The Everyday Millionaire Show
Ryan Greenberg and Nick Kalfas are two Maryland based business owners and investors. Ryan and Nick discuss topics such as basics of financial literacy, building businesses, investing, and real estate. This podcast is for people looking to achieve financial freedom.
The Everyday Millionaire Show
How Justin Hilz Uses Creative Deals & Business Hacks to Win in Real Estate
Most investors are fighting for scraps in crowded flips. We took a different path. Ryan, Chase, and new guest Justin Hilz breaks down his 0% seller-finance win in Annapolis: how he framed the seller’s tax problem, structured principal-only payments, and added a balloon for exit flexibility without taking a 7% mortgage on the chin.
From there, we zoom out to the market. Sub-$300k homes still fly, but move-up buyers are locked by 3% mortgages and bracing for payment shock. Looking for leverage without speculation? We also get tactical about financing new builds without bleeding interest—use creative lot terms, pay permits out of pocket, wait to trigger hard money until foundation, and only pay interest on draws.
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Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Galvis. Alright guys, welcome back to another episode of the Everyday Millionaire Show. We're here with Justin Hills. What's up, Justin?
SPEAKER_01:What's up, guys? Nick uh cannot be here today. Chase is here. What's up, Chase?
SPEAKER_02:What up, what up? It's been a little bit, but I think I kind of sort of jogged my memory on how to run one of these things.
SPEAKER_00:Well, not really, because you forgot about the lights, you forgot the camera, you forgot a bunch of stuff. Okay, okay, okay. Um yeah, Justin is been well, you've been on the show once. Yep, in Cabo. About a year ago, now that we now we think about it, uh, when we were in Cabo. So um well, I guess what give a little uh pitch on who you are, real quick, to for the people that didn't hear that episode, and then we'll get rolling.
SPEAKER_03:Yeah, uh, so I'm Justin Hills. Uh I'm a mortgage lender, realtor, investor, wholesaler. I do flips. I don't believe in rentals myself right now, but I'll uh I'll change that mindset eventually.
SPEAKER_00:That's an interesting take. Yeah. Why?
SPEAKER_03:What's the I just don't want to deal with it? I hate people. I hate regular transactions. I don't want to fucking micromanage people either. It's gonna pain be a pain in the ass. Property management doesn't seem fun. So I you know, whether it's mine or other people's, I just myself, I just I understand the long-term plan of of Reynolds, but at 28 I'm like, I got I got some time. I don't would rather just keep flipping and making money.
SPEAKER_02:What are you investing your money in right now then?
SPEAKER_03:Uh stocks, crypto, flip. I haven't been able to find a flip for the last couple months, but actively looking and analyzing deals.
SPEAKER_00:Flips are tough right now. There's a lot of people I think that are not making, I know that are not making money. Yeah, um, and I think it's something that got like overpop popularized. I don't know how if that's the right word.
SPEAKER_03:Everybody in their mother flips now, right?
SPEAKER_00:Yeah, and that's kind of why why we've started doing just the the lots and new construction because it's a smaller subgroup of people that are chasing after those things. Like we're too small for like the Ryan homes and the big guys to want to buy like a single lot.
SPEAKER_03:Yeah.
SPEAKER_00:And it's too much, like people don't not everybody knows how to build the house from the ground up. So there's it's a smaller pool where anybody can call, you know, yeah.
SPEAKER_03:Anybody could buy a house on market or off market, call a contractor, flip it, sell it. It's yeah, not as hard. But making money doing that is is hard right now.
SPEAKER_00:And and since we control the cost in the construction part of it, it just makes sense for us to build them new. Yeah, and the product you guys have been putting out is spectacular, so and I think it's the just like the market for new construction, it's just easier to sell.
SPEAKER_02:Yeah, buyers aren't as wary. When you like, dude, I I know you experience it too. Um, but like buyers right now, like if anything's wrong during the inspection period, oh yeah, and inspect a new house at a used house price. It's like, come on, man. They're they're looking at it like whoa, this house looks new, but the inspector just told me there's this, this, and that wrong. What else is behind these walls? And it's it's very, I don't know, it's rough out here for a lot of flippers.
SPEAKER_00:Like when I could when I could literally go through our company cam and show them 500 pictures minimum of the house being built, like from start to scratch, like still, you know, uh scratch to finish. It's like that's a big deal for people. And I think giving like a little warranty and you know, builders' warranty and stuff, it makes people feel a whole lot better than buying something that they can tell is flipped.
SPEAKER_03:Yeah, and look at the quality of the work as well, right? You're not a Ryan Holmes or a Lenar, and not digging at those guys, but they're they're bulk builders, right? It's it's it's uh quantity over quality where you get to go in and put in some of those little more niche finishes, better quality pieces of the puzzle to build a really solid and nice house. Yeah, so 100%.
SPEAKER_00:And I I even think you know, in the long term, um, some of these things would be good rentals to hold too.
SPEAKER_03:Yeah, the one build the rent, I think, is really where people should focus on hold it for a couple of years, get that appreciation, pays for itself, then sell it, get that exit liquidity.
SPEAKER_00:So this next one that we're doing up in um Linthicum, it's on Mansion Road in Linthicum. Um Kyle, who's selling us the lot, owns the house next door. He bought a house with a couple lots attached to his two other lots, and we're buying the first one right now. He rents the one that um is next door, unrenovated for$3,200 a month.
SPEAKER_03:Damn.
SPEAKER_00:And that house is like a simple house. It could be built with like two by twelves instead of trusted, like engineered. It doesn't have to be engineered at all. It's a very square, like you know, simple house.
SPEAKER_03:Yeah, your cookie cutter style house, you're gonna probably be all in for what four, four fifty-ish?
SPEAKER_00:With land.
SPEAKER_03:Yeah, and then turn around, do a refi off that.
SPEAKER_00:Yeah.
SPEAKER_03:Based off appraised value, you're gonna cash flows pretty decently off that.
SPEAKER_00:There are comps, comps that that they sold in the same neighborhood of the same house is like upwards. It was five oh some, you know, low fives, but either way, like you pull most of your money back out, you have a brand new thing that you know is shouldn't be breaking for at least five or so years, you hold it for five years, then you sell it after you collect you know some cash flow for five years, you sell it, and you at that point then you're eligible for a 1031 exchange after the first year. So you could also do um a 1031 with any of the proceeds and keep that money rolling.
SPEAKER_03:Yeah, old carpentry teacher of mine Brett's doing with uh this one.
SPEAKER_00:Which one? I'm selling one of these lots to Brett and his partners, and um I think that's what they're gonna do. They're gonna buy it, rent it, and then 1031. There you go.
SPEAKER_03:I the cash flow is gonna be super tight on that though.
SPEAKER_00:Yeah.
SPEAKER_03:Well, do you even have to 1031 at that point? Because you're taking out debt with a mortgage.
SPEAKER_00:Yeah, but the the proceeds when they sell it. When you sell it.
SPEAKER_03:Uh when they sell it later. Yeah. Okay, okay.
SPEAKER_00:So like let's just say you're all in for four and you sell it for five, they'd be asking for you know capital gains on a hundred.
SPEAKER_03:Oh, they plan on selling it.
SPEAKER_00:Yes, but they want to take advantage of the 1031, and that doesn't that doesn't work for the flip or you know, quick new build model. You have to hold it. So the idea is you hold it for a couple years, you pay down a little bit of debt, and and you know, whatever, and then you sell it, and instead of realizing those gains, you push that into the next project. That's that's the play, essentially. Um, it's a good play for people with like money that they just want to keep rolling and they don't need it, like and they don't really need it. Right. If you can put in a hundred K, 200k into something like that and just keep it rolling and not have to touch it and worry about touching it. That's a good play, and you can keep rolling that over.
SPEAKER_02:I think it's a good play with people our age right now. Like the the flip income that we have coming in, if you just keep 1031 in that and then you eventually just roll that into your primary, and then you don't have to worry about ever paying tax on it because it just rolled into it.
SPEAKER_00:Yeah, so I mean that that model works. You hold it for a couple, and that's the other thing too with with rentals. If you do like what the way we do it, and we bought them and pretty much gutted them, made them brand new inside, even if we're you know, not new construction, but the stuff that we bought, renovated, you make them bulletproof, but they're only bulletproof for a couple years. So after five years, shit starts breaking, then it starts costing money, the cash flow is gone. At that point, that's when you sell it, you put a coat of paint on it, you clean it up, it's five years old, then you sell it and you roll that money into the into the next deal.
SPEAKER_03:Yeah, and I mean think about it from a buyer's perspective, right? You know, when you go walk in half these houses and you see the copper pipes, the well water, the the cast iron, you know, plumbing for the sewage, it's like, oh man, when that starts going, I gotta fix all that crap. So if you go into a new house, it's already the PVC, CPVC, PEX, that's gonna last forever. It's like, all right, cool. You know, even if it's five years old, I gotta put in a new fridge or a stove. Great. HVAC will last 10 to 12 years, you know. Yeah. Roof's gonna be good for another 15, 20 years.
SPEAKER_00:So that's the sweet spot. I actually have a house. This is a kind of an interesting thing that I'm doing that's not I I just suggested this and I realize I'm doing the opposite. But I have a house that um it's it the mortgage is like six hundred dollars and the rent's like sixteen hundred dollars. So it's good, it's good cash flow. But I've had it for close to ten years now, and it's kind of fucking falling apart. We've only we've put like band-aids on the renovation, it's kind of like you know, it's a kind of like a yeah, you move it along, you know, get it put you know, new vanity in here and there, whatever, dumb stuff, but we've never like fully gutted it, and it's a giant house in 21218, like it's one of those like three-story, like big townhouses. It takes it, it would be a lot to gut that. And I have um a bunch of work to do there, and I only owe like 30 grand on it, and I it's worth like probably like 180, 190 as it sits. Um, I would imagine right now.
SPEAKER_03:Yeah, but you look at that analysis, how long it'll take you to make that 180, just might as well sell it and take that profit.
SPEAKER_00:That's kind of what I was l thinking about, and then I said, nah, fuck it, just fix it up and rent it, and that's what we're doing. So uh I don't know. I don't I'd be interested to hear other people's take on that.
SPEAKER_03:But I mean, that's the analysis I did for my condo before I bought this new house.
SPEAKER_00:This is the thing I forgot to say. I have a 2.75% interest rate on it.
SPEAKER_03:That's great. I got rid of a 3% and got zero.
SPEAKER_02:I mean, you only have 30k, you know, there's only 30k left on it. So I mean, at the end of the day, like 30k is 30k, but if you could sell it and roll that money into other money, it's not like you're you know, if you had a a mortgage down of like 200,000 or 300,000, 2.75, I'm like, alright, yeah. Yeah, that's true. I don't know. I I just don't know if like how much is are the renovations gonna cost and they're gonna eat up that cash flow and how much is the city really appreciating? It's not right now, I can tell you that much.
SPEAKER_00:No, it's definitely I mean from when I bought it, it appreciated a lot. Of course, sure. So I've gained I've gotten the big jump in appreciation. Um, but yeah, no, I there is an argument to just sell it and take whatever a hundred and probably net 125,000 and put it into something else. But uh yeah, that's but that's not what I'm doing. It's already already got guys over there fixing it. A little too late. A little too late. So uh one of the reasons Justin came on because he just moved from uh his first condo into a house that he negotiated a deal, a heck of a deal on with um you know seller. So I'd like to just let you tell that story real quick.
SPEAKER_03:Yeah, so uh, you know, I think I I was in the same situation that even yourself is in, Chase, where you know, we have these sub 3% interest rates, and you're like, damn, how do I want to get out of this and buy that next house? And what does that look like? Um, opportunity presented itself in in Annapolis, where my wife wanted to be. Um that was always her goal was to try to go back that way, and ended up negotiating a seller finance deal with 0% interest, um, so principal payments only, and had instant equity. So went from a 3% interest rate to a 0% interest rate.
SPEAKER_02:How'd you get in touch with that that seller in particular?
SPEAKER_03:And so my brother-in-law was supposed to buy that house like four years ago, but the guy wasn't quite ready. You know, time is always of the essence, and time kills all deals. He waited a year, guy still wasn't ready, so we went and bought a house, helped him buy his house, um, where all of his friends were buying to, like shady side area. And then the guy called. Uh, my mother-in-law was like, Hey, you know, is he ready to buy this house? She's like, He bought a house a year and a half ago. But I know somebody else that would be interested. So we went toward the house. Uh you know, it's everything the wife wanted, where she wanted to be. So did you have to did you have to put anything down? No, 100% financing.
SPEAKER_00:100% financing.
SPEAKER_03:I paid all closing costs though. Because he would have had to pay out of pocket to sell it to me.
SPEAKER_02:But well, that's a heck of a deal right now. 0% finance, yeah. We'll clap for you. Good job, buddy. No, I mean, dude, that's that's a crazy deal. Uh 0% financing, zeroed down. Um, creative, creative financing there, Justin, and you don't see that a lot.
SPEAKER_03:No, I think people leave a lot of money on the tables and and both perspectives, buyers and sellers.
SPEAKER_02:So just just for our audience and and investors that are looking to get this type of deal, I mean, what was the benefit? What did you pitch the seller on the benefit of him giving you a zero percent interest to him?
SPEAKER_03:How did you pitch that? Um, you know, there's a thin line between tax evasion and tax avoidance, and he was trying to kind of kick that can down the road. Um, it wasn't his primary residence for two of the last five years, so he would have gotten screwed on capital gains tax. Um, so he mentioned that to me, was worried about that taxable event on his side, and I was like, well, we could structure this in the form of debt, and we could, you know, avoid that process.
SPEAKER_02:Sorry to cut you off here, but I I want to was he already open to seller finance ahead of time?
SPEAKER_03:I threw it out as like kind of that like Hail Mary, like, hey, let's see, right? And I didn't want a thirty-four hundred dollar a month mortgage. Right. Uh this is when you know mortgage rates are basically seven still. And I was like, oh god, you know, I love my wife, but not that much, you know. Right. Um, then I was like, what if we could do something that helps resolve this tax issue, but also gets rid of the house off your hands and the responsibility of it? And he was like, Okay, you know, what are your thoughts? I said, Well, there's you know, creative financing instead of me going and getting a loan at 7%, taking on this payment, and you're worried about the taxes. What if you just finance the house and a debt structure and then you don't have to worry about that? And then the second part of that pitch was as well, is that well, let's just not include any interest because then you'd have earned interest income at that point. So, okay, well, how do we do that? Well, we set it up as principal only payments, so now there is no it no income for you to claim. Um, and then I just make payments and then I refi you off and another debt down the road.
SPEAKER_00:Is there a balloon payment on that?
SPEAKER_03:Yeah, three years. Three years, okay. But I might try to modify it after three. I'll be like, hey, you see how nice this is? Let's just do this for a couple more years.
SPEAKER_00:Yeah, never be late on a payment. Never bug.
SPEAKER_03:I was like, I'll write you the I'll write you the check for all three years today. Yeah.
SPEAKER_00:Yeah, that never miss a payment on that deal. Yeah, yeah. That could be a good guy to use for some like lending and stuff too. If yeah, you know.
SPEAKER_03:Um absolutely.
SPEAKER_00:Yeah, that's a that's a heck of a deal. I've been I've been in this shit for a long, a lot longer than you have, and I have not had been able to negotiate that ever in my career.
SPEAKER_02:Well, you you did no uh you guys negotiated your Tampa house on seller finance.
SPEAKER_00:Yeah, but we're paying interest. But you're paying interest, yeah, yeah. Yeah, I've oh I've done I've done several seller finance. Yeah, we've done seller finance selling them to people. I've never gotten zero percent interest. It's good. I mean, when I was when I first started, my first like hard money loan lender was six percent no points. That's what I started for.
SPEAKER_03:Damn, I wish I could get that today. I'd I'd borrow that all day. Yeah, maximize that line.
SPEAKER_00:Yeah, so that's that's been my first that was my first uh lender, and then obviously it got more expensive from there, but yeah. Good stuff. So what are you guys? I mean, the market's kind of really tough right now. I mean, I just had a listing that normally would have sold in three or four days on the market, um, sat for 55 days, and I had to go through a lot to get it sold. Um, what are you guys seeing on your on your end with the market from the mortgage perspective and realtors perspective?
SPEAKER_02:Uh I mean, I just ratified a contract today, um, and that was the third one this month. So I think I mean last month was really slow, Jesus. Um, but this month, I mean, granted, we're what 10 what is six days in, whatever it is. Um, just seems like these last couple weeks have been pretty slowly. Yeah, it picked up, I guess, rates and whatever else. But I mean, I don't know from mortgage application side of things, but it just seems like buyers are getting a little more active right now. Um, so we'll see.
SPEAKER_03:But I mean, I think a lot of people I think it ebbs and flows, right? People when they first want to buy a house, they're like all gung-ho, all in, oh let's go. Then you get them pre-approved, they're only pre-approved for X amount, then they see what their budget really buys them. They look at a couple of those houses, same thing you said. Well, I think we were talking earlier, I don't know if we were already recording or not, but it was like some of these pin lists, and these people go immediately, no, no, no, I'm not gonna do anything. I'm like, that's I got a buddy in here for 200 bucks and get that fixed. Like, that's that's not a problem. Um, so I just think it's it just depends on the intent and how they approach that conversation, having the right realtor partners to explain that process to people. Um, but I mean for the mortgage shot, I got a little over a million dollars worth of mortgages closing out this month. I got one refi, two purchases. Um on the real estate side as well, all my listings are moving fast. I sold my condo in under a week. I sold uh uh another property one day on market.
SPEAKER_00:So I did hear some somewhere that the um like 250,000 range is still selling like normal.
SPEAKER_03:Yeah, so sub-300. Sub-300 seems to be what everybody, you know, if if a couple are together, they can basically uh be approved for 300 grand, right? It's not that difficult. Um the payments, you know.
SPEAKER_00:Which which makes sense because that's tech that's the starter home, right? That's probably what they're but the issue is finding a house in that price point now. Once you have a house, like you guys are in the situation of your interest rate's so low, you don't want to move to the second house. So you're just stuck in your starter house. Everybody seems to be stuck, and that's why I think from a construction standpoint, we've seen you're getting busy with additions, add-ons, I need more space, but don't want to lose so many additions because people are just stuck at their house and with that rate, and they do not want to move because they're gonna just downgrade essentially.
SPEAKER_02:Yeah, all the move up buyers are locked right now, yeah. Um, so they're just kind of stuck where they're at. For me, I'm not necessarily stuck, like I don't need to go anywhere. I just want to buy another house because I'm seeing all these price decreases and everybody else flaking away. Um, so I'm just more motivated when I see other people um not buying. So that's that's my motivation. But the the other part of it I was telling you, Ryan, uh, last week is that like, dude, I'm looking at like$600,000,$700,000 houses at like a even at like a 5.3 or 4.8 rate, and it's gonna be like triple what my current mortgage is, and then that's like that's a hard pill to swallow. Even with a thousand dollar cash flow rent from my current property, I'm like, man, I just there goes all my risk risk tolerance.
SPEAKER_03:Yeah, that's that payment shock, man. We talk about all the time in mortgages, you know. Everybody when they bump up and they're like, oh, well, I bought my house for 300, I'm going to like 400. I'm like, yeah, but you also were to three, now you're at a right, you know, mid-six. The payment goes up drastically, you know.
SPEAKER_00:Yep. Yep. Yeah, I do not um do not know what the answer is. I do I do think that they're gonna lower rates, but I don't think that they're gonna lower them enough to for it to be where it was. I mean, I don't think you're gonna see two and a half, three percent rates. So it, you know, you just people are gonna have to get used to the prices, and it might take a little while for people to adjust, but I mean at the end of the day, we're under housed as far as like you know, builders and stuff in this in this area anyway. I know Florida's having some big issues because they've people have started moving away from Florida and their peep builders just went wild with like building new communities and houses are sitting. Um I think places like Texas, certain parts of Texas. I was listening to some podcast or something that that they're hurting as well.
SPEAKER_03:Yeah like big it's pockets, but that's everywhere at all times, right? Even when other markets are thriving, there's always that one that's not doing that well. Yeah, so yep.
SPEAKER_00:Um I know our our Tampa house has definitely topped topped its value. Um just there's houses selling like over a million dollars next door now. You don't see that at all. So the uh yeah, I think the Florida market's taking a hit, but I think we're strong here. You got government, we have so many workers here, like so many like industries that I feel like we have a great place to be, like investors and uh homeowners.
SPEAKER_02:I mean it's I think you said you said it well a while ago, but like Maryland is very insulated with federal workers, healthcare workers, like it you know, we just have a lot of contractors here too. So I I think the economy still thrives, and we don't typically feel it as bad as the places like Texas and Florida and like some of the some of the other places.
SPEAKER_00:So two estimates that I went to this week were people that were home from the government because the government shut down, and they're like just tired of looking at their kitchen, made a post on Facebook looking for a kitchen in in the group, and I I got got them. And so I'm like, hmm, this is good. Government shutdown means all these people because my neighborhood's full of people work for the government. Yeah, um, how many of these people are gonna just be in their kitchen all day and be just mad that it's not upgraded and they're gonna call me? Um that's why we're starting to we're starting to market the heck out of this construction company because that's where I see I think a lot of people are gonna be in this situation for a couple years.
SPEAKER_03:There's a lot of almost when everybody was home all day. It's like I hate this bathroom, I hate this kitchen.
SPEAKER_00:Yeah, I just mean in general, people stay you know, sticking around in their second homes and and saving up some money and doing the renovations. Like we want to be um doing those renovations for everybody.
SPEAKER_02:Well, I think you're in a good spot too because you're in an area where people want to be too, right? Like Shipleys, Millersville in general, like this side of Millersville. But like, you know, I I think Saverna Park, those areas, like you're just in a gold mine of like people want to be there, they're okay with sticking around, the house might be outdated, but eventually they're cool with saving some money and and getting it done or pulling a HELOC, or like we were talking about earlier, just you know, people or or um inheriting homes, yeah, like a grandmother's one you're doing right now.
SPEAKER_00:So yeah, that's I mean, that's uh very typical in Savannah Park, like especially on the water. Like things don't really sell that much, it's really just passed down. That's what you don't really see a lot of houses sell. Um a couple that I'm doing haven't didn't ever hit the market and sell. They just passed hands, like somebody it's either through family or somebody knew somebody, it didn't actually go up, you know, for sale. Um, the same that new build that we're doing that never actually went up for sale. They just knew you know they knew the person and made a deal.
SPEAKER_02:Yeah.
SPEAKER_00:Um, so yeah, it's a I think I'm really bullish on like all home services businesses, like from a business perspective. Like um I think home services businesses right now are are gonna crush for the next at least decade. Forever. Well, the the reason I say decade because we're gonna be so understaffed with the people that are leaving those industries in their 60s, you know, fit late 50s, 60s, sometimes 70s, the all the the only the good people that know how to work on HVAC systems and boiler systems and whatever uh electricians, we're gonna be so understaffed with that, then it's gonna be like then it's gonna be cool for people to go to trade school and do that, and then we'll have enough. Like, but I think it's like a 10-year cycle of we're gonna be like, oh shit, no one knows how to fix the fucking air conditioning. Yeah, like we're gonna not have people to fix the air conditioning soon. And you're gonna have to pay you're gonna have to pay a crazy amount of money. So then everybody's gonna be like, holy shit, this fucking HVAC guy's making a million dollars a year. Yeah, and like, why would I go to college?
SPEAKER_03:I mean, they've they've been talking about that for years, man.
SPEAKER_00:You know, I know, but it hasn't ever so many of those people that are just holding on to those businesses, like those 65-year-old guys that are holding on to those businesses because they're making money and they probably want to keep working. Um when they're actually done working, they have to find people to either take over or the business is just gonna die.
SPEAKER_03:Yeah, I mean, I think that's the opportunity to get some seller finance there too.
SPEAKER_00:Yeah, I've been offering to buy those businesses and I've been trying to get someone like you know, someone like Chase to buy a HVAC company.
SPEAKER_02:I am IOM.
SPEAKER_00:We're we're working on it. We're working on it. But and then we can feed HVAC work and come, you know. Um I think there's a lot of opportunity in buying businesses. I think we've talked about this a ton of times, but buying businesses um I think right now for the next 10 years or so is gonna be really lucrative. I think some people don't even know what they're sitting on. Like some owners are running a business that they have no idea could be worth millions of dollars, yeah. Um, especially in the trades fields, like plumbing and HVAC companies that do service work and they have recurring service work, dude, they're worth like 8 to 13x their EBITDA.
SPEAKER_02:Yeah, I was just talking to uh one of Sean's buddies came over and fixed my uh more he looked at my HVAC because your go was a little expensive. Um, anyways, uh he came over and looked at it and he was telling me that the owner was about to retire, and I like perked up and I was like, oh really? Um, but he was like telling me that he's supposed to be getting in on like as an owner operator because the son's taking over, but the son knows nothing about HVAC. So that would be kind of my position of like I don't know a lot about HVAC, I could I know majority of like I think what I would need to know, but I couldn't be the operator, I couldn't be you know director of operations. Like I'd need somebody in the field to stick around for a couple years. Um, but again, I think uh like you said, a lot of people don't know what they're sitting on or what the value is. Like that's a retirement plan for for some of these people.
SPEAKER_00:Yeah, I think you could easily negotiate a seller financing situation on a business like that because those people typically have some money already, so that they don't necessarily need a large sum at one time. So if you can come up with a fair structure that you could pay them back per month and be able to say, hey, look, I'm gonna pay the SBA ten percent, whatever loan product you're gonna get, probably gonna be paying eight to ten percent for for that loan for the business. You offer to offer him zero and see what he says. But you can offer you can you know offer him seven, eight, nine percent interest on top of it. That's a really enticing way to um you know say, hey, the bank's gonna take this money, or you can just have this extra money. That's that's kind of how I pitch it. And um I think you get I think there's a lot of opportunity for somebody to actually sit there and grind. I just don't have the time to talk to people and like call and try to do that. Oh, I've been in a two-minute car ride with you.
SPEAKER_03:Your phone goes off, don't you?
SPEAKER_00:I don't know how to I can't, uh yeah, I wouldn't there's no way, but my phone wouldn't I would have three phones that would never I would never be wouldn't work. Um, but no, somebody, somebody should. Another cool business. I think did I tell you about this laser cleaning thing? Oh, you were kind of mentioning it at the gym. Somebody has to start this business. We have to find this is another idea. Listen to this. So for wait, wait, wait. Laser cleaning is part of it. Okay, but you find like a 22-year-old kid out of college or at an 18-year-old kid out of high school, and you're like, you can work this laser. So the lasers are like 12,000, 15,000 will get you like a good laser, and it'll clean any surface, like rusted rotors on a car. It'll be a little bit more. Oh, I've seen that. Yeah, the metal and stuff. Um, grout. How many people like their grout gets dirty and they just leave it dirty because changing the grout is a nightmare? Like you have to chisel it all out. This laser just cleans it perfectly. Is it handheld or so it it's a big the picture that I saw, the box fit in the back of a minivan, but it was it was big, and then it has like a a wand and a a light like a handheld thing. Okay.
SPEAKER_02:I'm just trying to figure out how you get in the house to do about it.
SPEAKER_00:So it's like it's like imagine a generator, a size of a generator, but maybe a little bit like a big generator that has wheels that you can like roll around. That's what this is. Okay. And it's like a laser, right? And you just you can offer people to send in like rusted parts of things, like you know, they you can go do boat a bottom paint of the boat comes right off. Really? Yeah. Yeah. So just and it has all different frequencies to you know, like how deep you want to cut into certain things or whatever. But you can if you just say, hey kid, you know, somebody go operate this thing. You're gonna teach you how to operate this thing. No, you gotta teach them, dude. If they can't video if they could teach military, you're a dumbass at 18 in the military to uh shoot a gun and be safe, then we can teach somebody at 18 how to I was 22. You were 22, but you're still dumb. My brain developed. Yeah, you're still dumb. So you know, but if we could teach Chase how to operate a gun in the fucking Air Force, then we can and there's no way that we can't teach a guy to laser something. And you say, What's the biggest hurdle for somebody that age to start a business? It's money. Yeah. 12 grand. You're like, I'll put the 12 grand in. You just have to work the machine and you just collect the you work on the marketing, do a little SEO, a little video, send the kid out.
SPEAKER_03:Well, what about them dudes on TikTok and on Facebook? I always see like that have the landscaping company, but they just do it for free. Oh yeah. Like that's the whole business in and out of itself now, too, where they're just driving that content creation side. And they're like, oh hey, your your grass is overgrown. I'll give you a free cut. Just let me film it or whatever. And then that is, and they're like, oh, by you liking and sharing, that's how I do this. And they don't do any paid for jobs. It's all for free.
SPEAKER_00:Well, I think that those people do get jobs from those things. Yeah, probably. I would imagine that would be the case if they're like SB mowing. It's like it's a crazy thing that I know this. Yeah, yeah. That's them though. Yeah, yeah, yeah. That's a guy. It's a tag on the side. See, that's that branding. You already know it. Um buy a shirt. But but yeah, no, I think they do get paid jobs. It I don't think they just do everyone for free, but I think they use it as content. Yeah. But I think like starting a business like the laser cleaning thing, I think the best thing to do would be give it away for free to like if you find a a mechanic and you're like, hey, let me come over and all your tools, all your whatever, show you what this thing can do. And you offer to do a couple things for free. You go to a couple, like I would go to like some commercial places, like mechanic shops would be the best because you can clean like brake rotors and shit like right away. Just Azure shows now.
SPEAKER_03:You're ruining their markup.
SPEAKER_02:I'm just I'm just thinking about this 18-year-old kid holding a laser doing it. Somebody says his name, he turns around as he's holding it and chops a guy's leg off or something.
SPEAKER_03:Too busy scrolling too.
SPEAKER_00:We're not gonna get like a dum-dum to do this. We gotta get a good kid. I know. I'm just anybody, it doesn't have to be a kid. I'm just thinking about something. You gotta teach him. You just gotta teach him. Hey, don't cut his arm off.
SPEAKER_03:Hey, I'm I'm only financially responsible, you're not for any not liable for any damage or injury.
SPEAKER_00:That's what insurance is for. So insurance would cover an arm cut off.
SPEAKER_02:I don't know if that's in the the fine print.
SPEAKER_00:We'll talk to the lawyers. No, I think um that's a cool idea, though. It's a cool business. And I can spit these businesses out like in no time. I wish I just had like the ability to like unappear somebody that would be willing to do the hustle, and I could just put up the money and and the machines or whatever and send them off to do their thing. Here you go. This is your platform. This is my platform. If you're 18 in the DMV and you and you want to start a small business, call me. It's actually a prop probably not a bad pitch. Probably not. Yeah. Um so what's your next one? You had wait. This is what we could do. Shark Tank. We can we could be we could do a shark tank episode. So we'll get people that want to start small businesses, come on the show and pitch us. And we'll invest.
SPEAKER_03:I like that. Hey, we could do a local local shark tank.
SPEAKER_00:I like that. Not a bad idea. What are we gonna call it?
SPEAKER_03:Minocon?
SPEAKER_00:What's going on today? I'm I'm on fire with these ideas. How many add a rods did you take? My medication, I took one today as prescribed. Okay. Alright, what's the next one? Um gutter cleaning. Dumb and easy, dude.
SPEAKER_03:Well, I know landscaping companies add that in for the fall.
SPEAKER_00:My gutters need to be cleaned right now. And that was that's what made me think of it. But gutter cleaning, such an easy thing. You have a truck with a couple ladders on it. Kind of seasonal though. Twice a year, you get as a bunch of them. Yeah. 300 bucks. Just get on.
SPEAKER_03:Yeah, but if you're also doing gutters, you might as well offer to hang Christmas lights and shit too.
SPEAKER_00:Christmas lights is seasonal. I've seen people uh uh recently that I know that are in like the landscaping space posting about be doing uh Christmas.
SPEAKER_03:But that's how they stay busy during the season, you know what I mean? Year round. Because once you're done cutting grass and the weather gets colder, it's like, what am I gonna do? Well, let's take care of the leaves in the gutter. Yeah, and then oh, Christmas coming up, let's put some put some lights up.
SPEAKER_02:Yeah, yeah. I saw uh they're doing Christmas lights, but they'll do like storage too, so they they'll store your Christmas lights for you so that way you don't have to worry about it, and then you just are on a yearly contract. So that I mean that's that's another business that I've seen that's been very popular. I mean, these dudes are charging like five thousand dollars, depending on like you're depending on the I mean Ronald Big House. But like a house like yours, probably it's probably close to that. But they're storing your lights, they're they probably bought your lights, and it they might do like the decorations outside too, not just hanging lights. I'm glad I built them into my house. Yeah.
SPEAKER_03:Well, there was some lady I saw on TikTok, I think it was like uh one of those business pages, but some lady that comes and decorates your house with pumpkins in the fall. She's doing like a million dollars. Literally, just like your walkway or something. She stacks them with pumpkins, so it looks nice for the fall. Coming into Halloween, I guess. See, that's what you're doing like a million dollars.
SPEAKER_00:Another business right there. Now I think there's just so many, there's so many ideas that I just come up with. I'm like gutter cleaning in an like in an area like mine where there's a ton of trees, and there's all these stupid freaking egg corns, dude. The egg corns are terrible. They fall. They there's so many egg corns in my backyard in my gutters right now. And then last year last fall, my or maybe this spring actually, my basement flooded twice because a gutter was clogged and it like overflowed into my basement like little egress area. And this the leaves got into the sump pump and blew the sump pump. So I had that happen twice in a month. Like my basement flooded twice in one month. It was insane. Um so gutter cleaning, and it should be an annual contract. That's where the bunny is. Yeah, the subscription-based services. 600 bucks a year. We come out twice, we call you in the fall, you know, beginning of fall, and put you on the schedule, and then in the spring.
SPEAKER_02:You don't think you need your gutters cleaned more than twice a year? Probably not. You just said your house flooded twice in the fall.
SPEAKER_00:I know because but there was another, it was another issue though. Oh, okay.
SPEAKER_03:Yeah, that was leaves, the other one was acorns.
SPEAKER_00:Yeah, no, the actual like downspout thing was got clogged. With what the gutters were clean, the downstout thing got clogged.
SPEAKER_03:Oh, so that was an add-on you just didn't pay for it. You got the gutters clean, but not the downspout.
SPEAKER_00:Yeah, I don't know what the fuck happened, but regardless, that's what happened. Um but I think the subscription model, and then you just you do an SEO run and you just sell that like as tight of a location would be key. You want it to be like as tight as possible and as many homes in the in the smallest radius as possible. Yeah, and that's how you make a lot of money in those businesses because you don't there's no drive time. Yeah. If you can do 150 homes in one neighborhood, yeah. If you live in a neighborhood, you got an extension ladder, you can just rock and roll in a Facebook group or you can pretty much, I would imagine, put out like double at least double the amount of jobs if you're staying in the same neighborhood. And you just because you could do a full house in there, less than an hour. Oh, for sure. With the right equipment. You go in there with the right equipment, it's less than an hour, and you could just boom, you know, hit, I mean, what, five, six jobs a day. I think people are paying like three hundred bucks a time, you know. That's it's a lot of money. You can make five, fifteen hundred bucks a day minimum.
SPEAKER_03:Think about the people that do the roof cleaning too, up there with a brush and a soft soft wash, yeah. And they just scrub the algae off. It's like anybody could do that, but do you want to be up on the roof? No.
SPEAKER_00:Oh no, no, no, I don't want to be up there, but I would run that business. If I was like starting a business, that would be a good home services business to start.
SPEAKER_02:Yeah.
SPEAKER_00:We're here just, you know, brainstorming for people that are listening that are like, I hate my job. And speaking of jobs, not and none of us have a real job. Why do we do this during rush hour every time?
SPEAKER_02:I don't know. That's a really good question. But just so we can laugh at everybody that has a job? Yeah.
SPEAKER_00:No, I hate the fact that every time I it's eight minutes away from my house and it takes me 30 minutes every podcast to get here. Well, build a build around the 4 30 in the morning. Tunnel. We'll do a tunnel with the tomorrow.
SPEAKER_03:Yeah, like the Tesla tunnels or whatever and Kyle.
SPEAKER_00:Um no, we're gonna start changing the times of these things. But all right, so we've just given people a bunch of million dollar ideas. Justin talked about his seller financing deal. Chase, what else? We got anything else on the docket for today?
SPEAKER_02:Um, no, I mean we have we're moving on a new construction in Annapolis.
SPEAKER_03:Oh, is that breaking ground now?
SPEAKER_00:Yeah, we got the silt fence in yesterday, and we moved the is that that black like thing around? It's a few. It's called a silt fence. It's called a silt fence to hold the dirt from going into other people's yards or the street or whatever.
SPEAKER_03:Oh, I thought it was like boundaries for like the property line or something.
SPEAKER_00:No, it's just to hold ground. Um fun fact. We moved the path so we had had an easement with the city of Annapolis to move a path so people could still get to the park that's behind us. Um and we're starting to dig next week, so we'll be off the bottom.
SPEAKER_02:How many tons of dirt did you say?
SPEAKER_00:I think it's like a hundred tons of dirt that has to leave there. Good lord.
SPEAKER_03:What are you like up on a hill?
SPEAKER_00:No. No, it's just the it's an eight-foot basement. Yeah, it's a long and it's kind of like long and skinny house. Eight-foot basement, it's just a lot of dirt that needs to move. And I didn't I never like really thought about it in pounds. I forget the exact pounds. I'll have to find out what I'll tell it on.
SPEAKER_03:Because it's 2,000 pounds per ton, right?
SPEAKER_00:Yeah, I don't I just I think it's a hundred, or it could be four hundred tons. It's a crazy number. I have to I have to look it up. I don't let me let me look it up with in my notes with the foundation guy before I um say it that it but it's a lot of fucking dirt. Eight foot down, 55 foot long. Oh shit, that is a long house. God damn it. 20 foot, and it has to be dug deeper than eight foot for us to get eight foot. Yeah, because you gotta do so. You're really digging down like 10 foot to get a foundation slab. So you got 10 foot deep, 55 foot wide, and a little bit wider because you got you need space to set the box, and then 20 foot, long 55 long, 20 wide. That's a lot of dirt. Yeah. And that lot, most lots, what you can do is, and we oh, that's the other thing. We have to dig a drywell in there. So stormwater management we have to put. So that's another 12-inch diameter by eight foot hole in the ground. Where does that go? Closer to the park. Okay. Um, but it's you won't see it. Yeah, it'll be like a drain cap at the end of the day. Like you won't really see it. But um just that all that dirt has to come out of there, and that lot is tight, so we can't keep any dirt on site. So we're gonna have to kind of trucking it out.
SPEAKER_03:Back out a new one.
SPEAKER_00:That's why that's one of our costs. That's why one of our costs is is high for that part of it because they can't leave any dirt on site. So we have to constantly have a truck. Is that because of the park? Or yeah, there's just no space on the lot. Like the house is taking up a lot of the lot. If you think about like when we're building, you're we're we're building almost like a townhome style. It's like skinny and long, but it's it's so it's there's just not a lot of land on either side of it, so there's nowhere for us to put all that dirt. Yeah. Whereas like the one in Saverna Park, we were able to kind of pile it up and you know keep it up. Take it as you can keep it on site and then take it all at one time. Um but yeah, so that's one of the things driving the cost up on that one. But we did get a progress inspection with the inspect, we talked to the inspector and everything's moving forward. So it's my first one in the city of Annapolis, and it's a whole different department. Yeah, so that's another interesting thing locally. Like Anoron, Annapolis is in Anorondo County. Anorondo County has its own. Yeah, but once you get into the city, it's a city of Annapolis has a totally different permit department. So this is my first one doing uh new construction in that district. So it's it's a lot. The new construction stuff's a lot of like just admin and like talk, you know, meeting with the inspectors, talking to these people. It's it's there's it's so different than flipping. Right. Um, we should we should like one day probably dive into that because it's something that everybody can learn to do. I think honestly, easier than it's to learn how to flip because you have to find and renovate so many houses to learn stuff on a flip. With new construction, it's kind of like if you have the process down and you know how to check that things are done right, you're starting from scratch.
SPEAKER_03:Yeah, there is no process to a flip. You could have six split foyer houses, one all the you know, sewage pipe was already done to PVC, the other one's all cast iron. Like you have no idea when you get on, you know. We call it Pandora's box most of the time because you have no idea what you're looking at.
SPEAKER_00:Yeah. Rip over that wall and it's like it's it's actually arguably easier to build new construction and learn the process and learn how to you know check in on the work and make sure things are getting squared and done right. But I think it's a great, great tool. Um, and I think it's way better, safer than renovating and and selling right now. Just my personal opinion.
SPEAKER_03:If it's something you you can go over right now or if you want to wait, but um financing wise, so like we know what what's open for fix and flip. What does financing options look like for new builds? Like, is it that much different?
SPEAKER_00:So typically you try to not get financing for as long as possible because it is a long process, so paying hard money for a long time is not a good play. So, like right now, um, for this this lot, you know what? Son of a gun. You just thought of an idea. I just thought of something. Kyle is in fact loaning us 100% financing on Dorsey for a 0%.
SPEAKER_03:See? You're already on it, you've already done it. Look at that.
SPEAKER_00:God, he just yeah, I can't believe I just thought of that. So we are I did negotiate a one zero percent deal. Um, but yeah, so that in that case, he is um financing the uh how the lot, and then but he gave it to me, basically is giving it to me for a dollar. We're changing hands, and I have a promissory note with him, so then I can have first lien on the lot. And then um we paid the impact fees just out of pocket. Chase is a partner on that one. We just put in the money to pay the impact fees and the permit fees. Um, and then we're gonna pay to close on a hard money loan. But the hard money loan won't start until we get foundation in. So basically we're gonna be You'll only be holding found hard money for like four months if that's so once the foundation's in and inspected, then we'll get hard money involved. And the style hard money that we get, we only pay for what we've used so far. So we'll get a fifty thousand dollar draw for you know foundation, and then once we get framed up, we'll get another draw, but we'll only be paying on what we've borrowed. So we really just you really just have to eliminate as much interest as possible. Because some of this this thing's been going on for like it's gonna be probably 18 months of time since I started engaging on this slot to when it's gonna be completed.
SPEAKER_02:Yeah.
SPEAKER_00:Really, you know, when was when when when do you remember starting talking about this house? Like a long time ago.
SPEAKER_02:Beginning of the year.
SPEAKER_00:I mean, I had it listed for a while, like yeah, it's been it's been a while, and it's just now like at a point where we can build. So that's the bad part about I you know, we could talk about the good parts of all this stuff, but that's the bad part, is you do tie up money for a lot longer.
SPEAKER_03:So if you so you really do have to get creative on the financing side of the lot, yeah, because if not, I mean this would have bled you dry. 18 months of hard money.
SPEAKER_00:Like the other one that we're buying from him, he didn't want to do seller financing, so we're paying for the lot out of pocket and then gonna hold it while we get the permits. So that one will be you know, will be out of pocket probably 200,000 before we can get any money back. Um, because a lot of the the good hard money lenders that we know and we work with, they typically don't give us money until foundation is down. So that's that's the deal. Um, but yeah, it's just a longer game, and I think the risk involved in that is like if the market started to go with a flip, you can you know get out from under something in a couple months with this. If you're already tied into it 18 months and the market crashes, then you're kind of just like that's you're just stuck with it. Yeah, like you can't really control what the market's gonna do in two years.
SPEAKER_02:Yeah. I mean, I I think like you said though, like even most of these are would make good rentals.
SPEAKER_00:Um invest at your own risk, kind of thing. Because that that is a game that could, you know, a thing that could happen, very well happen. Um if the market, you know, was if you bought the lot at a value that you thought the market was at at one point, and then you know, the market changed, which it did for us, you know. Luckily we said it was it would be an okay rental, it wouldn't cash flow, and you're gonna have some money stuck in it probably at the end of the day. But I think um, yeah, just don't want to say all the you know everything is dandy and it's no risk. There's definitely some risk. Oh always um so yeah, that that's kind of been our stick with the new construction. It's also really finding like a developer, like what we have a relationship um with it's actually a whole family operation, but um Kyle, who's been selling us all the lots. So he's been finding them and developing them, meaning getting the grading permits, getting everything you know put into the county, um, getting approved building plans for the lot, and then he's just been passing them to us and making whatever, you know. Maybe he bought it for 40 and he's selling it to us for 80, and then we build it and sell it from there. So you have to have somebody like that on your team too, because that's hard.
SPEAKER_03:And that there's like Yeah, and he knows the process to get it ready to build.
SPEAKER_00:He knows the process, and that's another thing that he they only do one county. That's like when you when you do this and you're not like at a super scale doing it in one place, so you get to know the inspectors, you get to know the process. Like, I'm doing a project in Montgomery County right now, and it threw me for a loop with these inspections. Like, there was inspections that the they're the only county in the whole state of Maryland that have, and it cost it ended up costing me way more than I thought to get it remediated. And um yeah, so anyway, that um new construction stuff, stay local. If you're gonna learn it, learn it in one place before you go build it in a bunch of different counties. I think that's sound advice.
SPEAKER_02:Yeah, be ready for long conversion uh cash conversion cycles, yeah.
SPEAKER_00:Long cash conversion cycles for sure. Um oh, so we have our event that's going to be November 13th. Um 9515 Deerco Road, floor five. Uh, make sure that address is right. Um check it out. You came off confident with it though. 9515 Deerco Road and Timonium Um floor five. Thank you for that. That space was cool. It was Albers and Associates and Mid Atlantic Title. Mid Atlantic Title, owned by the same person, so it's it's one big company. But um, yeah, thank you to Ross and Mike and all those people over there for hosting. Um, that's a cool space for us. Um, it's good for them, it's good for us. Um, so we appreciate them hosting and and getting the food and taking care of all that stuff. So thank you to Mid-Atlantic and um uh Albers and Associates. And another thing I wanted to announce and plug for all the people that are local in Harford County um and up that way, the Mike Griffith is up for re-election and he's a friend of the show, and we wanna, you know, we're gonna go support on Tuesday. We're gonna go to he's having a fundraising event at a country club. Um, so I'm gonna go and donate some money and eat some food. So if you guys want to go next Tuesday, we can do that.
SPEAKER_01:Um but yeah, that's it. That's all I got. That's that's all I got to wrap.
SPEAKER_00:All right.
