The Everyday Millionaire Show
The Everyday Millionaire Show
The Journey from High Pressure Sales to Private Equity Success: Matt Fullerton (Full Podcast)
Ever wondered how to make the right strategic choices in real estate to maximize your returns? Join us as we uncover the wisdom of seasoned real estate investor Matt Fullerton. He shares his experiences navigating the complexities of wholesaling, flipping, and holding properties. Listen to Matt’s invaluable insights on partnering with experienced renovation crews and the emotional rollercoaster of selling properties too soon versus the long-term rewards of holding onto valuable assets in promising areas.
In a compelling career transformation story, you'll hear about a former car salesman's journey from the high-pressure world of car sales to the more balanced and fulfilling realm of private equity. Tune in for a deep dive into the strategic and emotional aspects of real estate investment, and walk away with actionable insights to fuel your journey toward financial freedom.
Like I was seeing other people, the people who bought the houses from me, flip them and then how much they made, and I was like you made a hundred grand for me, okay, well, I made 30 on the wholesale fees. So I started to think like, look, if I can make a you know a quick 30 grand in two weeks, great, but if I think it's going to take four months to make a hundred, I'm going to do that.
Speaker 2:What was your first step in finding good contractors, or any contractors?
Speaker 1:Actually my favorite crew now is I partnered on flips with people like can you help me flip this property? We'll split it. You know 50-50. I've already got everything done. I said, sure, yeah, if you have 100k a month coming in without picking up your finger, then you should be able to do whatever you want.
Speaker 3:Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Kalkas. Hi guys, welcome back to another episode of the Everyday Millionaire Show. We're here with Matt Fullerton today. How you doing, Matt?
Speaker 1:I'm doing great guys. How about you?
Speaker 3:Oh, we're good we're good, today was a day.
Speaker 2:It was A lot of running, a lot of swimming For these guys.
Speaker 3:We biked 18 miles and ran two miles right after Did a little brick workout. Yeah, that was something that almost got, almost killed me this morning, so I'm glad we're all here. Um, matt and I just recently met because we bought a property from you yep, a property that we spoke about on the podcast with brooke kane and now it's resurfacing. I basically put it out there like should I sell it or should I keep it?
Speaker 2:yeah, yeah and I had like, so we came to the conclusion. R Ryan did not take my advice and he is keeping it, keeping it yes, and that was my advice.
Speaker 1:Yeah, I called a couple of people for advice.
Speaker 3:Yeah, the guy who sold me the houses and owns the ones next door and then yours, and I said hmm, not Nick, Nick's not the one today.
Speaker 1:Sorry, Nick.
Speaker 3:It's probably next time. Not everyone makes the best choices. What did brooke say?
Speaker 1:to do, sell it. I think he said to sell it too, did he? But yeah, I was like you know what I'm surprised. Brooke would say that man, because we, every time I, every time I talk to brooke, he's like keep, keep, keep, keep.
Speaker 3:If I, didn't live here, I probably would sell and grab the money. But like I literally drive past, like we ran a half marathon the other day, literally ran past the house, saw my guys working bounced across the street, said hi to my guys. I literally pass that house every day. If I sold it and then, I don't know, 10 years from now they're worth $2 million, you're going to hate your life.
Speaker 2:I'm going to hate myself. I've never heard anyone regret holding on to it. They always regret selling.
Speaker 1:Dude, I regret selling. So, dude, I regret selling so many. There's so many houses. I look back on them yeah, that's true.
Speaker 3:A couple of the ones that we sold when I was like thought we were at the top of the market in like 2018, 2019 and then in 2020. I was like so matt quickly.
Speaker 2:Now we're on that topic. I guess we're starting off with that. When you bought yours, was that the whole game plan from the beginning was.
Speaker 1:I'm gonna hold on to this thing, yeah when, yeah, when I bought them at first, you know my initial thought was I'll keep all four and I was like, well, you know, I don't really. Just I have a ton of projects going on and I just didn't have the bandwidth to to renovate like, like you're able to on those right now, especially because it's an hour from where I live, so it's a little far. But the other two that I bought were already renov just recently and they're in great shape and it was such a good deal. I was like, man, I can't, I can't sell these. Did you already rent them? Yeah, they were.
Speaker 1:They already had tenants in place you know, at decent market rents and it looks like we've talked about we can raise the rent next year. But they already had tenants in place paying on time. No issues that you know. They're three grand a pop yeah, and they're just like.
Speaker 3:It's just such an a-class like community where, like everybody wants to go to that school. That's like less than a mile away. So it just makes sense and we're actually doing the first time ever, renovating the house, doing the whole burr project, the whole process with the tenants in place. So the tenants are staying. We actually moved them out for two weeks. I gave them like a month off.
Speaker 3:I gave them each a month off and we're staggering their move out yeah and we just moved them out for two weeks and moving them right back in and they're going to be happy too. They're going to move into a new house, brand new house, right and then we're going to raise the rents and they both we haven't said the exact number yet, but they both want to stay. It seems like.
Speaker 2:So we'll see what happens.
Speaker 3:Are they side by side?
Speaker 1:they're like two, if you imagine, like a split foyer kind of like a connected okay like a thousand square foot split foyer yeah, touching another one, yeah, that's basically what it is. I've actually never seen duplexes quite like them, but it's.
Speaker 3:it's a cool property and there's like no other rentals available and I had chase partnered up with us and I was just like we went back and forth between buying and selling, keeping and selling like a dozen times and I was just like, no, we got to, we just got to keep it. Yeah, the problem is and I guess we could talk about this as the next thing is like when we're doing our numbers right, like cashflow right now is hard. So we're looking at it like sure, we're going to have this let's just call it ARV of 900 grand at the end and we refinance it and we pull out $700,000, let's just call it. Our mortgage is very close to what the rent's going to be. So it's like you're kind of holding onto this asset and you get, you get money back and you hold onto the asset but the cashflow is not really there. Are you just? Are you kind of hanging on, like we are, until, hopefully, the rates drop?
Speaker 1:Yeah, I think. I think cashflow is just part of the equation. Now, don't get me wrong. I want cash flow in my rental properties, but in a place like that, where there's, I mean, appreciation, seems kind of limitless there in Saverna Park. So you're going to get appreciation and already where we own these houses at, I mean we've got tons of equity in them. No-transcript rates go to five. We refi them you know we're golden, you know. So five, six, you know we're golden if that happens.
Speaker 3:So I's a big if. But even if not down the line, they're just going to appreciate so much.
Speaker 1:I think that you're going to be able to refi them, even if rates stay the same, and be in great shape.
Speaker 3:Yeah, that's true, and we're already below market rent. I know I feel like how high can the rent go? Right In my head I'm like how many people are renting four $5,000 houses? I guess more than you think. Right, yeah, I houses, I guess more than than you think, right, Like five.
Speaker 1:Yeah, I mean, I guess there's people paying, you know, five grand a month for rentals, you know all over the place, cause they kind of have to now.
Speaker 3:Yeah.
Speaker 1:I don't think it can. I really don't think it can stick and just keep going up. I think you're even seeing it in the market now, um, where the higher end price points are starting to get. It's starting to get a little softer in the market they're starting to get it's starting to get a little softer in the market. The bread and butter houses they're moving like crazy, but the higher stuff that's sitting there a little bit longer.
Speaker 3:Yeah, I think like right now, the after renovation value in that like five to 600,000 range is like where the heat is. It seems like cause we're trying to sell one right now and like that $700,000 range that I flipped and I can't get rid of it. But the two that we sold in like that five 600 range, they went like the one we literally listed and sold closed in 22 days of listing.
Speaker 1:Yeah, we um. So at our, our, my market's a little bit less little, not quite as high as yours. So where our market it's like the four to 500 range, is where the, where the people are. You know you're getting all the offers, you're getting all the people in the door, everyone's bidding on it, but once you get above six it sits a little while. We have one student flip that we priced at $375. I mean we must have had. I mean there was a line out the door for showings. We had tons of offers on it, just like that. We have another one. That's, I mean, a much nicer, bigger house. I mean the renovation is much nicer too, but $650. And it's been sitting for two weeks. Tons of showings, but people are, you know, they're nitpicking it.
Speaker 1:So, I think that's just kind of what we're seeing in the market right now.
Speaker 2:So, Matt, can you tell us a little bit about?
Speaker 1:about your background and how you got to where you are now. Yeah, sure, I um. So I am a high school graduate and I don't have a minute of college or anything like that under my belt. Um, I, out of out of high school, I got my girlfriend at the time pregnant and, you know, had a kid shortly thereafter and I, um it was like, okay, man, like I gotta, I gotta work, I gotta get a job. I don't know what I'm good at, you know I kind of. You know, in high school I was a C student. I just messed around, you know, played sports and didn't really take anything too seriously, and, you know, things got serious for me fast. So I um, actually got a job as a car salesman. This was back in 2004.
Speaker 1:Got a job as a car salesman you know, local dealership by me, and it turned out I was just kind of naturally good at it and I was in the car business for a long time 10 years. I left as a general sales manager of a big Toyota dealership. It just burns you out, though. I mean, it's seven days a week oftentimes, you know tons of hours, you know crazy. Oftentimes, you know tons of hours, you know crazy, you get fired for pretty much anything and in one bad month you get fired and have to move somewhere that's the ultimate sales grind it is the car sales.
Speaker 1:It was. I'm thankful for it now because it taught me to be really, really good at sales, Right, you know for, and I've used that ever since, but at the same time, I would never get back into that industry.
Speaker 2:At the time, did you ever think of starting your own uh car dealership?
Speaker 1:no man it. So to start your own dealership unless you start like a little mom and pop when you still need a dealer's license and everything like that, but to actually get like a franchise, like a toyota ford, something like that, you're gonna have millions of dollars and I I mean I was living paycheck to paycheck then, man I had kids.
Speaker 1:I, it was just me. I was a sole income earner in the house then and I was just trying to stay alive, trying to stay afloat, like none of that even I mean it was just for me then. It was just getting to the next month and eating, and early on I mean I was, you know, 18, 19, 20 doing this. I mean there was. There was plenty of days where I just didn't need a thing, where I, I mean, I was broke half the time. There was a ton of that. So I had to grind for a long time, finally left the car business.
Speaker 1:I quit on a Saturday, busiest day of the week. I, just on the way to work, I just couldn't shake the feeling that I just had to quit. And I walked in the general manager's office and told him. I said hey, man, I'm going to, I'm going to quit. He was like what the fuck man? What do you mean? Like we're at the Saturday. I was like, look, he wouldn't even let me I home and bring it back. So I had to call my dad to come pick me up from work, just like I was in high school. And I was like I quit. He's like what are you going to do and I said I don't know, but I lucked into a job. A friend of mine worked for a private equity company.
Speaker 1:You guys know, like JG Wentworth, so there was another company that was kind of a higher end of that called Stone up in Bethesda and what they did was you travel around the country buying people's you know lottery annuities, structured settlement annuities, corporate you know golden parachutes, even sports contracts, things like that. You know anything annuitized. So I did that for like three years and was great at it, had a blast. That's the only job I think I would ever go back to and I would only go back in that incarnation. But regulations really cramped down on that industry and then they sold to JG Wentworth and I ended up During that time I actually had a job offer from Express Homebuyers in Northern Virginia. So they said, hey, we need acquisitions guys. You know, I know you're a manager and everything we have been. But we don't need that, we just need a sales guy. I was like that's great.
Speaker 3:We had Brad Chandler on the podcast.
Speaker 1:Oh, did you have Brad on the podcast?
Speaker 3:Yeah, yeah yeah, Yep, that's funny. So were you making good money at that other company doing it sounds like sales as well.
Speaker 1:Yeah it was sales. Yeah, this was even more. I would say this is even harder sales Like it was. And going to every tiny, every little bumfuck town you can think of, in everywhere, like I've been to towns with populations of like 30 people, um, and buying these annuities and you know it's. It was great, you learn a lot. Um, I had a lot of fun, it was a lot of travel, but you know, all these things kind of kept me from seeing my kids grow up too and I started to really hate that. So when express offered me a job, I was like look, there's unlimited vacation, there's all this you can do. You're just a sales guy, you don't have to worry about managing people. Less hours. I was like great.
Speaker 2:So so that that job that you mentioned to annuities, you would go to different places where people would you mentioned hit the lottery? Buy out, whatever their winnings were if they were spread out over time. You just give them like an offer.
Speaker 1:Absolutely so what would happen was people would win the lottery and that information's public ends up being, even if they say, hey, we don't want to disclose it Some States don't make them disclose their name or anything, but a lot of it's public information if it's below like 10 million. So we had a whole research department that would find these people, you know, as soon as they want. We'd be on a plane out there because a lot of states didn't give you an option for a lump sum. You had to take the annuity. So if you want a million dollars, they give you 50 grand a year for 20 years, right, and then you would go out. And then you know, at the end of the at the end of the day, after taxes, everything like that they'd be getting like 20, 30 grand. So we'd come out and we'd make money. We'd make a bunch of money on that.
Speaker 1:We did one in Seattle where the people want $112 million, though, like we bought that annuity, we put them on a and there was a. There was a heavily competed industry too. So we put them on a princess cruise a lot 10 day princess cruise. That same day gave them burner phones and everything Burner phones took, got them on the cruise. Once that cruise left the port, we were freaking out because we knew no one else could get a hold of them. And the deal was done, because all these deals had a three-day right of rescission. But aren't there.
Speaker 2:I guess. Correct me if I'm wrong. Aren't there two options? Isn't there like a one lump sum option for them to choose?
Speaker 3:Not all states have that option.
Speaker 1:Yeah, so some states, so a lot of states, didn't have that option at all. It was all annuity and some states gave you the option. But then people would take the annuity and then you know, a year later they want to buy a house, they want to buy your car, they want to buy something, they want to take out a hundred grand. So they call it, they call you. It wasn't just a whole annuity, it could be parts.
Speaker 3:It tended to be 5 million and up, but we did play in $1 million ones too. That's a crazy business, yeah, yeah so we just interviewed this guy tras. Have you heard of that? Tras so tax receivable agreements, I think, is what it stands for.
Speaker 1:It's uh I guess it'll come out in a couple weeks or whatever.
Speaker 3:but basically it goes to like fortune 500 companies and, like he did one with like smash burger or one of those like big you know burger chains or whatever where he would buy, um, like, if they had a tax refund or something coming in, he would basically buy that yeah.
Speaker 1:Give money up front for a discount.
Speaker 3:Give money up front at $0.60 on the dollar. He has investors that like pool money, just like syndications in real estate.
Speaker 1:Exactly, that's exactly what we did.
Speaker 3:And they buy these things for $0.60 on the dollar and they get them over time and that's his whole business tax receivable agreements. It was pretty interesting.
Speaker 1:We would just pull all these. We'd get all these contracts and pull them all and sell them to hedge funds you have people who sit on these things. So we just pull all the agreements and then you sell them off as a, as like a.
Speaker 2:What are some other examples besides the lottery?
Speaker 1:Uh, structured settlements people who get a settlement for sports contracts. There's a couple like guys, um, corporate guys who had big, you know structured settlements as their retirement that they wanted to cash out. So we could do it with any of that stuff. We did a lot of that.
Speaker 2:It's interesting.
Speaker 3:So you're working for express home buyers doing sales. What kind of broke you off and started doing it?
Speaker 1:Well, I, I. So I started express home buyers and when I got to express home buyers, they were a flipping company. They were not. There was no wholesale, none of that stuff. They owned a bunch of rentals that they had bought during the uh, during the recession yeah and they were a flipping company.
Speaker 1:But they had dozens of flips going on and they had signed up with a new contractor and the new contractor, just you know, stuck it to them, I guess, and way over promised and they were bleeding. The company was, like you know, company got very, very close to going under, like you know, just a couple months in the job I thought I might not have a job anymore.
Speaker 3:Yeah, I remember he told us a story on the podcast. They lost like nine million dollars or something like that.
Speaker 1:Yeah, they, yeah, I mean it was, I mean it was, yeah, I mean so all these houses, you know they're under construction and the contractor's not meeting demands and they're going, they're suing them, they're going to court and everything. It's a mess. So I uh it wasn't actually Brad at the time, um, brad wasn't really a day-to-day guy. Um, tom, this guy, tom Parmentier, he was the, he was the, you know, the CFO or C COO, and I said, why don't we just sell all these? You know they're half done. Why don't we just sell them all? Just get as much money back as we can? So we gave it a shot and I, we ended up.
Speaker 1:You know, essentially it wasn't wholesale because we owned them all, but we sold them all just real quick to other investors, and I mean salvage the balance sheets, everything, save the company. And then you're like, hey, why don't we just keep doing this with everything? Why don't we wholesale everything now? So you know, at first it was, at first it was like, you know, this was 2015, 2016. So it was, there wasn't as many people, no-transcript deals, got super competed. And then, in the midst of that, of course, you know, I got promoted. You know I didn't want. I got promoted a couple of times and I was a VP when I left.
Speaker 1:Um, it just and it just. They wanted to expand nationally and I did not and I still do not think that nationwide wholesaling can work as a. I just don't, I just don't believe in it, never didn't back that. And so we were opening all these other markets and they wanted to do all this wholesale there and I ended up doing deals in Florida. I did a couple in Washington, a couple in Alabama, the Carolinas.
Speaker 1:You know I did some, but it was tough. You know you don't it's much. You, I did some, but it was tough. You know you don't it's much. You don't know the markets, I didn't know my ARVs. We had to release a bunch of deals, it just. You know, none of the no one knew exactly how to evaluate these houses. It just wasn't working. And I told Brad you know that we were going to bleed like this and Brad and I had a lot of contentious, contentious discussions and you know, over the course of a few years or a couple of years, and finally it got to a point where I just was like I gotta.
Speaker 3:I can do this on my own. I don't need these guys, right. So that's interesting. Take on like nationwide wholesaling, for one. So there's a couple of companies that do like market pros and a couple of people that do it. Um, what do you think is like the biggest holdup? Is it just? Is it just the local knowledge? Like, do you just need to build down a local team at each place? Is it just the local knowledge, like, do you just need to build down a local team at each place?
Speaker 1:I think it's everything, man. So look, if you're going to wholesale nationwide, you got to have a team. And you got to have a team in each market, or at least one guy or two. So there's overhead, there's locations, there's software. There's all this overhead you have to have for each market. So before you're even doing a deal, you're spending tens of thousands, if not hundreds of thousands, of dollars on ads, salaries, everything like that in that market and then you're trying to do that in I don't know 20, 30, 40 markets all over the country. Like it just doesn't work. It doesn't scale. At that level the overhead becomes too much.
Speaker 1:It's what happened to Express. Overhead was 500 grand a month, you know on. You know on salaries, on ads, and it just we couldn't catch up to it. So we were just all constantly chasing this drag. And I've seen other people. I know a guy named Josh Cohen tried to do it, market pros tried to do it. I mean they might do deals in a couple other states, but if you look at them you see that they have scaled way back to like just a couple markets. It's just not. You have to have all the software for every market. There's different MLS is. You know, south Florida has its own MLS, north Florida, all these places have different MLSs, so it's it's just way too convoluted, it's way too much.
Speaker 1:It just doesn't work.
Speaker 3:Yeah, I also think that I kind of have the same idea when it's like there's riches and niches kind of thing, like if you have a good market, you could just exploit that market as much as possible, but then you are capped at what you can do, because Baltimore can only sell so many houses to so many people.
Speaker 1:So now, where are you mostly investing? Now, I am no-transcript. Every time I think I have a good deal there, I get burned. So I just kind of stay away from Baltimore City and then all of DC.
Speaker 3:You stay away from DC.
Speaker 1:No, I know, I buy in DC, just not Baltimore City. Okay.
Speaker 2:So, after you left Express, what was your original game plan and what did you start with?
Speaker 1:My original game plan was to just start out my own wholesaling outfit. I was just like, hey, I'm just going to wholesale at first and you'll see how things go, because I can generate a bunch of money. That I knew it would work and I could generate a bunch of money that way. I knew what to do. The problem was, you know, I didn't didn't have any money. You know I had a W2 job at Express and you know it was a good paying job. I mean I made six figures at all these jobs. But I mean, you know, a hundred grand a year doesn't get you shit anymore.
Speaker 1:Yeah so or even you know, 150 grand, 200 grand might not get you anything. So I don't have any money, right, I can't pay for ad spec, I can't pay for PPC ads, they cost too much. So first thing I did was think like, who has deals, who knows about distressed real estate Realtors? Do right. So I started going to like sales meetings at realty offices, like first thing, and being like hey guys, if you've come in one of these houses, it's nasty, you don't want to walk in it. You don't like it? Call me, I'll come, I'll make you a cash offer. You have to worry about listing it. None of that stuff. That worked out well to start. Um, another thing I did was reach out to like market pro and a bunch of the other wholesaling companies. I couldn't reach out to express and I left. But, um, but we don't have to get into any of that. Um, we, uh, well, I'm happy to, but we don't have to. Um, market pro.
Speaker 1:I reached out to these guys and said, hey, listen, you guys. I know what you guys spent on on leads and I know how leads work in these companies. Right, they come in, it's a shiny new object. Your salespeople call them one time. You know thousands of leads sitting there from the last six months that have been touched two or three times and you're not monetizing anything Like. Well, yeah, that's true. I said, look, let's do this, send me those leads, right? If I close, if I convert them, I'll give you. I'll give you 30%, we'll split at 70, 30. I'll give you 30%. If I convert them, you don't have to do anything. It's found money to you and if I don't do anything with them, you don't lose anything right.
Speaker 1:You know, because you didn't have any money in the begin with. So like, okay, sure, let's do it. And I just cranked through those I made. I had a rule of 250 calls a day. Early on I dropped to a hundred because two 50 made tons of deals. That way I started getting referrals from agents and I started making those deals and it just kind of snowballed from there. I just kept it going.
Speaker 2:So who did you have to talk to at MarketPro to get that connection for them to allow you to send the leads? I talked to Dan, so you already knew people there.
Speaker 1:Yeah just from working at Express. I knew the guys at the other companies and stuff like that. I knew some of the other players in the market already. That was good. I kind of had a crash course at Express, so it helped me.
Speaker 2:I knew some of the players in the markets.
Speaker 1:I knew how to evaluate the properties and everything. I knew what to do, so that helped me know who to reach out to to try to do this.
Speaker 3:If.
Speaker 1:I didn't know someone. I just figured it out on the website.
Speaker 3:So did you follow when you did this? Did you follow a script or did you just kind of free ball it Like? I'll figure this out as we go.
Speaker 1:Yeah, I, um, so I, I, I didn't really have a script at that time. I had kind of like my own call cadence, which I actually developed into a script that I used, as I've been using consulting a few times. Now a couple of big companies on the West Coast have actually designed their sales programs and stuff with that script. But back then when I first started, it wasn't really a script yet, it was just kind of like what I always did.
Speaker 2:Let's hear it the script, oh shit man, I don't even think I have it, I don't even use it anymore.
Speaker 1:That's the thing. I don't make very many calls to sellers anymore at all.
Speaker 3:Most of my business is all referral now. So what did you ever put callers in place that you had to train to do that script, or did you always just you went from doing it yourself to like to where you are now like referrals seeing that overhead market, that overhead at express, and seeing like how to chasing that that tail all the time and how much money it's been, I was like I'm not doing that ever again, not hiring anyone.
Speaker 1:And the other thing is the other thing I learned about myself, um and over the course of this, you know, being a manager and being in place, I'm not. I'm. I'm not a good boss and I'm not a good employee, right, like as a boss, I tend to be more than Napoleon type, like hey, do it or you're fucking fired. And as an employee, I'm like no, I'm going to do whatever I want because I'm the top performer here.
Speaker 2:And if you let me go.
Speaker 1:I know that I'm not. My strength is not being in a hierarchical organization. I work better in partnerships and on like teams. So I you know my wife works with me. She's great, she's, she does, she does a lot of the background stuff and she, I mean, does a lot of the design, the rental management, all that stuff takes all that stuff off my plate. So I can be more big picture, but I've never hired anyone.
Speaker 3:Nice, that's a yeah. Overhead from somebody that has a lot of employees is definitely something yeah, definitely different. I feel like in a construction company. That's where most of our employees are, because it's kind of direct work.
Speaker 1:We're getting to work. You know you have to have the people.
Speaker 3:Yeah, but yeah with the wholesaling and stuff like that, because Chase and I have recently dumped some money into just like trying to get more leads because, you know, did the cold callers the data, this and it adds up it's like thousands and thousands of dollars a month and you're like shit. We didn't even get a deal yet. We spent like 10, 15k when we were complaining before about giving somebody an assignment fee of 10 15k. It's like we could have just paid somebody an assignment fee and been done with it.
Speaker 1:yeah, so, matt, I know you did, uh, flips also. So what was your transition like from wholesaling to flipping? And I was like you know people would be like, hey, look, look at the house. Hey, this is the house I bought from you. Look how good we did. Yeah, like you made a hundred grand, fuck me. Okay, well, I made 30 on the wholesale fee. So I was like, okay. So I started to think like, look, if I don't think, is this like a home run that I can't walk away from? And I got to flip it. That's how. That's how I started flipping.
Speaker 3:Yeah, I was recently telling somebody on our team that is kind of doing a lot of like the disposition stuff for us. I was just like it's like at least four to one. Like if you're going to make four X, talk about flipping it, but if you're like if it's 10 grand in the bag, or 40 grand maybe on the flip.
Speaker 1:Take the 10 grand all day long, like just take the 10 grand, it's a couple of weeks out. 10 grand a couple of weeks out. I mean there's time, value, of money, like that's what a lot of people don't consider in this business is how much their time is worth. So, like, take what you make in a year and you know, divide that down to the minute and how much you're getting back Exactly.
Speaker 3:And a flip. If you're doing hard money, you got to have some sort of deposit. You're paying points, you're paying this. There's a risk involved. What if the place doesn't sell? Right now, I'm sitting on a house that costs me 6,300 bucks a month in interest. Yeah, so like, had I, you know, had the opportunity to wholesale, keep the money moving. You just go. Yeah, I agree. So how many rentals do you have right now?
Speaker 1:We have Vacation rentals too, including vacation 16 right now, including vacation. Yeah.
Speaker 3:The vacation rentals are you managing that yourself?
Speaker 1:So kind of. So that's more. My wife again kind of handles that stuff. But we have a vacation rental company that does a lot of it, you know does the bookings and everything like that, and we just have to, you know, kind of manage through them. So it's, it's basically it's called evolve.
Speaker 3:Um they're.
Speaker 1:They're one of the vacation rental companies, so they handle the bookings that people book through their site or through Airbnb or through VRBO or booking or whatever. Um, they handle all the payouts, everything like that. We just have to respond. If there's an issue, we have to set up our own cleaners, which is not a problem. Make sure everything's stocked, but for the most part, the actual transactional part is managed.
Speaker 2:How did you decide on that company versus Airbnb or?
Speaker 1:Vrbo. They run everything through Airbnb and Vrbo and they were a little more comprehensive in their management. They did a little more. I want to be a sales officer like the platform.
Speaker 3:Yeah, okay, so it's like a management company.
Speaker 1:Yeah, this is a management that they list it then for you on the main, on the play, and they list it on their own site too, so you can go to evolvecom and book one of these. But I don't think a lot of people book through evolve.
Speaker 3:They book through, you know, booking vrbo, airbnb yeah, we have one vacation rental in florida and I had one here in maryland for a little while, and it was just like so much work and I managed that one myself and this one I don't manage myself. The florida one I was like it's just so much more work and when you think about it, the amount of work that it takes like for for me in my head I was like I could just get two long-term rentals.
Speaker 3:Do like still less work yeah and have you know, maybe a little less cash flow, but it's like there's nobody calling you about. I remember I got a call like 10 o'clock at night once. It was like the guy said there's no remote to the tv. I'm like there is, I bet you it fell on the couch and like he was like no. I checked in the couch and definitely get those.
Speaker 1:Can you keep looking, sir? Can you check again?
Speaker 3:and then he's like no, I really would like to watch tv, you know, given that like pushy and I'm like god damn. So I went there and right where I said it was, it was like stuck in the couch I was like here it is. Here's the thing. It's like 10 o'clock at night and I'm like I have to go there because if I get a three-star review, it hurts my algorithm's gonna be messed up yeah oh god, yeah we've been real.
Speaker 1:we've been real lucky with ours. There are two houses that were total junk and we renovated them really nicely. One's right on the water, right on the bay. That's a great house. It's just a small little cottage that we totally renovated. Another one's actually up the street, not on the bay about a block off, but in a really good neighborhood, and they both just crush it like spring through fall.
Speaker 3:That's at.
Speaker 2:Chesapeake Beach. Yeah, like spring through fall, that's at Chesapeake beach.
Speaker 1:Yeah, they're both in North. They're both in North beach on the Anne Arundel side actually. North beach and they, um, they both just, I mean they just kill it. And then we use, and we use the one on the water for like everything we do, for like my son's graduation, my wife's baby shower. It's a nice little place. We go there and stay there to worry about, you know, the mortgage or anything like that. They pay for themselves and more.
Speaker 1:Yeah, and then we get to use them too. I'm actually going, I'm taking my son down to college in Miami on the 11th and that day we're going to look at, we're going to go. I intend to put a contract on a condo in Doral, you know, just west of. Miami yeah.
Speaker 3:Are you going to do that for you or for him?
Speaker 1:That's not for him, it's going to be for us when we come down to visit and stuff. And then also like so these, these condos there come fully furnished. So I was like, wait a minute, why are these condos? They're like it's, it's 2,500 square foot condo, four bedrooms, five baths, it's two, 50. Like what?
Speaker 2:am I missing?
Speaker 1:yeah, I was like okay, okay, that makes sense right, but then I look at, I look at, um, they're like they're listing stuff and they're like, oh yeah, this one is professionally managed in-house, so they have their, they're all vacate. A lot of them are vacation rentals, or a lot of the owned ones become vacation rentals.
Speaker 1:A lot of them are just, you know, like basically high-end hotel rooms right and then the people who own them some people vacation, rent them and the one that we're looking at or the couple we're looking at. One did 290 last year and I was like I was like is that right? I called my agent. I was like, is that right? Like why would they sell it like? He's like I don't know, but there's another one that does 190. It's down the hall too. I was like, I mean even even at that. Like I mean even the mortgage is seven grand a month.
Speaker 1:I mean that's right, I was like something's not adding up here, man, and he's been looking into it. He's like I can't find what's in one of them. The owner's willing to hold a note oh wow, yeah. So I was like I was like I want, that's the one I want. I was like I want to go look at it when we get down there yeah, send me the other one and we'll see if we get neighbors yeah, we'll take a look.
Speaker 1:Yeah, so I'm gonna go down there and and that'll be a great place. It's, you know, it's. It's, uh, 10 miles from the university of miami, where he's going, and it's five miles from miami international yeah that, those.
Speaker 3:That's what. The one thing that I don't like about condos is those condo fees like they don't. They could just keep going up and up and up and up yeah, they bludgeon you you're kind of like stuck, and if you try to sell it later on and the condo fees have raised by 2x, but the value hasn't raised by 2x, then you're kind of in a you know, shitty situation hopefully.
Speaker 1:Yeah, my hope is that we can just keep vacation running it out and if, if we have to sell, you know, we'll figure that out. But as for you know, for my part, you know, like two rounds of golf a week on that course are included. The pool, big, big pool restaurant all that stuff. I mean there's a lot of amenities for it over there. We were looking into it. I was like golf two rounds a week.
Speaker 3:I mean hell, yeah, yeah, yeah, it sounds like it's a great course. So we're expensive rounds of golf there. I'm sure there, I'm sure the greens view is like two, 50 a pop playing there. But, um, so the coaching thing that you you're doing, how did you like start that and structure that? Did you just like post on Facebook Like, hey, I'm taking on students, like what was kind of your thought behind that?
Speaker 1:So I get constantly asked like I'm sure you guys do too Like hey, can I shadow?
Speaker 2:you. Hey, can I come work for you for?
Speaker 1:free. Hey, can you teach me this? Or I get people just outright asking me for advice or help, doing so like without, without providing any value at all, like all the time that's been happening for years. So I was like, man, I'm just constantly shooting people down at this point I don't have time Like, how can I do something about this? I have all these people who want to learn to flip, you know, but I don't want to just train competitors for free.
Speaker 1:So what do I do? And then actually, um, I'm sure you guys know Brenton Hess yeah, he did this same similar thing a few years ago and he had told me about it. We were in the same mastermind together when he was doing it and I was like I remember Brenton did a coaching program like this. I called him and asked him about like some of the details and he gave me, you know, high level. Yeah, he said he had one point, he had like 30 students and it was like more than a full-time job and we have five. So he was doing it, you know, way up here. But, um, he said, yeah, you know, yeah, it was here's what, here's what I 500 a month to stay in. And the first three projects are joint JV 50, 50, like the form of joint LLC get the loan together, fund construction together, everything like everything's 50, 50.
Speaker 2:Who's responsible for finding the deals?
Speaker 1:They are responsible for any deal. Now, if I find a deal that's going to be good, that will work for them, I'll sell it to them, but I'm still it's going to be my wholesale fee, is going to be in there. You teach them how to find deals yeah, absolutely yeah. So I teach them where to look, and a lot of them tend to be real estate agents. So I was like, look, you guys are going to come across these houses yourself. And here's what you do. You reach out to other people.
Speaker 1:One of our students who's starting her second flip she found this house all by herself had a friend who offhandedly mentioned her mom had a house to sell and she's like she didn't know what to do because the house wasn't in great shape. And my student told her hey, we'll pay you five grand if you refer it to us and we buy it. And so she took my referral fee and ran with it and it turned out. I mean, turned out. The deal ended up being a great deal, like. I mean, arv is like 550. We got it for like 240. I think we're going to put like we got to put a septic in. So that's going to. It's a bat system. It's in critical area, so that's like 40 grand but.
Speaker 1:I mean. So all in, we're going to be in like 120, I think.
Speaker 2:So did you say that you create an LLC with the students?
Speaker 1:Yeah, we do, we create, so that way everyone's married. So I didn't want them to feel like, hey, we can, just, you know, pull the wool out from under them, or vice versa. You know we can, so we so you're a partner on the flip with them. Yeah, we're true partners on the flip with them.
Speaker 3:It's an interesting way to do it.
Speaker 1:We do make it so that, like pricing things, they can only spend a grand, without running it through us, on you know, up to a grand on materials, whatever, without running it by us. That way no one goes out and you know you don't manage the contractors.
Speaker 1:there You're teaching them to manage the contractors essentially. So I'd start. So, on the first flip, it starts out with me mostly managing the contractors and they come along with me and learn how to do it. On the second flip, one student's on her second flip now, and there I haven't even been there, except for when we initially looked at it I haven't even been there. It's been. My wife kind of handles the design and the management with them and they do. We let them have a lot more rope, you do a lot more themselves. So the idea is to you know, eventually be able to be like hey, you're free, little bird go fly away from the nest so it's been going.
Speaker 3:I mean it's been going well and do they pay you just in the equity in that flip or do they have to pay you a fee to do the coaching thing first?
Speaker 1:Yeah, they pay the five grand to start. They pay the five grand up front and then it's 500 a month. You know you can quit at any time, no penalty. You can say, hey, I don't want to do this, I don't like this anymore. Hey, there's no contract or anything like that?
Speaker 2:How many Um construction crews do you typically work with, or is it just one, two to three?
Speaker 1:Usually it's usually about usually two. I have two sets of guys who I really like that I've been with for a long time and I make sure I keep them very, very busy. So they don't. They don't leave me, Cause you know how it is, man, when you lose a good contractor, you're in, you're in dire straits there for a little while.
Speaker 3:Yeah, I mean the contractor seems like the biggest part to any flip, because I go to a lot of jobs that I for estimates and people are like, oh, my budget's X amount and I'm like you are way off. We can get your bathroom for that yeah like you're just way off and I feel for some of these people, because they buy the house based on you know what the wholesaler told them it was going to cost or whatever.
Speaker 3:Yeah based on you know what the wholesaler told them it was going to cost, or whatever. Yeah and um. So what? Like I just had one from a whole, um, from a hard money company, a local hard money company that referred me and I called them and I was like, hey, look man, like this girl is way in over her head, like she has she has a 90 000 budget that you guys approved and like my estimate was 170 and like she's like it's like a city property like the.
Speaker 3:The foundation is messed up, it needs to be waterproof, like there's just so much stuff. And she was like, oh no, I just want to change the cabinets and blah blah and I'm like this is like you are going to be in big trouble and they, I mean they're gonna let the lender say did they say anything about it? No, we could talk off offline about that specifically.
Speaker 3:I don't want to hurt anybody's feelings, but, um, you know that that person is going to lose a lot of money. And that's why, when I talk to people and they're like, well, how are these people buying all these deals and stuff, I was like, well, not everybody's making money.
Speaker 1:People are losing a shit ton of money and not and that's a good point too, because that's another. Another way that I started thinking about this coaching program is I get flippers all the time call me to bail them out, call me like hey, man, I have this project I'm weighing over my head, will you buy it and I'll come out? And a lot of times I go out there and look at it and they're already in way too deep.
Speaker 3:I'm like man these numbers don't work like you're like, how much?
Speaker 1:like you want to sell it for what? Like you're in it for what? Oh, with my construction, everything like that, I'm in it for this. I'm like are you willing to eat the construction you spent, because that's the only way this deal works.
Speaker 3:Yeah, and then when people get into it and they finished the project and then they didn't pull permits or something like that and then they got to redo. I got one from Diana today, a lead that the guy I guess did a whole project didn't pull permits, then Then the ceiling collapsed and they like had like a like a law, like she's in a lawsuit with, like I guess, whoever flipped the house or whoever did it, and now they have to go back and redo, basically rebuild the entire house, cause you got to tear down everything. Show the inspectors all this stuff.
Speaker 1:Here's the stuff for the permits. Here's where all the stuff.
Speaker 2:Yeah, so Matt when you transitioned from wholesaling to flipping and this is just to help the audience what was your first step in finding good contractors, or any contractors to work with at that point?
Speaker 1:I asked other flippers who I respected and then I knew that people would hold shit close to the vest. So I knew I was like, all right, look, I'm going to ask around. I'm sure people are going to tell me to kick rocks, but luckily, actually, the way I found my favorite crew now is I partnered on flips with people like there's a couple of guys. There's one of a flipper who is more of a DC guy but he bought a deal in Calvert County where I live. That was just. I mean he bought it because it was a great deal and it was a great deal. He's like look, I don't live there, I'm an hour from there. I know you work down there. Can you help me flip this property? We'll split it. You know, 50, 50. I've already got everything done. I said sure, and you know we.
Speaker 1:I met his crew like that and I asked him. I said, hey, man, do you mind if I use these guys down the line? He's like, no, sure, I've got like a hundred crews. So you know, sure, use them. So those guys have been with me for they do almost all my work now and those guys are like a lot of times people come across these deals. You know. Closer to where I live in Southern Maryland, where you know not a lot of people, I mean the population of my county is like 90 grand 90K you know, so it's not that many.
Speaker 3:I do see deals down there sometimes that I'm just like God, it's just, it's just too far for my guys that live in Baltimore. Yeah, exactly.
Speaker 1:So my guys, my guys tend to live in like Hyattsville Riverdale, so it's like 45 minutes for him, but it's not the end of the world yeah so they come down and they do these projects and we just bang them out. They're, they're, they're good, they, you know they. They do things to code. They're good with the inspectors.
Speaker 3:Yeah, so it's, it's been, it's been so you said you don't have any employees, but it's just you and your wife. Do you guys handle like all the bookkeeping and all like that back end stuff?
Speaker 1:We do have an account, but it's not. You know, that's an outside account.
Speaker 3:Okay.
Speaker 1:So we do have a like a bookkeeping accounting firm, but that's outside Um in terms of, like you know, I mean I don't even have a CRM. Like I don't even use a CRM cause they're I mean, the most of them suck man. Like they're all clunky, they all have all these features that you I was like man. I just want to simplify, simplify, simplify. All I want is some money. I don't want, I want give me the. I used to have a sales manager in the car business who told me give me the baby, not the labor. I've, you know, stuck with that for a long time.
Speaker 3:Do you have like an end in sight, like do you just want to get into a point where you're just coaching or you're getting out of flipping or like I'm just going to keep riding this? I?
Speaker 1:don't know. No, I mean I don't expect to ever retire. Um, every time I've set a goal, it's just as soon as I get close to it, it's like another goal pops.
Speaker 3:Yeah.
Speaker 1:So I don't think I'm ever gonna. I don't think I'm ever going to retire. I don't have an end game in sight. I mean, my end game is really freedom. Right, it's financial, total financial freedom. And do you do whatever I want? I can go to Costa Rica for two months and never pick up my phone, any of that stuff. I guess that's the end game.
Speaker 3:Yeah, yeah that that kind of freedom is different. Like you know, the money is one thing, but having freedom away from like people that need you to make sure that money keeps coming in, yeah, like that's. That's where it becomes really free, because I feel like I couldn't leave for a day without certain things falling apart. Like I could go somewhere, but as long as I have my phone.
Speaker 1:Yeah, I got to have my phone Like we travel and stuff, but I I work when we I work and stuff when we travel, there's stuff to do and the way I look at it, man, I've got young kids and stuff still. I've got a long time, so my goal is just to keep stacking money and Ideally, you know, you get to the point where passive income funds all your bills plus whatever lifestyle you want. You know. Yeah, if you get 100K a month in passive income, then you're pretty much, yeah.
Speaker 3:If you can't do it with that much, then you're doing something wrong, yeah.
Speaker 1:If you have 100K a month coming in without picking up your finger, then you should be able to do whatever you want. Yeah.
Speaker 3:Yeah, nvidia. I bought another hundred nvidia shares today side note yeah, I just keep buying nvidia keep on buying it that when I text jason like buy today, it keeps dropping. I'm like buy more, buy more.
Speaker 1:My 18 year old man. He he started day trading two years ago just want to see if he could make it. So there's this. You know, parent, setup one you can do. So he set it up and I have to supervise the account. I don't anymore because he's 18 now, but the last time I looked at it, right before he turned 18, he I gave him like a grand right to start. I thought that was. I was like that's a ton of money to give me. You'll probably lose it. You know, whatever he wants to give a shot, he was like like 9400 in there. When I when I when I lost access to it, I was like geez, okay, he was like, yeah, I don't have to worry about money at you have to be doing that every day every day looking making news and, yeah, the change is minor because of that.
Speaker 1:So he's majoring in computer science and software engineering and he's minoring in finance, fintech now, because he likes it so much. And he's like I'm gonna get into Forex next. I was like geez, getting a forex next. I was like, oh, geez, all right. I was like all right, man, look when you, if you, become a billionaire before me, we're gonna have a talk, okay we.
Speaker 3:We interviewed this dude um kevin davis recently who's like an ex-rapper. He like rapped with like um wu-tang, the one guy from like wu-tang for a while he had like one one hit wonder kind of thing. But now he made this like app.
Speaker 3:That's like a trading app but it's like a game to teach, like I guess, people how to trade yeah and it's like all based on the real market, but it's like an intro to trading and that's why he came on the show to like pitch that game or whatever, and it was pretty cool like the idea, and he had people that compete on, you know, on the platforms like a social media kind of thing. It's like that's cool.
Speaker 1:That's a good shit to each other.
Speaker 3:Yeah um, all right, one personal goal and one uh business goal for this year that you set, that you're trying to uh get to uh, personal goal?
Speaker 1:um, god man, my, my personal goal is always just like be a get better as a dad and a husband, like every every month, every week, every day. I just try to get a little bit better. A little bit better as a dad and a husband, like when I was young, my son I wasn't the. I don't think I was that great a dad when I was like 18, 19,. You know I was.
Speaker 3:That's a hard thing to be good at it.
Speaker 1:Yeah, I just, I just feel like you know, like the kid, like I mean he turned out to be a great kid and I think I was harder on him early on than I needed to be and that's like. That's like my biggest regret. So my goal now is just to be a real good dad and real good husband. I mean, I don't give a shit about anything else. That's the. That's the only reason I do all this stuff is for that.
Speaker 1:So that's my only goal. Um financial or business goal, I'd say get to 20 rentals. I mean at least 20 rentals. I mean at least 20 rentals by the end of this year. Nice, building the portfolio is the main goal right now.
Speaker 3:Yeah, nick, what are you doing with your portfolio?
Speaker 2:I'm getting out of the business. No, I'm just kidding.
Speaker 1:I'm buying. I'm buying over here.
Speaker 2:It's pretty steady right now. I mean I've.
Speaker 3:I see you're. The reason I ask is because I see you selling some stuff on Instagram. Now I see you selling. Usually you're posting about your refinances.
Speaker 2:Yeah, refinancing and purchasing. So the last six or seven properties that I purchased this year have been purchased with the intention of flipping Just because of the higher interest rates. Just makes a little bit more sense right now.
Speaker 1:Burr method's hard right now man. So we've done a couple sub-two deals this year year and those have turned out really well for us.
Speaker 3:But um that'll do it yeah the bird the burr method.
Speaker 1:Yeah, the sub two deals are like massive cash flow you know like 1500 bucks each. Yeah, but you know, but the burr method right now, like you got to buy that house cheap yeah, and then the cost of construction is high too.
Speaker 3:It's like so everything is high and then you're just like, you're buying these, these houses, just like spinning wheels. So are you trying to? Are you currently trying to sell off stuff that you have, or just no?
Speaker 2:no, and then especially the ones that are locked into that four and a quarter interest rate that you know the lowest point for, at least that I saw when I was refinancing in LLC, you know in 21, keeping all those obviously, that those are the. You know the cash cows as far as the cashflow is concerned, um, not really selling anything else, just flipping more. You know newer properties that I'm buying and you got what? A hundred. Now I still have 92, 92 units, yep.
Speaker 1:See, I got to get there.
Speaker 3:That's, that's so much. I can't just like the headache. Like we manage properties. So like I see like the, just the headache, and like I can't just like the headache. Like we manage properties. So I see, like the just the headache. And like I couldn't imagine if all of them are mine, like the amount of stress, like with vacancy and all that stuff that I don't know. I my goals always fluctuate, but like I'm like I'd rather just have a couple more, like Sirena park kind of rentals.
Speaker 3:Yeah, those like really nice hitters, even if the cashflow is not great.
Speaker 3:We're never getting another two of those. Yeah, we're never getting those deals again. No, I, when we before we signed the actual like agreement or the well, we signed the like, the assignment contract, but we didn't see what the assignment fee was. We're like how the fuck did this guy get this cheaper than this? Like I was just like send me the contract, I don't care like it's. Yeah, I didn't negotiate one1. I was like just send me the contract, that's why I like referrals.
Speaker 3:Man People are personal relationships and then we saw like damn, he ripped 50K on us. I'm like that is a hell of a deal.
Speaker 1:Like that is yeah, and it's still, you feel good about it. I mean, yeah, I mean it's I. That's why, man, I love that I pay agents five grand to bring me deals. They're off market and I mean, everyone knows that it's no secret. I'm constantly posting, but I'm in people's face all the time, just tell it. But once you perform and you pay these people, they just they treat you.
Speaker 1:They just keep coming back, keep coming back keep coming back we paid one guy 65 grand last year. One one, one woman. This year, just here already, and we're in fucking July, man, so we're going to pay out. We've had hundreds of thousands of dollars in referral fees. The first year. We did it all year. I looked at it. I was like, oh my God, we paid out 300 grand. I was like, oh man, we paid out 300 grand.
Speaker 3:Hell yeah.
Speaker 1:You know the first I was upset and then I was like, oh, that was money well spent.
Speaker 3:That's a good problem. We appreciate you guys coming out. I know you live kind of far.
Speaker 1:Um and uh, yeah, well how could people get in touch with you? One more thing Uh, best way to get in touch with me, I mean, is to, I mean, look me up on social. I'm always on like. I'm always on Facebook posting memes and telling people I want to buy houses. So reach out to me on Facebook, instagram. Um website is chess house hunterscom, but I mean I mean we don't get a lot of leads in there anymore. Just yeah, you can just reach out to me on social email. Any of that stuff. I'm around Cool.
Speaker 3:Awesome, all right guys, until next time.
