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
Please Stop Overpaying For Flips, Your Future Self Is Tired
Tired of watching cash flow slip through the cracks and flips turn into tuition? We dig into the operator’s playbook: how to stabilize rentals faster, build a right-sized property management team, and lean into new construction where execution is cleaner and margins are clearer.
Then we tackle the classic dilemma: build your own property management team or hire third-party? You’ll hear the real cost stack at 100+ doors, where the scaling ceiling hits, and how to split field work, admin, leasing, and maintenance coordination without burning out or overpaying.
If you’ve wondered why some buyers are still overpaying for as-is homes, we share actual offers, ARV guardrails, and the price of wishful thinking. We talk novation-style options, when flips still make sense, and why we’re passing on thin spreads that don’t pay for risk.
Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Galpis.
SPEAKER_01:Alright guys, welcome back to another episode of the Everyday Millionaire Show here doing another internal podcast catch up. I actually tried to get a last-minute guest today, but they couldn't come. We'll we'll dig into getting some more guests. I think we were having trouble just finding good guests. You know, I like doing them locally. Yeah, for sure. We need we need to start booking um more local guests and maybe we'll do a little bit of travel and try to get some cool guests like we did a couple years ago. Um but yeah, so for now we talk about uh what we're the three of us are doing. Um Chase and I are going in on some uh new construction stuff, so we'll touch on that today. Nick, what else what do you got going on?
SPEAKER_03:I am continuously stabilizing the portfolio, trying to you know put people in place to kind of um leverage my time more. And I feel like I'm doing that, it's just doing it you know a little bit slower than I'd like.
SPEAKER_01:When you say stabilizing, what what do you mean like specifically so people can understand?
SPEAKER_03:Stabilizing, just you know, as soon as a tenant moves out of a property, making sure that the contractor is there and getting a list of what needs to be done, or myself going there and getting that list for the contractor, making sure that it's ready to be uh turned over and then remarketing in that property immediately. That way we can get tenants in there instead of waiting. You know, there was times where houses would sit vacant after a turn or after a move out versus getting in there immediately and every day that goes by every week, every month, it was just you know losing a whole month uh mortgage payment that I still have to pay. Um, versus now I'm really trying to dial in on that and making sure that properties don't sit vacant uh as long as they used to.
SPEAKER_04:So you're not selling, you're just trying to get them rented.
SPEAKER_03:Yeah, trying to get them rented quicker, trying to get the system dialed in. Organize the property management exactly like a bit. And I don't want to I kind of want so I I met with Tom Cruise down in in Florida, the Section 8 guy, and um you know, because I really wanted to start venturing into other states, and he kind of like you know, heard what I had going on here in Baltimore, and he's like, Why don't you just stay there and just stick to what you know and what you're doing because you're you know growing a sizable portfolio there. I said, Yeah, you're right, I should just do that. I said, I do want to eject myself from the property management aspect of it. And he's like, just hire he's like, I would just go online and try to find like a college kid or someone who wants to maybe get into real estate, don't necessarily have to have any uh background in property management, that way that I can form them into the person that I want them to be. Um whereas if I hired like a property management company, they may already have their own ways.
SPEAKER_01:So what do you know what your gross monthly rent is off the top of your head?
SPEAKER_03:It's about 125.
SPEAKER_01:So essentially, if you a normal property manager would be 8%, it's about 10 grand a month that a property manager would would cost you. So you just have to find because it's not just one employee that you need to manage a hundred properties. Yeah, you need a couple of different people.
SPEAKER_03:Yeah, and where I lack is the in-the-field stuff. Like I really don't want to be out there on the streets all the time, like posting notices or just trying to hunt down tenants and checking on properties, doing walkthroughs. Like, I d I just really don't even have a desire to do that anymore. I don't want to do that. I just want to look on look on my phone. But if you found and just find deals.
SPEAKER_01:I mean, if you found somebody that didn't have property management experience, the learning curve that you're gonna have to like teach them and be with them, that's like you're talking about years of experience that you gained that you're just gonna pass on to somebody with zero experience. Like you're gonna need to train them for a long time.
SPEAKER_03:Yeah. I mean, I it's it's doable. I think it's doable, it's definitely doable.
SPEAKER_04:But I'm just saying, it's gonna take a while for sure. What about what about kind of poaching here? Um, but like what about taking somebody from or like hiring somebody that does have experience and maybe offering them salary, even if it's at like six grand a month, you're still saving four K and like your math there was 10K. That's just the percentage. That's not technicians or any maintenance work, right?
SPEAKER_03:So they would pay that either way. Yes, well no, but it'd be so you're saving sometimes tacked up or marked up. Right. You know, if I had a maintenance call and had a property manager doing it, it might mark it up.
SPEAKER_04:If you have a handyman for you know two or three K a month, you're still saving money in my eyes.
SPEAKER_01:Yeah, but you can't so I don't think you can count maintenance because either way you're gonna pay that. And typically, yeah, you might pay an extra ten percent on maintenance, but it's really like you're you can't do maintenance, leasing, uh admin all with one person. Like that's just for a hundred plus units, it's just not that's not a one-person job. Yeah. Like we have um at least four people and a VA, five people managing two hundred homes. So it's like five people to two, and you're over a hundred and with just you and lupe.
SPEAKER_03:Yeah. No, I agree. I mean, certainly half of that ten grand would be sixty grand a year, right? And that would be like four percent, which isn't bad at all. And I think hiring one person But if one person can manage the whole thing. Well, no, it's still keeping lupe, you know. Maybe that one person can run out in the field and post notices and and do the things like showing properties, uh meeting tenants to do walkthroughs, walking through properties that tenant moves out move move out of and such, and having her, you know, more so behind the computer.
SPEAKER_04:Yeah, I mean I probably have some people on my team that would help you out in a pinch like that. Yeah.
SPEAKER_01:So then but you still have to take you still have to pay her too.
SPEAKER_03:Yeah.
SPEAKER_01:So you're almost at a break-even is what I'm saying. You're almost damn near at a break-even if you had hired one other person or just pass it on to the property management.
SPEAKER_03:Oh, you mean in that sense, yeah. But then I have more of a grip on what's going on. I don't have to like micromanage another property management company, and I don't have to worry about how big they are and if they are managing my properties the way that I want it, want them to be managed.
SPEAKER_01:Yeah, no, it's it's definitely true. I just I've learned through building our property management company that that it's just such an economies of scale issue because once you get to like a certain amount of units, then you need another a whole nother person. But like if let's just say for every 100 units you need three people, if you get another 50 units, you really do need another person, but you can't like really afford it yet. Because you'd really need to get another hundred units to but fully you know onboard another full-time employee. So it's it's hard to grow the property manager company because you constantly hit these ceilings of like you're maxed out with labor.
SPEAKER_03:Yeah, like you're maxing out what they have there, but you don't have quite enough in the uh to to hire another one full-time.
SPEAKER_01:So from like a business owner's perspective, you're either looking at it like, shit, I'm way overstaffed, I'm paying more than I should be, or I'm understaffed, and my people hate me because they're so friggin' busy managing way too many units.
SPEAKER_03:Yeah, no, I remember we talked about this before, and I think someone else that maybe we had on as a guest mention it, like once you get up to like hundreds and then thousands, it's like there's a there's a number where you're like losing money until you get to another number and then you start making money again as a property management company.
SPEAKER_01:Yep. Yeah, it's a tough um it's a it's a tough business to grow because of that reason exactly.
SPEAKER_04:Sorry, I apologize. I had to take a call from the veterinarian, my dog is in the hospital right now.
SPEAKER_00:Not good. Not good. Praying for Noah.
SPEAKER_04:Um so going back, did did you guys come to a solution where it's like Yeah, he's gonna hire me, pay me 10%.
SPEAKER_01:Yeah. Why are you just selling the company? It's not a bad idea. You want another couple hundred units? I think it's just it's hard because you it's it's a different business too. Like you're just doing it for yourself. So it does take less time and effort for you to just do it for yourself because you don't have to process the owner payments and all that stuff that we have to do.
SPEAKER_03:Yeah, it's definitely a couple steps that I don't have to do because I'm doing it for myself versus like you mentioned if I was doing it for others.
SPEAKER_01:Yeah. And then for us, like it's kind of like being a realtor. You have that like fiduciary duty to somebody else. If you fuck it up, it's just your money. Yeah. If I fuck it up, it's somebody else's money. So that's it's a little bit more uh.
SPEAKER_03:Yeah, no, and I know it's gotta be challenging, like uh having a big property management company and just having several different owners, and those owners like hey, like hounding you and for properties being vacant and all this and that, and you got so much going on also, and it's just it's tough. And I know you always mention this, like it's the worst because like the owners are mad at you and the tenants are mad at you, so it's like everybody's always mad at you.
SPEAKER_01:You're just a big punching bag, basically. But you know, the the other side of the coin is like when you own a portfolio like we do, it's hard to pass that along to somebody else, and I didn't want to scale as fast as you scaled in the you know, owning of properties. I'm at a fraction of what you have. Um but I so it didn't make sense for me to just have hire people to manage my 24 units or whatever. We really needed to get other management contracts in order to actually, you know, have people be able to afford to pay people to manage our shit. Um so yeah, that that's a constant uh constant tr struggle and challenge is the property management business. But at the end of the day, we are like we've stopped scaling it to a point where we know that we can take on like probably another 10, 15, 20 units, maybe and then we'd have to choose to hire somebody. Yeah. Another person. Um and I I kind of keep a good pulse on that because the last thing I want is people like property management can be such a um a tough business to work for because of the negativity. Like there's always somebody yelling at you from either side of the, you know, either side, the owners or the tenants. Um, so I want to make sure that my people, my employees are happy. Because if they leave, then we're then we're screwed. We're in big, big trouble. Um all right. Uh what what do you want to talk about next? Oh, you want to talk about our deals that we're doing?
SPEAKER_04:Yeah, I mean, there's a ton, I think we're leaning into uh new builds pretty heavy, whether it's build to rent or you know, build to sell. Um just picked up a lot in Glen Burney. Um obviously we had the lot in Annapolis that we finally broke ground on, uh moved the pavement. We had a big sidewalk that we had to move. Um and then drywall drywall is going in this week. Yeah, this he's starting it this week, it'll be done next week. Sweet. So um that one's moving along. I think timeline for the Glen Burney lot we talked about was sometime September next year. Yeah, that's if everything goes online.
SPEAKER_01:That's the one thing it's hard to like with flips, you're like oh, three months or five months, then you know, whatever to sell. Um with new builds, it's it's a lot of like hurry up and wait. You know, you gotta submit the grading. I I mean I sent um Chase like a whole list of things that I was going over with the developer that I work with to buy some of these lots. Um, and there's just like step after step, and you know, one step might take three days for the county to answer, and then might take a week. And then you gotta wait, and then you gotta so it's very sequential. Um there's less like variables, I guess, is the good part about it. Like we have two, we're gonna build two identical houses. So we're gonna know exactly what lumber to order, we're gonna know exactly what fixtures to order. We're building the same exact house. Right next to each other. No, not next to each other. One's in Annapolis, one's in Glen Burney.
SPEAKER_03:That's what I was gonna ask. Do you look at the neighborhood and see how the houses are built before you build, decide what to build?
SPEAKER_04:I mean, I think that's the cool part about new construction, is a lot of it's just builder grade, right?
SPEAKER_01:But but a lot of it's too like we were talking about this the other day when we were sitting out in the conference room. It's like you have to build to the lot because every lot has its own setbacks. So, like if it's a 60-foot lot, you might only be able to build a 20 or 30 foot house. And then how deep it is, you might have to be 20 feet off the front, 20 feet off the back. There's all these different setbacks. So you basically find you have the lot, and then the county determines the box inside the lot that you could build on, and then you pick what size, you know, what box and stuff you want to build, essentially with the floor plan and all that stuff. But that's like the first part is figuring out how big can you build, and if it makes sense to build that big, like we're talking about um you know maxing out the square footage, but the comps are only like 2200, 2300 square feet. So that's what we're gonna build. We're gonna build close to what the comps are.
SPEAKER_04:One car, one or two car garage, like those those things matter for sure. The area definitely matters. Um, and and I don't want to say we don't like look at the finishes, you definitely do, right? And like, for example, the Annapolis lot, there's a big con, right? There's the the public park and right behind the house. So I think you have to make that house a little nicer to offset, just kind of like you do in the city in in certain areas. You have to make the house appealing enough for people to overlook some of the other cons. Um, and then in Glen Burney, there's new builds all around. So you're thinking about okay, well, this buyer could comparison shop, do they want a townhouse for this price, or would they take our single build with no HOA at this price? And then you're kind of looking at the monthly affordability too. So those are some things because new builders are offering like down the street American, I think it's Richmond American, is offering 3.99 rate locked for FHA and VA on a$600,000,$700,000 house.
SPEAKER_03:And that's because they're lending the money?
SPEAKER_04:Yeah, they well, they buy the money in bulk, and so they get a huge discount on the rate options and the terms. So they're I mean, it's a fixed rate, which is good. A lot of the build builders like Lenar down the street from me is offering a two, three, one, but that's an arm, it's a seven-year arm. So after seven years, it jumps. Yeah.
SPEAKER_01:Or goes down.
SPEAKER_04:Or it goes down, depending. Right. Yeah. Which it it's not that's not terrible financing. I mean, uh we've talked, I'm heavy on arms right now, and I've never been heavy on arms, but learning more about them and you know where the market is and the rates are going, I think arms make sense for a lot of people.
SPEAKER_03:I think like two years ago, it probably made the most sense when rates were like at the top at 80%.
SPEAKER_01:100%. I mean, I still think if you can save a point or three-quarters of a point by doing an arm, I think we'll s even if it's five years, I feel like you'll see enough cycle to you won't like lose too much, hopefully. You know, hopefully they don't jab to double the rates. But I feel like we're at a point where they're not hopefully going to put it up to 12% in five years. So like arms do now make sense. Where before I was totally against them when I could lock in 30-year mortgages, now it's like I don't even want a 30-year mortgage. Yeah, and I don't want a prepayment penalty either.
SPEAKER_03:Yeah. Well, it's like the prepayment penalties, it seems like they came out of the woodworks when interest rates started going up. I didn't really see too much of the prepayment penalties when interest rates were like four percent for like investor loans, DSCR loans. But then as soon as they started creeping up to six percent, it's like, let me lock you into that five-year prepayment penalty just in case that rate comes down. You can't refinance it out unless you're gonna pay me.
SPEAKER_01:That's the one thing I'd all I try to negotiate is the five years down to three years. Because five years is a long time to be locked into an eight percent rate. Yeah, for sure. Are we locked in five years on Benfield? Yeah. That sucks. That's okay. That's just what that was that was it was either that or the shit jumped, you know, like we yeah, it was six, one to half half dozen the other, whatever that's saying is, but yeah, we're we have a seven hundred and something thousand dollar loan on that duplex at like eight percent and five year prepayment penalty. But in five years, if we can lower it by two points, it's probably worth it.
SPEAKER_04:We'll be cash loan for sure.
SPEAKER_01:Yeah, right now it costs like thirty grand.
SPEAKER_03:Is it descending, like maybe year four? It's just one percent buyout of it.
SPEAKER_01:Yeah, it's four, yeah, it's a five, four, three, two, one.
SPEAKER_03:So even yeah, even in year four, it might, you know, it might be a good thing.
SPEAKER_01:Make sense to just pay the one percent, yeah. Right.
SPEAKER_03:Actually, well, yeah, that loan is kind of high, right?
SPEAKER_01:The one thing um to go back to the new builds, too, for anybody that's like trying to get into it, like flippers that are trying to get into it, the it is a um it's a lot more like dealing with the county, knowing the inspectors and how to get things kind of like pushed from one stage to another. Um, because you can spend and and then with that, because it takes so much longer, you have to get creative with the financing. You can't just pull, you know, a four hundred thousand dollar hard money loan to buy the lot. The lots that we're buying are like 75, 80 grand, 90 grand max. Um we really are trying to either sell or finance them or pay them in cash and wait to get our hard money loan until we're ready to actually build. So then we're not paying interest. You could be paying interest on something for six months before you can even put a shovel in the ground. Yeah.
SPEAKER_03:And aren't are there some companies that don't you don't have to pay interest until you start pulling the consumer?
SPEAKER_01:Well, that's yeah, that's how we do it. So, like Renovo is you don't pay until you use it. So, what we've been doing is either buying the lots in cash, what like we're doing with um the Cesalea one, most likely, buying it in cash, and then when it's ready for construction, bring in Renovo, give them first lien on the land, and then they'll start lending. So let's just say your foundation and site work is fifty thousand, you do that, and then they'll start drawing, you know, start to draw processes.
SPEAKER_03:That's not bad. That way you're not sitting on all of that interest payments. Right. And you don't you're not able to pay.
SPEAKER_01:Because it'll kill you. That's that's the one thing. Like the interest will kill you, the hard money. So make sure your hard money lenders are doing that. Like if they're not, if you're paying on the full amount, I feel like that's something of the past. A lot of people are getting hard money still and paying on the on the full amount, including the construction escrow. That's no longer a thing. But you're referring to just strictly new builds, right? No, I'm talking about every every hard money loan should be paid, you know, should be charged based on how much you owe at that time.
SPEAKER_03:Yeah.
SPEAKER_01:That's how it should be. Because if like the the lenders are essentially making money off that escrowed money. So no, I the two lenders that we've worked with recently, both Pimlico and Renovo, do it that way. I think Yavi does it that way as well. Yeah, I've I've never I've worked, I've done work for somebody that had them, but I didn't deal with them. But Renovo and Pimlico definitely only charge you from of what you pull.
SPEAKER_03:Yeah, that's that's pretty cool.
SPEAKER_01:So yeah.
SPEAKER_04:Uh I did have some questions I posted when I posted the the architect's drawing the other day. Um this one was um from Facebook. How do you find the land and navigate that process?
SPEAKER_01:So that's hard, and it's it's hard to explain. Um what I would my I guess answer to that is sometimes we don't. Like we've gotten a lot from developers. So like developers will find lots of land that can be subdivided and built on, built on, and they do everything side to side. They call it like side to side, right? So they're doing figuring out the land boundaries, getting the land prepped as far as survey boundary surveys and stuff like that go. And then the builder comes in and goes vertical up and down. So to truly find lots, there's a couple different strategies, I guess. You can do one strategy that we've taught some of your team is you find houses that have additional lots attached to it. And you can use our county has its own GIS map that's interactive that you can actually go and find and then see the lots. Um, there's certain neighborhoods that are better than others because they're subdivided better.
SPEAKER_04:Um and that's that's the key part too, right? Because like you might have a big lot attached to your house, but it's not subdivided from the house. Right. And so what we're talking about is these houses actually have like eight sub subdivided lots on them already, and that the one house sits on maybe four, and then there's four over here that are unused, untapped, and like you could buy that house effectively, renovate that house and sell the lot and do the developer. That's yeah, one strategy.
SPEAKER_01:So, and we're working with somebody, um, and he's been a great help to us, just like learning the county, because we've not really built too many in this county. Um, so Kyle Squires, he does he's an appraiser, so he's probably appraised some of your units. He's a he does a lot of appraisals, um, Chessie appraisals, Chessie Homes. He's been doing a lot of the development part and then passing us the lots when they're ready to build. Um, the one recently that we bought, I don't know, I guess they just emailed both of Chase and I, and uh we negotiated with this with this other guy, but that needs to be fully developed. So we need to get like grading permits, make sure that we have a lot survey, topographic map to figure out where the sewer pipe can run to get it connected to the public utilities. Um so there's a lot of steps in the beginning, but I will say once you once you get the beginning work done, the building of it's so much easier than renovation.
SPEAKER_03:It's just like cleaner, right?
SPEAKER_01:It's cleaner, the trades are all cheaper, everybody's cheaper because it's you're working with a clean slate. Um, there should be no like variables. Building from the time that you can like put the foundation down to to finish is way easier than like doing a full gut renovation in the city. It's a lot of different subcontractors and you know, just kind of organizing with people, but it's way, way easier. Floors are level, you know, everything's just right.
SPEAKER_03:When you do a new build, as far as like HVAC and plumbing, is that on a drawing, or do they come in and there together and say, look, I'm gonna run my stuff here? So basically the same thing as like a like a renovation.
SPEAKER_01:Good architects, even I've had great architects, they'd never put the HVAC ducts or where that's going. Um so typically it's something that we would design like on site after we frame it. Um if you pay for MEP plans, you can pay somebody to do it. But ultimately what we just for duct work and and stuff, we just do it when we have it framed. We do we do a trades walkthrough with all the trades. We tell them this is the you know, this is where the we've designated for the HVAC closet, whether it's in the basement, the attic, whatever. We were talking through this the other day, like where we're gonna put the HVAC unit. Um and we designate a closet for it based on where we think it should be in the house, close to the center of the house, and then we, you know, just like you would do in a full gut that you're adding ductwork to, just figuring out where the ductwork goes.
SPEAKER_03:Yeah.
SPEAKER_01:No, I just I asked that because like you know, there's always times where you run into issues with HVAC and plumbers, and sometimes they're not on the same page with where they're running other stuff, and I didn't know if like if if that was including in like a new build drawing or if you had to still go through that same potential still go through all that all those same kind of subcontractor headaches, but really it's gonna be great after we finish the first one completely because we're gonna probably use the same subs and the same everything. So they should all know by by the second one this is what this is what we're doing. Like that's why we were talking about changing the floor plan slightly to combinate this lot a little bit differently, but it just made a lot more sense just to redo what we just did, what we already done.
SPEAKER_03:That's what I do all the time with the townhouses, like middle group townhouses, the same layout consistently, so it's like the trades know exactly where everything has has to go, and it it's a lot easier to do the same thing that they just did versus trying to you know do something new.
SPEAKER_04:Yeah, that's something um I think is super important in business in general. Is again that goes back to like not investing out of state and like knowing your area, knowing exactly your prices and everything like that. Um, Brian Brian Belvidia, how do you say his last name? Valdivia. Valdivia. There you go.
SPEAKER_01:He is a sponsor of the next event, November 13th, Valvia.
SPEAKER_04:Um so I like he only buy, I don't know if he only buys in Dundalk, but a lot of his houses are in Dundalk, right? And like I think he knows his prices to the T, exactly what to pay, exactly there. So like I think that's really cool about the new construction, but also the process is fun. Um, it is obviously time consuming, takes forever. Yeah, um, so it teaches you some patience. Um, but it does it does seem like it's gonna be fun. We just got sent another lot in Glen Burney too.
SPEAKER_01:Um I saw that I didn't I didn't read the email yet from the same dude, right?
SPEAKER_04:Yeah, yeah.
SPEAKER_01:Pretty pretty interesting. That's a R5. So yeah, that's the other thing is know your zoning if you're doing this and you're looking at these houses. Um know what zoning means what. So in your county, um, figure out what R5 mean, what R1 means, what these different zoning things mean. So then when you're looking at the lots, you're not just calling your friend saying, Can we build on this? Can we build on? Because that's what that's what all my friends do. They just say, or anybody that's on the sales team or anything. There's sending us random lots. Can you build on this? And they'd there's this everything is public record. You can find it all out, you know, online, but figure out the zoning and what that zoning means before even planning to try to build anything.
SPEAKER_03:Yeah, I think for me, that would probably be what would be the most difficult aspect of new construction would be the back-end paperwork, like getting everything. Yeah, without a computer, it would be very hard. The counties and the cities and the different counties, like I know Baltimore City's permits office, like the back of my hand, but anywhere else it's like you know, I I wouldn't know where to start. I don't know how the process is versus what I already know with you know Baltimore City process as far as their permits.
SPEAKER_01:Yeah, yeah, and and that's another reason why I am now trying to focus mainly in An Rondo County with the builds with the construction company. Like we just retained, and we could talk about this too, a a marketing agency for the construction company. And we picked like four zip codes, five zip codes, maybe max. And it's like basically from like here down to Annapolis to like Millersville where I live, and that's it.
SPEAKER_00:Like you didn't choose Glen Burney. Sorry, Chase. That's crazy. We did not choose Glen Burney.
SPEAKER_01:No offense to anybody from Glen Burney, but we just we wanted to really niche down our offices here. Don't you live in Glen Burney?
SPEAKER_04:No, Nick.
SPEAKER_01:I don't live in Glen Burney.
SPEAKER_04:No, he lives in the red-headed stepchild of Savannah Parks.
SPEAKER_00:Yes. I live in Millersville, Savannah Park Schools.
SPEAKER_01:Um, yeah, so no, but we want to really, really focus in because like driving from place to place, like we're doing a job in Gathersburg right now. That's a pain in the ass to drive through. It's an hour plus each way. So my project manager who has to check in these higher end, especially like design build things, one of us higher level thinkers or higher level managers needs to be on site every single day. So if you're within 10 miles of every project, you can get to a lot more work than if you're 40, whatever Gathersburg, it's gotta be at least 45 something miles away. Um so yeah, it's I think niching down, like what I guess this all circles ties back to you knit like talking about niching down. Um I think niching down to a you know, style that you're building, style that you're investing, whatever, is the way. When you get too busy, you lack quality. That's what I've found.
SPEAKER_04:Or you have to spend hours on hours learning a new area, a new, you know, like this development stuff is gonna take me some time to learn, right? So like that's why I was just like, okay, if I if I start doing this new build stuff, we'll we'll just continue to do that, and then I'll just train my team to do that, and then we can really niche down on new builds and and helping those communities.
SPEAKER_01:Especially yeah, like in Anoronal County. You should you're you know, wherever you're because you're heavy in like Pigtown, you have some in Dundalk. I feel like trying like you trying to go buy something in Ohio or Florida would just be a huge time suck for you for something that like wouldn't really like how much more of a benefit is it gonna be to get something in Florida or something, you know. It just I I think it really niche, like they say the riches and niches. And I was always like the ADD shiny object syndrome guy that wanted to start this business, start this business, and I still get that way, but I feel like recently more recently, especially because I've spent an exorbitant amount of I've been spending an exorbitant amount of money on marketing and HR department and all these things. I just want to niche down and just do what we're doing really well.
SPEAKER_03:Yeah. No, that's the thing. I feel like a lot of just business in general, like you can't be doing ten different things, ten different businesses. You have to really narrow it down to what you really want to do.
SPEAKER_01:Yeah, we talked about that before this about somebody else that's on your team that's trying just trying to do too many things. I think you're always going to sacrifice if you try to do more than one or two things really well.
SPEAKER_04:I heard something today, I was actually listening to a YouTube video this morning. Um he said basically, if you're trying to speak to everybody, you're speaking to nobody. So speak to your target audience, right? Yeah, it was a it was a branding marketing video, but I'm I'm super big on that as well, and like hyper focusing on your target avatar, especially as an agent and a realtor, because that's the trap we fall into. A lot of times is like, oh well, I don't want to cut out the investor because I want to focus on waterfront properties now. Like, no, you can still do the investor stuff, but if your target audience is waterfront properties, well, you need to go show. That lifestyle to that target front audience, and you need to be in their sphere. If not, you're not gonna you're gonna try to speak to everybody, it's just you're not gonna get anywhere. So I think it is super important to to niche down. But I sent this to my team as well today, is like a lot of times we get distracted by those shiny objects, and you just sometimes have to sit back, you know, reflect on what you've been doing and and refocus.
SPEAKER_03:Yeah, yeah. At an earlier like earlier on for me, it was kind of like I was doing multiple things because I didn't know what I wanted to niche down on. So it's I guess in a way it's okay, but you don't want to do that for too long. You really want to narrow it down, like what am I best at? What I'm what am I passionate about doing, and just do that.
SPEAKER_01:Yeah, and picking, yeah, finding the thing that you're good at within your business and really just doing that, and hopefully your business in a place where you can afford to pay people to do the rest of the stuff. The stuff that you're not good at, you have to get you have to delegate it. You can't and you have to hire before you need, which is another problem. Like we were talking about this the other day. It's like scary to hire that next person, especially if you want somebody like higher level, because you all you see is like, oh, this person's gonna cost me a hundred thousand dollars a year. But if they can manage, like I was explaining this to Jet the other day, if you focus on all of the labor, like the people that are doing the painting, the framing, and all that stuff, they can only one painter can only paint one house at a time. He can't split himself into two, but one good project manager can manage five different paint crews at five different properties. So getting you know, finding those higher level people, hiring them before you need them, and building like a system around them, I think that's um a good place to be. Yeah, place to work towards.
SPEAKER_04:So um we did, I did submit a couple cash offers uh this week, lost out on some of those. Um, one in Arnold. We I think we offered like 255 on it. It was a three-bedroom, like kind of a Cape Cod style house. The ceilings, like you walked upstairs, you were hitting your head on the ceilings in there. So it's like it's a one bathroom, it's a very odd house. Um, full basement, had a big garage, two-car garage. Um, we submit an offer, I think 255, and then uh I gave them three options. So if you're an agent or um kind of an agent investor out there, this is kind of our pitch on our team is like, hey, we can give you three options. And so the three options was one, a cash offer to what we think we can list it as is, and then the third one is like we kind of partner with you, um, kind of the innovation style um approach. And so then we say, hey, we'll bring the construction, we'll bring the cost, we'll front that. This is gonna be your guaranteed price, and this is what you could expect a net, and you give them a net sheet. Um, so, anyways, to make a long story short on that one, apparently he got an offer at like 350. Um, they ended up listing it at like 375. Um, so it's just curious that I mean it's interesting to see what like people are paying and continue to in my eyes overpay.
SPEAKER_03:And that was an as is offer, 350.
SPEAKER_04:Uh yeah.
SPEAKER_03:You said you offered 255 and someone else offered 95,000 more. That's crazy.
SPEAKER_04:Yeah, and like I thought the ARV was around like maybe 499, maybe.
SPEAKER_03:You know, you also have to be careful with you know, when you see an offer like that, that may be a homeowner who wants to buy the house and live in it, so they're not really factoring in the investment uh aspect of it.
SPEAKER_01:Cash offer that you dragged me to the other day, that was the same situation. They were there that was a reverse mortgage where they owed$80,000 more than what my maximum bid was gonna be. Right. Just in the mortgage alone.
SPEAKER_04:Yeah, and I think that'll end up maybe being a short sale unless somebody that wants to live in there and go in and do work to it buys it. Um and we, you know, kind of told her, hey, you should probably look at you know putting it on market. And she was like, I don't want to put it on market just because of the the status of it. But you know, at the end of the day, like sometimes that's what you gotta do. Um, and it's just there's another one in Annapolis. Sean had um his I think his boss ended up buying it, but they're he was paying them like$550, and the ARV on it was like maybe$750, maybe. Um, and it was it needed at least$150 to$200k worth of work. Um, so it's just like it's crazy to see what people are still paying for some of these properties.
SPEAKER_01:That's one thing. Since we haven't really been flipping houses, I've been making you know, I've been making my money building and construction and stuff, so I don't really know what the flip is world is doing right now, but I gotta imagine that these flippers are losing money left and right on these deals.
SPEAKER_04:I have one right now that's losing eight probably$80,000 in Glen Bernie on a deal that she bought, and I'm actually going to show her a house down in Chevy Chase. Um purchase price is like$9.99. Uh she's gonna offer like$8.50 on it. Apparently, there's a builder that already has an offer on it with a seven-day feasibility. Down there is so weird because they'll buy these like decent houses that just need maybe$100,000 to$120,000 worth of work. They'll tear them down and just build new construction there and sell it for like$1.8,$2 mil. Um, so I don't know exactly where we're competing price-wise, but um, I'm about to go show her that house. And I'm just I have thinking in my head, like, and I told her this up. She's gonna flip it, she's gonna try to flip it. Um, and I told her up front, I was like, listen, the ARV is uh probably around like 1.3, and that's conservative, but you need to be conservative in this market. And she was like, Chase, we can't go any higher on the ARV. I was like, listen, I can go as high as you want. And this is where five million dollars. This is yeah, that's where people get in trouble, right? Like they're just like they just put a number because that they want to make the deal work. And you me and Nick talked about this before the podcast is you can't do that, you can't get emotional about the deal to where you're so sucked in that you're trying to make it work.
SPEAKER_03:Yeah, I mean, I would be scared if because that was her first deal, the$300,000 and she lost$80,000. And then going up to you know, three times that at a million dollar price point, that's yeah a little risky.
SPEAKER_04:Yeah, a lot, a lot risky, big risk, yeah. Yeah, a lot risky. But I mean people want to do it.
SPEAKER_01:Who am I to tell them? I would just love to see some just statistics on all these people. Like, I see people that are just getting into the rental game, and God bless them. Like, I'm glad people are still hustling, but like there I see people doing these full gut renovations for refi and rent, and I'm like, there's just no room. There just doesn't like there's no money to be made in a lot of these deals, and people are still buying them. And I I wonder if it's more to just keep their machine moving or because they think they're doing something and making some sort of headway. But for you to risk a couple hundred thousand dollars to make twenty on a flip or to make two hundred dollars a month gross cash flow, I just can't make those things make sense in my head.
SPEAKER_03:Yeah, no, it's certainly gotten difficult over the uh over the cut last couple of years with the higher interest rates and the market tightening up.
SPEAKER_01:Yeah.
SPEAKER_03:People who are flipping houses, houses are sitting longer. I mean, I'm flipping a flu uh a few right now, and I kind of transitioned into flipping a little bit more than I was buying and holding just because of the higher interest rates and the market and you know the price I was getting properties for. Um didn't make sense now to hold them as rentals because I wouldn't cash flow, but I would still be able to make a profit if I sold them.
SPEAKER_01:So and for you too, it's a little different because you control the contracting piece of it. You're the contractor, right? So I'm taught you know, the typical flipper might be working as a banker or whatever, a a realtor or something else, and they're not ma actively managing the crews of construction, so they're paying like an upcharge for somebody, a contractor, yeah, to to do it. Not this contractor. I'm not doing any more investor work. Yeah, and I've sworn off that.
SPEAKER_03:And not only that, they're paying for the contractor, the realtor fees. I mean, I still pay two and a half percent for a buyer, but I still have to. Builder's risk is expensive now. Yeah, that everything's expensive.
SPEAKER_01:So um before I forget, we did I did like kind of pitch it before, but we have our next meetup on November 13th at 6 to 9, 9515 Deerco Road in Timonium, hosted by Albers and Associates and Mid-Atlantic Title. Um, uh and of course the Everyday Millionaire Show. So um make sure that you guys are there. Sponsors, hit me up. I will we're still taking on more sponsors. Uh all free food, free drinks. What else we got? What what else people should know about it?
SPEAKER_03:Uh it's a great networking event. I think this time we're gonna do something a little bit different. I think we should, you know, when you get up there and talk on the microphone, I think we should have the room circulate a little bit because a lot of people have mentioned that they'll come and they're new to real estate and they feel like everyone's in their own group. So I think it'd be a great idea to kind of like, you know, get up there and say, hey, look, for the next five minutes, I want you guys to go around the room and meet someone that you don't know yet. That way the people there who are newer, they feel comfortable about coming and you know feel comfortable about coming to future events as well.
SPEAKER_01:Yeah, one thing I want to ask the venue too, and we'll I'll text Mike about this, is can we get speakers to like bounce to be in the back of the room too? So then everybody can kind of hear instead of just in the front. Um, but yeah, it's a great opportunity to come and network and um meet people in the industry. Um always we always have some great people that come out and support and sponsor. So so far, um, I will shout I'll just give a shout out to all the people that have sponsored so far. I don't want to forget anybody, but uh we have Studio A staging, they confirmed Beltway Lending, Current Cabinetry, Toss It, Mr. Perry, uh Diligent Windows, Albers and Associates and Mid Atlantic Title, obviously. Um, and graciously P home remodeling. Thank you, thank you. Um, but thank you for all those sponsors that have already oh, and keeping it clean cleaning is a new sponsor that we have. He's been to so many of our events and he always asks about sponsoring, and he finally sponsored. So thank you to um keeping it clean. Um all right, Nick, you have anything else before I know you have to get to pick up your daughter? No, I think that's it. Chase? I'm good. We're good. All right. Until next time, we promise we will be doing more content um coming up. I want to do some like more vlog and video stuff too, um, of the stuff that we're doing, stuff that we're building. So that's coming down the pipeline eventually. Cool. All right, guys, until next time.
