(00:00):
Is this thing on? Alright, we're back. First responder, financial Freedom, got the normal three Stooges, plus Brett ler. Brett is coming to us from Michigan. He's a husband and a father. Happy belated birthday. His birthday was I think three days ago.
(00:15):
Thank you. Yeah,
(00:16):
You're welcome. So Brett got in twins from the fire department to real estate. He just partnered up and did a new rebrand called Lift REI, real Estate Investment, and he's an advanced EMT. He wants to make sure you know that on Facebook that he's advanced, he's not a paramedic like Tyler is. We'll have some start talk about that later on, but tell me how you transitioned from or why and how you transitioned from firefighter to real estate and what's going on now.
(00:42):
Yeah, so I've been full-time at the fire department for about three years now. I would say I was probably about a year in and I was like, man, I need a side hustle. So as you guys know, we work about nine or 10 days a month and I'm like, I got to do something else on top of this. And then with having some free time while on duty, I was like, man, is there something I can start doing while I'm on shift and then off shift as well. So actually I got my real estate license and I was like, okay, I'm going to be an agent and I'm going to work with buyers and sellers. And so started down that path shortly after I read Rich Dad, poor Dad, and I was like, okay. I was like, yeah, I kind of got bit by the investing bug and then right about the same time I stumbled on BiggerPockets, I think that's maybe where I came across Mike. And so I started listening to some first responder financial freedom stuff. And then yeah, we closed on our first flip probably about five months after I got licensed then. And so really just pretty much transitioned at that point to wanting to do the flipping side of things versus then the agent stuff. I was still trying here and there, but kind of fell into the flipping stuff.
(02:14):
Let's talk about that first flip because still to this day when people ask me what my best deal is, I always say it's my first one and I think that's the hardest one to get. So could you walk us through maybe how did you find it? How did you fund it? Just kind of what that looks like.
(02:32):
Yeah, yep. So the house was actually right across the street from our primary residence. It was like the worst house on the street situation. Saw it. There was a lot of distress I guess. So just kind of kept an eye on it. And then one day I saw somebody was over at the house. I went over there and talked to him, introduced myself, and he informed me it was his brother's house and he inherited it. And so I was like, okay, well, and he was like, I'm going to clean it up and sell it. So I was like, well, hey, I'm an agent but I'm also looking to purchase a flip. And so I ran some numbers. I took a contractor over there with me to help try to get an idea as far as renovation goes. And then I made him an offer for 40,000. He came back at 50 and we settled at 45. And so then I had a purchase agreement for 45,000. I took it to a local bank here in town. Actually, it's funny, the town I live in is like 4,000 or so population, and this bank was stepping into time, I swear they were on typewriters, it was super old school.
(03:54):
And then they were like, yeah, well we would lend, I had heard from some other people too that they were pretty open to lending on projects or houses that needed a lot of work. So I ended up doing kind of a commercial style mortgage with them, so I had to put 20% down, so I put 9,000 down on it and then I had a small mortgage of, I was paying 300 bucks a month. And then as far as funding the renovation, then I did a home equity line on our primary residence. And so the bank, I shopped around a little bit, found a bank that was running a 2.99% for a year, and I was like, okay, awesome. That's cheap money. So I did that and then I also got some 0% credit cards, and so that's how I funded.
(04:46):
That's awesome. Yeah, the credit card thing, I've done that numerous times. I would not recommend that to most people if your spending habits are such that you can't control it. But I take advantage of that 0%. And it's funny you said about the home equity line of credit. I just did that. I had an old line, got rid of that, got a newer line, and they did an intro of 4.99% for nine months. So I went out and took it all and lend it out at 10%. It should all be back by then, but I think some people are like, man, I don't have that kind of money, blah, blah, blah. And it's like, well, think about it. If you have your home and you've owned your home for a couple years at this point you probably have enough equity because of what the market has done over the last couple years. You could probably pull off, even if it's a little bit, it may not be $300,000, but maybe you can pull off a home line of credit and get 50 grand. It's like, so that's pretty cool. It was literally right across the street from you.
(05:49):
Yep, absolutely. And then we got into the contractor side of things and renovating it, which was a huge eyeopening experience I would say, and a big learning experience. I thought I was going to be over there doing a lot of the work and stuff, which I don't know why I thought that. I'm not even very handy, but I was doing some demo and stuff like that and then I was kind of just hiring subs to do some stuff here and there. But originally I had an idea that we were going to do this project in three or four months, ended up taking 11 months total, so way longer than expected, but we bought it. And so we ended up making 75 is what we netted on the project at the end of the day, just because we bought it at the right price. Right.
(06:36):
Netting 75, how much was the rehab?
(06:40):
So it was right around 80,000.
(06:44):
Okay, so you're all in between 1 25?
(06:48):
Yeah,
(06:49):
Maybe one 30 withholding. Yeah. That's a pretty sweet freaking first deal there to make 75 on a 1 25 spend. I mean, I'll take that. Absolutely.
(07:01):
Yep.
(07:02):
Brett, one of the things when I first started was in the early two thousands and the only thing in my head was flip, flip, flip, flip, flip, flip, flip because I didn't know better. I didn't know about the arbitrage, I didn't know about wholesaling, I didn't know about all the rest of the options, refinance cash out. I had no idea. So now that you've done your flips, how are you looking at other options in the real estate world?
(07:24):
Absolutely, yep. And this was most recently, I guess. So at the end, so October of last year I actually joined seven figure flipping the mastermind and actually from the podcast you guys had Bill Allen on. And then I was like, man, this guy sounds like he really knows what he is doing. Sounds like he has a good community and all this stuff. And so I joined that, which was a great experience and I would totally recommend it. I think I was able to learn a lot really quick with making that investment in myself. So we closed on a flip earlier this year and ran into a lot of issues. Our renovation budget was blown, and so I ended up, I kind of pivoted a little bit and I was like, man, this wholesaling thing is interesting to me. And I was like, I'm going to give this a try. Some of the guys in the group, like Adam Whitney, one of the coaches, he's running a wholesale business and I literally took what he was saying to do, and so I was going to give it a try. So that turned into seven closed wholesale deals and from August until this point with about 60,000 in assignment fees.
(08:49):
Walk me through what that means, Brett, before you go on, walk me through what a wholesale deal is and what assignment are and how that's structured.
(08:58):
So we do marketing, so we'll send postcards and then I also do some cold calling as well. So we go and find properties and put these deals under contract. We just figure out what the numbers look like and whatever makes sense for us to potentially purchase as a flip, we'll put it under contract at that amount. And then in that contract it shows that it's assignable and we have a buyer's list. And so what we do, we are able to market it to those buyers list and then say we put it under contract for 40,000, but I know one of our other buyers will buy it for 50,000. So we just assign the contract. We never take possession close on the property, we're just assigning that contract. And so then we make that difference. That 10,000 difference would be the assignment fee.
(09:59):
So you get it under contract for 40,000, you find a buyer for 50,000, you sign the contract that you have with the homeowner over to the end buyer, and that's going to be your spread and you never touch it. So on the closing table on the HUD one or the Alta, whatever you want to call it nowadays, there'll be a line item there showing that this is your assignment fee and how much you guys made as a middleman.
(10:21):
Yep, yep, exactly.
(10:23):
So with wholesaling, you become good at acquiring properties out of discount and then reselling them. And would you attribute that to, so what marketing channel are you doing with that? And sorry if you mentioned, I didn't hear it, but are you doing direct
(10:37):
Mail? Yep. So we're doing some direct mail like some postcards and I guess before that, so we are using batch leads and we'll pull some niche lists off there that way, vacant properties out-of-state absentee owners, some of those type filters. That way we can focus on more of people that are potentially going to sell.
(11:05):
Okay. So you're stacking those lists, right? You're taking lists that connotate some type of motivation, stacking them on top of each other and then you're mailing out. Do you know how many mailers you're sending out roughly like a month?
(11:18):
Yes. So we've just kind of dabbled in it. So I've probably spent $3,000 total at the end of last year. I bought credits of about 3000, and then we've sent probably only 500 to a thousand a month. I would say those postcards were right around 60 something cents including postage. And so we were just focused on super niche lists.
(11:45):
But that's netted you six deals, right?
(11:48):
Well, so one or two of those I would say have been postcard, but those I also reached out to either via text or phone call. So I can't say exactly if it was from the postcard or if it was maybe they saw the postcard and kind of build us some credibility and then I called 'em or texted 'em after. I've been fortunate follow up. A lot of my deals fortunately have been a referral. So friends, family, so I mean that was probably five of 'em.
(12:25):
So even better. And the reason I'm asking this is none of these numbers are huge on the face value, the purchase price, decent amount of money, but you had to put $9,000 down, the rehab was a bigger chunk of money. But I do notice, and I will say this, I noticed you always asking for properties, Hey, we're buying, does anybody have anything? I think it was you. You offer a thousand dollars referral fee. Yeah, yeah. So you're doing a lot of things that don't cost a ton of money. You're taking action and it seems like you're starting to gain momentum.
(13:00):
I think that's one of the biggest things I've found is literally just telling as many people as I can what we're doing and doing local meetups and all that good stuff, but also posting on Facebook and just being consistent about posting on Facebook. So now for example, every Sunday, each week I schedule out our posts for the week because I found during the week you get busy in your day-to-day life. And so I try to get some content and pictures and videos as we're doing our weekly stuff, walking properties, making offers, all that fun stuff. And then I'll Sunday spend a little bit of time and schedule all that out.
(13:43):
Can we talk about the batch leads and stuff real quick? Again, like the cost per acquisition and stuff like that. So I'm looking at the batch leads website right now and they have three different options for pricing. It's a hundred twenty three fifty or seven 50 a month. Conversely, we had Faisel Morse on here a while back and he was doing leads for seven or 8 cents a lead. I think it was for niche list as well. And it can be, let's talk about niche list because you touched on it real quick. You said it was out-of-state owners and who else?
(14:15):
Vacant properties is one that I found is pretty good.
(14:17):
Okay, so then you have probate people who passed away. You have divorce, you have foreclosures, you have HOA liens, you have contractor liens, you have I Wrestl liens, what else is out there? What are some other ones people can do? Anybody jump in?
(14:34):
I love water shutoff and tax delinquent.
(14:41):
Yeah, I think out-of-state Owner Equity and any of the probate, water lien mechanic lien, any lien or any sort of hair on the deal with those two things, you probably have something you can do something with.
(15:00):
So to that being said, you have a cost per acquisition, which was Brett goes into is when he pulled the leads, he probably paid X amount of dollars to market to these people. I think you said 60 cents a letter, is that right? Yeah. Okay. So you sent out a bunch of letters, you do some phone calls for follow up, which most people don't ever do follow up so good on you and then it costs you a certain amount of dollars to get those leads. And it sounds like if you spent $3,000 for seven leads, that's astronomically great. I think on average right now. Tyler said last time it was like 3000 or 4,000 per lead or 3000 or 4,000 per acquisition. Is that right Ty? Yeah,
(15:39):
Yeah, that's fair. Yeah,
(15:41):
I mean like we talked about in the other show, a couple of our buddies, they're very heavily involved in this and I think one of them was saying that his cost per acquisition was approaching seven or so, 7,000, but it's all relative, man, if you're in California and your acquisition cost is $7,000 a contract, but your average profits one 50, you know what I mean? But I'm trying to find it while we're talking
(16:09):
And while you're looking it up. Yeah, I'll say that too. And I think a big thing with that is as you try to scale, your cost per acquisition is going to go up because you're going out on the outliers to where it's cheap for a certain amount of time. For PPC, I know in certain markets I can spend X and I'm going to get this return, but after a while it's diminishing returns. And it's the same thing when guys are trying to run huge operations as the marketing increases, for the most part, you're going to get diminishing returns. So your cost per deal, it's counterintuitive. I feel like it would go down, you buy anything in bulk, it should go down. I feel like that because you're stretching, it goes up a little bit, but for me, I'm not trying to do crazy volume right now, but internet leads $3,000 a deal. It's set it and forget it and the profit's much greater. Bash leads. Aaron, obviously the interface is super cool. Jesse, it's still Jesse and Ivan, right? Mike? Those are the guys in
(17:03):
I think so, yeah, dragon
(17:06):
Dude, they've done a bunch of deals. They basically made this out of anything they were investing, they had investor friends, so it's a real pretty interface from what I remember. I haven't been on it in a while, but I mean it's super user friendly.
(17:23):
I think it's cool. It is just a numbers game. I think when it comes down to it, whether you're talking about looking at one property in particular, looking at it as a flip, it truly is just a numbers game. Before I heard of people that were putting in offers on properties without even walking them and I was like, holy cow, how are they doing this? I can't even imagine. But I mean I can tell you that we're doing that now, just understanding that it truly is just a numbers game.
(17:58):
And also if you do this stuff, you can go on YouTube and look up how to do this properly, how to use this interface. I'm looking right now, I dunno, a dozen or so videos on how to get the most out of your bachelors complete guide for using batches 2024 game changing batches, updates, big announcement. So there's definitely information out there if you want to have access to understand how this stuff works.
(18:21):
Brett, to your point too, so obviously I invest remotely. I think once you separate emotionally it's a lot easier then it is just a numbers game for me. Honestly, I used to go to Boise, but I don't like looking at houses that are smashed and beat up because all I see is dollar signs and problems that can happen when I get a bid and I get the inspection and a video, it's like, okay, it's going to cost me $50,000 to rehab this house. Here's my expected profit, here's my purchase price. If it works, it works, but I don't. I'll go with my buddy KA out here in SoCal and we will look at the most trashed houses ever. And I'm like, dude, I'd rather just see pictures of it, know what my numbers are and make a financial decision as opposed to an emotional one.
(19:05):
So Brett, do you think that joining that group, the seven figure was a seven figure flip, that was his group?
(19:12):
Yep. Seven figure flipping.
(19:14):
Do you consider that could kind of be your springboard for the growth or you think it was before that attribute to where does that play into the cards?
(19:23):
I think it's a springboard. So I mean I can speak for me personally, right before when I was on BiggerPockets and it's just all over the place, one day you're hearing about short-term rentals, you're hearing about flipping the next day and then you're hearing about multifamily and you're just like, oh my gosh. And I get shiny object syndrome and I know some of you guys probably are the same, right? Absolutely. So joining seven Figure, I was able to focus on just flipping and wholesaling. So it was like I'm dialed in on that and then at one point then I got to like, okay, I'm going to focus on wholesaling. And so then I was just literally copying and pasting what another successful person in that business was doing and I mean it worked. So I was literally just doing what they were doing and what they were teaching.
(20:16):
And so I think you can go, a program like that is pretty expensive. So let's say I spent $12,000 for it. Well, at Face Value you're like, oh my gosh, you spent $12,000, you could have learned this stuff on YouTube. Well, I mean I can directly say that I made 60,000, I made a five x return by choosing to do that. And I think I've gotten some crap from some buddies and stuff. It's like, holy cow, why would you spend that much money? And it's like, yeah, I think it's just a mindset thing, right? And yeah,
(20:58):
That's one thing if you take a risk, everybody in the firehouse will tell you how dumb you are until you make it. Oh yeah.
(21:03):
It's almost like we just had this conversation recently about all that information's available on YouTube, but you basically paid for speed. But the big difference is you implemented what you learned and you just said to Tyler's point, once you remove a motion, would you give me $1 if I gave you five back
(21:25):
Every day? Yeah.
(21:27):
So why wouldn't you do the same thing with this? It's the same concept.
(21:32):
You got to know your numbers too. I mean, from a business standpoint, everything you put into it, you want to get back out plus some it's all investment or some kind of return in your investment
(21:40):
Of course.
(21:41):
So we'll say the laser sitting next to me, what I do all the wood work on, I think it cost me like $5,000. A guy was like, you're an idiot, why would you spend $5,000 for a laser? What whatcha going to do with it? I made all that money back in the first 30 or 60 days. Same thing for my mini excavator. I used that and I saved the amount that would've used to rent one, now I own one. So my return on investment is infinite from here on out. So the same thing for your properties that you acquire is if it's a rental and you pay it off and you cash out refi, I mean your return on investment is infinite once you get all your money back out. And that's something I didn't know when I was flipping, when I was younger, I just thought, I didn't know you could turn it and refi and cash out and blah blah blah. So are you going to go ahead?
(22:24):
Oh, I was just saying I kind of wanted to touch on your buddies in the firehouse, people giving you crap for doing what you want to do. So I heard this recently and it's like I've always been one, I've cared a lot about what other people think and the perception and some of that stuff. And I've always wanted to go to people for advice on things. And I think that's okay. You just got to be careful who you're going to for advice on certain things. If your buddy has no money and you pitch 'em an idea about that you're going to make all this money and stuff and he's hating on it, it's like that's probably not who you should be going to talk to about that certain thing.
(23:06):
And look at the personalities. If they're naturally a negative safety net kind of person, they're probably not going to be the type of person who's going to own a business. So who's going to try to promote a business or support you opening a business? So you got to kind of know who you're talking to because where they say the ones ahead of you don't punch down. It's always the ones that behind you punch up.
(23:25):
Yeah, I mean you rarely catch flack or hate or ball busting from somebody that's ahead of you or doing more than you. It's typically the folks that are doing less. And I don't mean that in a mean way, I'm just saying just be careful of what's the quote if I wouldn't take advice from you, I'm not really worried about what you have to say about what I'm doing type thing. Just let that noise and it's easier said than done right at times. But is what it is.
(23:59):
What's funny is that a couple weeks ago I met a family who are the 461st richest family in the world. And I was talking to the owner, the head of the company, his wife and two of his sons, and I met their grandkids. It was like 15 grandkids and nothing he said was negative. Everything he said was positive and a move forward attitude. And I was like, man, this guy is really, really fricking cool. But it kind of put my mindset, I was like, and he's driving a normal car, he's not flashy and he's wearing normal nice clothes, but normal clothes. He's just one of those people. If you saw him in the street, you just think he's another dude. And I was like, this is the kind of person you want to be around is that he's going to fall forward, he's going to push you forward. He's not the kind of person who's going to fail and then dwell on that. He's always going to try to change and keep motivating himself and his family members to move forward. And I see that difference in a lot of first responders is that we have a safety net, we have a union, we have a job, we have a career. All we got to do is our 20 or 25 years. And people are comfortable with that. So they're not willing to take the risk because they have their safety net.
(25:07):
I think you just basically described abundant versus scarcity mindset.
(25:11):
Yeah, but it's good to know who you're surrounding yourself with. To your point, Brett, is that of course you want to be around the positive people who are going to push you forward.
(25:21):
Are you still in Bill Allen's group?
(25:26):
Yeah, so this month is my last month. So to be honest, that was the first mastermind that I've joined and the first coaching that I paid for. And so a couple months back I made the decision to try another program and I was kind of sold on that and looking back, wish I wouldn't have, but it is what it is. And yeah,
(26:00):
You're wishing you wouldn't have changed horses too soon, you wish you would've stayed in the seven figure, not segue to this other one.
(26:08):
Yep. Yeah, I joined this other one and shortly into it they created this new program thing and they are trying to get people to join that at an added cost as well as for you to bring deals to the table and then they get a high percentage of those deals and I'm just like, man, I paid all this money to join this thinking I was getting, this is what we were doing. And then they brought in another program and so it just, I don't know, not didn't sit well with me I guess.
(26:45):
But yeah, and that's one of those, we recently talked about this also just kind of like the upsell. It's one thing if you know going into it, that's the deal per se, but if it's a bait and switch, that's not cool. But I
(27:01):
Feel like we just had this conversation too.
(27:03):
Yeah, yeah, exactly. So it's one of those, it's out there, man. But to your point, you sit there and say, Hey, I spent, what'd you say about 12 grand invested? 12 grand. Actually Bill Allen's the one that tore me up for saying it like that. I get the mindset around it. I guess what happens? I forgot about that. So if you invest 12 grand at first, you're right, most people are like, oh my god, I always say there's two types of people you spent how much? And then the other side of the aisles, that's it.
(27:38):
I was afraid to ask the wife if I could do it, to be honest. I was afraid to ask the wife. I was afraid to ask the wife upfront like, Hey, can I join this thing? And the cool thing is she was actually super supportive, so that was cool.
(27:52):
That's why you just send it. You don't ask. No, I'm just kidding.
(27:55):
Yeah, ask for
(27:57):
Wife, dude, I remember. So when I first started wholesaling, I did Sean Terry's program, which I don't even know if he's still coaching. And so Sean Terry's program, I forget what it costs, it was like 2000 bucks and I had never paid for anything. And I remember I had my first direct mail campaign loaded up and I was ready to hit purchase and I left it up on the screen for a while. I was afraid to hit that button, it was like $970 or something. So now I'm like, oh man, I've just spent three grand, what if this doesn't work? What if everybody's right? And then I just made it like, alright, it's my mission to make sure I earn this back and not to prove everybody. And then I ended up winning a couple competitions in his coaching program to the point where I got enough money to pay for it back anyways just from that. So it was like, alright man, just take step out in faith a little bit and just take that next step. And I think once you do something like that, now your wife's watching, is he actually making them calls or is he playing Call of Duty? Right? Stuff like that. So
(29:08):
Brett, two questions for you. Is one, now that your wife has seen the success, is she involved at all or is she kind of like you? Do you make it work? And I know you've got young kids, all four of us have young kids. Was that a motivator or was it hindering you from taking the first step? How does that look?
(29:27):
Yeah, so I mean I think it's awesome. So real estate has provided us with the flexibility and the financial backing I guess to allow my wife to stay home with our daughter. So that was a decision we made a couple years ago. So I mean she is super supportive on the business now and she's actually a partner in Lyft as well. So it's cool. Yeah, she's starting to get more involved and we're trying to still iron out exactly what that looks like. But before I would say I was trained to keep her out of it and now we've transitioned and have been working through it to having her more involved. And for us it's been more beneficial that way.
(30:18):
How about the young, did they play a part in this whole thing? What was that part of the motivator? To have them have a better life.
(30:27):
I mean that's kind of a big part of my why I guess, and why I want to make a lot of money and be successful and I think the freedom and flexibility of the income that real estate can produce. So yeah, totally. And I love being able to bring, she comes out to properties and stuff and she loves, we are always like, Hey, you want to go see the other house? And she's excited and she has her little toolkit and all that stuff, so I'm super excited to be able to bring her up and be involved with the business.
(31:02):
Mike and Tyler, do your spouses and kids ever go to your projects?
(31:08):
My wife, no. My oldest son, I have him help with one of the storage facilities, the one that's closest to me. I handle the operations that need done there, so I bring him with me and have him change locks, clean stuff up, that kind of stuff.
(31:26):
Work ethic, teaching 'em how to do stuff. It's cool.
(31:28):
Yeah,
(31:30):
We don't do anything local, but they have been to, when we've gone out to Idaho, I've taken them out when we were out there on vacation, I showed 'em the houses and stuff like that. And they're interested. I think they are more attached to the lifestyle that it provides and then that's all they really care about at this point is like, are we going snowboarding this winter? But yeah, I mean I hope they're interested in it. But yeah, I've tried to show 'em. I think a big thing, I know Brett said, and Mike and Aaron, I'm sure when you're little guy gets older, it's taking them and having them see another way to do something is huge, I think. And the flexibility it provides and I don't know, I'm a big proponent of it. I think the more they understand at a young age, I think the more their worldview is going to change and realize they aren't confined to certain choices.
(32:19):
I remember my dad taking me to a house that we were working on in Wheaton, Maryland just outside of DC and it was freezing outside. It was zero degrees, there was no heat in the house. We're working on this house trying to get it ready to make it a rental. And at the time I'm like, I dunno, eight, nine years old. I'm like, this is child slave labor, this is bull. I'm in here with three coats on the hat, pulled down over my ears with little flaps and shit. But looking back now, I'm like, wow, it was good learning experience. I always go back to thinking about those days when I was younger. I've learned so much from my dad now. It's probably a big reason I swing my own hammer. But I think it's important to involve, whether it be from the computer side of it, look at these numbers to your kids and teaching 'em stuff, to actually putting your hands on some of the tools.
(33:04):
I think it's important just so they kind know how the process works if you want to give this stuff to them as they get older. And my wife, my is not involved whatsoever in the real estate. She's just kind of like, oh, we're buying another house. Okay, cool. Alright. That means you're going to be gone for a little while working in the house probably. Yeah. Right now I have one of my renters died and I'm having to do the cleanout of the house and the house was a mess. So she's like, oh, does this mean it's going to be a one trip deal to clean out the house or is it going to be a couple trips? And I'm like, it's definitely going to be painting, fixing some of the drywall, some of the doors replacing the stove, cleaning the floors. They put stuff in garbage bags with rotted meat, they rotted meat leaked out into the floor and it's like, this is not glamorous, but I'm also, the quotes, I got to just do the repaint and the clean out was like $5,000 to $10,000. I'm like, if it takes me three days or four days to flip this house, it's worth it for me to do it myself versus hiring it out for five, $10,000.
(34:02):
Agreed, agreed. So Brett, we're halfway through and I know that you just recently decided to rebrand, I guess to lift, and is Baller property still in existence? Are those two separate things?
(34:17):
Yeah, yeah. Baller Properties is still in existence. I can't get rid of it. I mean it's a pretty awesome company name. Right,
(34:24):
I agree.
(34:26):
So Baller properties is still a thing, but we are now focused and operating through Lyft as far as flipping and wholesaling goes. So that's the focus right now.
(34:40):
What prompted the change? A to get a partner and then I'm guessing B for the name change or the additional name. That's why to separate the two things.
(34:52):
So I have found probably this year more so I think, I can't remember exactly, it might've been Andy Rizla. He talks on entrepreneurs and entrepreneurs. So entrepreneurs operate at high levels inside of businesses, but they enjoy more of a supportive role on things. I found just with my, that's more fitting for myself and my personality. I like the team aspect of things I always have looking back like sports and school and stuff, I just operating with somebody as a team, I think you could do more together versus alone. And so earlier this year I tried a partnership for the first time on one single property and it was one of the worst things I've ever done.
(35:54):
So I think mean looking back now, I'm thankful that I went through that because it gave me the ability to know what needs to be kind of in place and laid out. Roles and responsibilities are all written out. And so now that's what we have with our current partnership. So I think I was looking for value on both sides. And so my partner, he's more experienced than I am in real estate. He holds multifamily properties and then flips single family. So he has just under a hundred doors on the multifamily side that he owns himself and then they self-manage those properties as well. Those are all local here. So it was just looking for a value add on both sides. He was going to mentor me at one point and then we kind of built on that and got to talking and at one point I was like, man, could I bring value to you and come work for you in some aspect?
(36:58):
And then we kind of talked on it a little bit and went back and forth and he was like, man, I really don't want you to work for me. Let's partner. That's going to be more beneficial that way. So that's kind of how we have built our partnership. So I'm currently running acquisitions for us, just trying to bring as many deals in and then we're deciding what we're doing with the deals from there. So just trying to be super dynamic and figure out what makes sense for the deal. Do we wholesale it? Do we whole tail it? Do we flip it? Do we hold it?
(37:35):
Greg, I know we explained the wholesaling and I know we done it before, but can we explain whole tailing now?
(37:43):
Yeah, yep. So I would say it's more so on say the property just needs a quick clean out, let's say, or a quick, I don't know, maybe it needs paint, some light renovation. I would call it super quick. So we will actually purchase the property and then we will go in, do the clean out and then we will list it on the market right away.
(38:07):
So basically you're closing on it instead of assigning the contract and it's just doing a light slip. It's still a fixer upper, but it's not a complete gut job.
(38:17):
And I hear people talking and I don't know, in some states, wholesaling is not legal or frowned upon, so some people just take 'em down with the whole tailing method. So it's nice to be able to be flexible to take 'em down if need be. Yeah,
(38:35):
Yeah, just calculate in your closing costs on the front end and backend and the renovation costs, the light renovation costs and the in between, as long as you know those numbers, I mean you can see what your spread is between that. I always use 8% I think in Maryland is 2% transfer and title then a budget, 6% for upfront costs, and I'm sorry, total 8% for upfront costs, realtor closing fees, all that stuff. So when I buy a hundred thousand dollars, I'm actually buying for 108. When I sell for $200,000, I'm actually losing 16,000. So I'm actually selling for one 70 or 180, 180 4. So I mean that 1 0 8 to 180 4, that's the spread or 180 6, whatever it is. That's the spread that I need for all my renovation holding and blah, blah, blah, blah, blah. So when I look at houses, and I'm not even actively doing it right now, really, I always look at what's the spread and you can go on free websites like investor lift.com, where wholesalers we will post their deals and see what's their after repair value. And a lot of times that I have found in the DC metro area and Baltimore is that the wholesalers will inflate the after repair value to make that spread look bigger so it looks more appealing for you to buy it from them to make more money. So Mike, I know you want to chop to say something.
(39:53):
I was going to say I just think that's a trait with all of them everywhere, not just this area. I mean, half the time I look at these numbers, I'm like, dude, and I get it, sometimes construction costs can be a little bit different if you're doing your own work or depending on the finish level and whatnot. But I pretty much don't take anybody's a RV or rehab budget when I look at some because it's usually way high or at least partially inflated a RV and way low or at least some bit of subordination to the rehab. It's just like a part of the game I guess.
(40:29):
I have seen, and I don't know if you guys have seen it or not, I have seen where somebody, a wholesaler say, okay, here's the list of stuff that needs in these carpet paint, trim appliances, bathroom needs to be reglazed, and they have a general price list of what the stuff costs. I thought that was pretty slick the last time. It's been a couple of years since I've seen it, but I was like, well that's kind of a good selling point. You can hand it to somebody and be like, this is why I came up with the numbers. And you can have a spreadsheet and just fill 'em out like this is the things that it needs. Check, check, check, check, check and the generic price. And Jay Scott who used to live in Columbia, he's a big BiggerPockets guy. When I talked to him about the book that he wrote, estimating rehab, the whole premises of the book was this is how much these line items cost. And then somebody just built a spreadsheet off of that book using his numbers and I thought that was pretty ingenious.
(41:22):
I think that's super smart what you said about the 8%. So when we're running numbers on deals, we take off 10% right off, we figure out the rv and then we're subtracting 10% for closing costs when we're purchasing it. And then typically a lot of the times you have say 6% plus those closing costs. So sometimes I think new investors and looking back, I didn't account for that 10% and that's a good chunk of change when you're running your numbers. So I think you definitely want to account for that.
(41:58):
And the bigger the numbers, once you start getting into the five, 600, a million dollars range for buying this houses, your spread needs to be significantly bigger because the percentages are a lot bigger numbers than on a lower acquisition cost. And I see that a lot in dc. I'm not going to come out of pocket to make say 30 or $40,000 on a million dollar purchase. It's too much risk versus reward for me. And I mean this area is very, very pricey, but there's guys who are like, I just want to break even to keep my guys busy, the guys who own construction companies. And I'm like, well, I've never really thought about that. Well, they got to also have to house people. So I know one guy will buy houses for above market value from wholesalers, and then the construction guys that work for him, he houses them and they have to pay him rent. So he's winning by owning, appreciating real estate. He's housing his workers, so they have to keep working for him and then he's paying them and he's getting the money right back in rent. So there's different ways to skin a cap. I've always thought that was a pretty slick one.
(43:03):
Crickets. Nothing. Nothing. No response. I mean, fuck Aaron, that's cool, whatever.
(43:07):
No, you bring up a good point. I thought Brett was going to say something, I didn't say anything. And there it is. There's always different ways to look at everything. And I think it's too, that dictates your extra strategy. What's working at the moment for a while, wholesale was huge, especially during the covid runup. I mean I had never done whole hotel until that period. And then that's all I wanted to do. It's like why do I want to risk all this time and money on rehab where I'm going to make similar profit and not even touching it? I hotel the property this year in Boise. So kind of back to Brett's point, and then Aaron discussed it too, when you're not wholesaling and you own that property, it's like if you buy it right, there's not as much of a rush. There's no impetus I have to do something right now.
(43:55):
I sat on this thing for three months figuring out what I wanted to do with it, and then the market started to heat back up. I realized the property was in better shape than we originally thought. The appraisal came in higher. And I'm like, all this is leading to one thing. I don't want to rehab it. I hate rehabbing them, so let's whole tail it. And I looked at the numbers and I hit my buddy up here. I said, Hey, look at this deal. What would you do? He's like whole tail it all day long. Don't even think about rehabbing that house. And the rehab budget at that point was $60,000. So it's like I'm going to spend an extra 60,000 to make an extra $10,000. That makes no sense to me. So I think as things go on, as time changes, all these things happen, your strategy changes, cost, materials are going to be a big thing, and then
(44:44):
Just these are all different tools for your toolbox, right?
(44:46):
A hundred percent. And I like it now. And especially I love controlling the property because there's so many more options. And I know Mike does this, I don't really do this, but if you control it and you own it and it makes sense for an owner finance deal, I mean that's a whole nother, Tommy does a million of those. There's so many options that I think as you progress, it's like, okay, my business is constantly changing and it sounds like Brett made a good decision with his partner. This guy's got a ton of experience. You're handling acquisitions, so you guys both serve each other and it's not like a one-sided relationship. And Andy does talk a lot about the whole entrepreneur thing and what are you able to do, what are your strengths, and then lean into that. So now that, oh, go ahead Mike.
(45:36):
I didn't know if that was a question, but I was just going to add circle back to that wholesaling thing. Make sure you know what most of your buyer's buying criteria is. Because the one thing I've learned, I passed on a lot of deals that I could have monetized because I looked at it only from my lens and this is how I do a deal and what I want to earn from a deal. And when Aaron just talked about how he allocates a percent for the beginning, the buy side, then the sell side, and then he works backwards from there. That'd be helpful to know as a wholesaler because then I can sit there and say, well, I could tee this up for Aaron because I know it meets his buying criteria versus I know there's people out there that they're only looking for a 10 or 20% discount and they just need a place to park cash a surgeon in DC or something. They don't care about the same return maybe Brett or you or I are looking for. So that's all.
(46:35):
I think it's important too, I think to build relationship with your buyers. I have a buyer here locally that I've sent him deals, he's bought deals from me, but he'll also send me deals too. So it's cool. We built that relationship at some times. He has too many deals that they're working on and so we're supposed to close one today. And he sent me the deal.
(47:02):
It's funny because now because I always put it out there, I want to buy a castle in a lighthouse, everybody sends me lighthouses and castles that are for sale. And a friend of a friend who's a crab man who's a fisherman on the eastern shore, he just posted via on TikTok of one of the lighthouses that was for sale is now Airbnb. So he's staying there. And I was like, this is the first time I've actually seen the inside of this lighthouse that I think I bid $18,000 on. If I get it, I get it. If I don't, I don't. It'd be a story for the rest of my life and I can give it to my son when I die. But yeah, I mean tell people what you want. Put it out there, put it out to the world. And it's kind of like your affirmations, just put it out there and it'll come back to you.
(47:43):
Exactly. And that's what I said in the other show is I stood up in front of my meetup and said, I'm looking to buy a storage facility or a strip mall, and 30 days later somebody's like, Hey, I remember you saying this. Here's a link to one. Ended up buying it. So it's like one of the things that never would've happened, look, I guess it could have, but just it is free. You use social media to create opportunity, not just consume the next algorithm trying to sell you something. But we're coming up on the last couple of minutes, Brett, is there anything you want to transition to talk about that we haven't touched on? Or
(48:24):
Actually Brett, I want to ask you one question before we move on to that. So we're all in pretty big city areas and you're in a very kind of small town of 4,000. Do you see any obstacles? Lemme preface this, there's somebody else in the group as another couple, they're firefighters in Michigan, not too far from you. They're doing their first flip. They just listed it a couple of days ago and there's no comps out there. So I think they listed at three 50. I think they're into it for I know high twos. So the profit margin is going to be, I don't know, 25, 30 $5,000 give or take. But the obstacle they had was finding a realtor listed for what they wanted it for and the comps that they were trying to compare it to were either owed or renovated or square footage is different. Do you see those obstacles for finding comps out by usage? You're a small town investor.
(49:19):
Yeah, so honestly, so we've done a few deals here in our smaller town of 4,000, but we've done more deals in some of the neighboring towns. So the next town over is like 12,000 population and it's just they're transacting more deals. So I haven't really ran into that issue myself, honestly.
(49:42):
Okay. Would you give any advice to anybody who's looking to invest in smaller towns?
(49:51):
I truly think anywhere you go there are deals, right? And I think if you're flipping as long as you have a good product, I think it's okay. Okay. Yeah.
(50:05):
Alright. So what Mike was saying, is there anything we missed you want to kind of go over?
(50:10):
No, I mean I think we hit it.
(50:16):
So if somebody's in Michigan, what can they do for you? Send you some deals. How far out are you buying? Where's your area?
(50:24):
Yeah, so we say we like to be within 30 minutes of South Bend, Indiana. So we're right at the Indiana, Michigan border, like southwest Michigan. So South Bend, 30 minutes around that area. But obviously we could wholesale throughout Indiana and Michigan, but we're kind of hyperfocused I would say on this area since we are flipping and doing stuff in our backyard.
(50:55):
I was looking it up earlier and I think the National RV Museum is by you.
(51:01):
Oh, that's right. Yep.
(51:03):
That's awesome.
(51:04):
Yeah, I didn't even know there was such a thing.
(51:07):
I mean there's a guy in our group that we interviewed before, John, he's a state trooper. He was buying RVs and putting 'em at campsites for people and then renting 'em out on Airbnb. So when I saw that, it made me think of John, my favorite state trooper in Maryland. Don't pull me over if you're listening.
(51:28):
Where should people follow you, Brett?
(51:31):
Yeah, so I'm pretty active on my personal page, just my first and last name and then they can also follow our Lyft business page. So it's Lyft, REI. So either check me out on either one and feel free to reach out or send some deals my way. Even better.
(51:50):
If you were to go back and give yourself advice, it could be 15-year-old Brett, it could be 20-year-old Brett, 25, what advice would you give your younger self?
(52:02):
I think I would say figure out your why and why real estate specifically figure out why do I want to do real estate and then pick a lane and just focus on that lane and don't get caught up in distractions and shiny object syndrome. So just stay focused, put in the work that needs done and kind of see where that takes you.
(52:29):
All right then that's the lead up to the next question is what is your why and what's your focus going to be? The foreseeable future?
(52:37):
Yep. I would say financial freedom. So just the freedom and flexibility of being the one that is in charge and can create my future. It's not in some company's hands, not in a department's hands. It's in my hands that I get to control what our future looks like.
(53:03):
You were the master of your own future. I like hearing that. I mean, I look at everything that happened with the hurricane down in Tennessee and North Carolina and Georgia, all down for the Florida. And it's like these people, everything they had was in these houses and they have nothing to back it up. Just the lifestyle they lived. It was just small mountain towns. And I look at that and I was like, this is the reason why I want to diversify outside of just one house, one place, one job in case something happens. So hats off to you for seeing that transition through.
(53:36):
Thank you. I appreciate you guys. Thank you for what you do. I mean, you guys are a big part of why I'm doing what I'm doing and have helped me learn a lot, so I appreciate you guys.
(53:46):
Awesome man. It's exciting to see somebody take action and starting to enjoy the fruits of those labor. So congratulations man.
(53:55):
Thank you. Absolutely. Good. Congratulations. That's awesome.
(53:58):
Go get 'em brothers.
(54:00):
Alright guys,
(54:02):
See you.