mail, or go to JustinStamper.com, or better yet, go on and watch Zombie House Flipping, because we’ve got new episodes coming out soon.

Joe Fairless: Awesome. Well, Justin, thank you so much for being on the show and talking to us about how you started, how you have got to where you’re at, and in particular the story where the individuals who bought your foreclosed house, how they could have made more of a profit, but they elected to do a deal with you and your family, and how you currently partner with them on deals where they’ve made the money back and then some, plus they’re in the good graces of the Universe.

Thank you so much for being on the show. I hope you have a Best Ever day, good luck with season number three, and looking forward to checking that out. We’ll talk to you soon!

Justin Stamper: Alright, thanks guys! Best Ever!

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JF800: How Getting Involved in Your Local REIA Leads You to BIG Deals

Business is primarily made of solid connections, and what better connections are made in real estate than your local REIA? Join our guest as he walks us through some deals that are large syndications he would not have found without the help of the connections he has.

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Denny Troncoso Real Estate Background:

– Investor Relations at Apartment Holdings USA; acquires apartment buildings in need of reposition
– Purchased 1st investment property in 2011; since started two companies focused on acquiring real estate properties
– As a broker he has produced over $400,000 of sales revenue within 5 years
– Ranked One of Top 25 Independent Agents 4 years in a row from group of over 300
– Based in Orlando, Florida
– Say hi to him at http://www.apartmentholdingsusa.com
– Best Ever Book: The One Thing by Gary Keller

Want an inbox full of online leads? Get a FREE strategy session with Dan Barrett who is the only certified Google partner that exclusively works with real estate investors like us.

Go to http://www.adwordsnerds.com strategy to schedule the appointment.

Subscribe to Joe’s YouTube Channel here to learn multifamily and raising money tips: https://www.youtube.com/channel/UCwTzctSEMu4L0tKN2b_esfg

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JF327: Why Listening Will Take Your Business to the Next Level #skillset Sunday

Get out your pen and paper, because not only are we about to gain an incredible skill we are about to learn some AWESOME acronyms. Let’s learn how to take the cotton out of your ears, put it in your mouth and LISTEN!

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Theresa Campbell’s business background:

-Founder of Her Life, Her Legacy where she brings high achieving, remarkable women into the life they dream of but fear they can’t have
-Transformational coach, marketing strategist and author of Dying to Live: A Smart Women’s Guide to Loving Her Life and Living Her Legacy
– Say hi to her at http://www.herlifeherlegacy.com
– Based in Orlando, Florida and is the Host of the Let’s Talk Legacy show

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Patch of Land – Want to learn more about crowdfunding? Let the leading expert in the crowdfunding space, Patch of Land, give you all the info you need to get started. Grab your FREE copy of Top Ten Answers to the Top Ten Crowdfunding Questions athttp://www.PatchOfLand.com/bestever

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JF282: How to Use Bigger Pockets to Fund Your Deals

Today’s Best Ever guest used Bigger Pockets to fund his first deal. Wait, what?! Yeah, that’s right. Listen up because he shares with us how he did it, and the formula you should use to decide what your business model should be.

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Andrew Davis’s real estate background:

–          Investor agent at Keller Williams

–          Full time investor based in Orlando, Florida

–          Started investing full-time last August

–           Has a single family home and a duplex and has two single family homes under contract right now

–          Download the presentation we talked about on this show here: https://www.dropbox.com/s/19pchjudmq7ri2f/Knollwood.pdf?dl=0

–          Went to state in chess in 5th grade

Subscribe in iTunes  and  Stitcher  so you don’t miss an episode!

Made Possible Because of Our Best Ever Sponsor:

Patch of Land – Want to learn more about crowdfunding? Let the leading expert in the crowdfunding space, Patch of Land, give you all the info you need to get started. Grab your FREE copy of Top Ten Answers to the Top Ten Crowdfunding Questions athttp://www.PatchOfLand.com/bestever

1,000 Houses  – Are you tired of being a landlord? Are you tired of headaches? Thousands of investors have felt the same way you do, and have found their solution! Go to http://www.1000houses.com/mitch to find out more.

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JF279: The Three Types of Offers YOU Need to Make to Sellers

Today’s Best Ever guest is one of the top YouTube personality for real estate investing. You’ve probably heard him before, but today he shares with us how he creates deals, the three different types of offers you need to make to sellers in YOUR deals and why YOU need to get a mentor TODAY!

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Phil Pustejovsky’s real estate background:

–        Participated in over 1,000 deals a real estate investor

–        Author of the best-selling book “How to be a Real Estate Investor

–        Most popular real estate investing YouTube channel in history with over 5 million views

–        Based in Orlando, Florida

–        http://www.Freedommentor.com

–        Does a whole lot of fishing and surfing

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Made Possible Because of Our Best Ever Sponsor: 

Patch of Land – Want to learn more about crowdfunding? Let the leading expert in the crowdfunding space, Patch of Land, give you all the info you need to get started. Grab your FREE copy of Top Ten Answers to the Top Ten Crowdfunding Questions at http://www.PatchOfLand.com/bestever

Michael Blank – Interested in apartment bulding investing but don’t know where to start? Say hello to Michael Blank at themichaelblank.com for a BUNCH of free resources and a free e-book.

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JF130: Top Note Buying Tip Revealed

Ever wonder what people are talking about when they say they are note buyers? Well, today’s Best Ever guest clears it all up and shares how and why he went from time shares to note buying.  And…he shares with you his #1 tip on note buying.

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Steven Soto’s real estate background:

–        Founder and principal of Higher Trust Investments based in Orlando, Florida

–        Identifies distressed real estate assets for high net worth clients  with a focus on tax deeds and non-performing notes nationwide

–        Say hi to him at http://www.highertrustinvestments.com/

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