Episode Transcript
[00:00:00] Speaker A: For me as an investor, my business model is I've raised private money, private capital from people in, in the neighborhood, community, friends, families, you know, friends, moms, things like that, right? Like we've just gathered a bunch of money and we go invest it, we pay our investors and I don't give myself enough credit to be like private equity guys, but I consider myself a true investor and speculator of the market because it's not my money. I got to make sure I get that money in, money out and I get paid. So I look at the market very differently than someone who flips houses as a hobby or even someone who's a realtor who only just facilit takes buying and selling transactions. I look at the market very differently.
[00:00:47] Speaker B: Hey everybody. Welcome back to another episode of Trust this, the podcast for real estate investors and other professionals and entrepreneurs who are looking for asset protection motivation in the state of Florida and nationwide. I am Joe Siegel, your asset protection lawyer here in Orlando, Florida, Florida, the host of Trust this and I'm here today with David Buckles, real estate investor, a market realist and a straight shooter. I'm really looking forward to today going through everything.
Let me just tell you a little bit about David. He's a full time real estate investor who's been in the trenches since 2019, been licensed since 2008, managing everything from acquisitions to full time full scale renovations, and he's now overseen his own growing portfolio.
He's known for his blunt takes on the housing market, real estate professionals and bold market predictions. David doesn't hold back and his followers love him for it. He brings refreshing honesty and hard earned insight to a space often clouded by hype. And we hear a lot of hype in real estate every day. I've been in it almost 30 years now. I definitely know that today his focus is on expanding his portfolio, analyzing market shifts and helping others like our audience, navigate real estate with clarity and confidence. You can catch him on Instagram, avidpoint Buckles. It's buckles like a belt buckle at David Buckles on Instagram or Reliant Home Offer. David, welcome to Trust this. How you doing today?
[00:02:12] Speaker A: Thank you, my man. Thank you very much. Happy to be here. I'm doing great. I always said I could complain, but I just sound ungrateful if I did.
[00:02:18] Speaker B: Oh, that's nice to hear.
This is going to be part of our master series today. So one of the things that we like to do with the master series, we talk to folks who have been in the business a while, who are entrepreneurial who. Who have some insights to give because we find that a lot of our audience, while they may be starting out or they may be long timers in the business, they can always learn from others how to do it better, how to be more efficient, and also just how to shift their mindset. Sometimes, you know, sometimes we get stuck and we need to talk about how we can shift our mindset. So one of the things I want to start with you today and kick it off with sort of a deep question here is what is something that most people think is important but can actually be skipped in this business? Getting where they are today, Man.
[00:03:06] Speaker A: I'd say checking all the boxes. You know, a lot of people want to, like, find that deal or something that just checks all the boxes. And the reality is I don't know if I've ever bought a deal that's checked every box. And if that's the case, I don't know if I'd ever. I'd ever bought a deal. And so I think everyone wants their ducks in a row and they want to get that feeling of warm and fuzzy inside before they make the jump. But from my experience, you just got to jump. That's probably my honest answer.
[00:03:33] Speaker B: Yeah, I hear you. I hear that a lot, too. From others. It's the ones who seem to be most successful are the ones you try to reduce the risk as much as you can, but at some point you got to pull the trigger. You just got to do it. And so many people get stuck in analysis paralysis that they just never do the deal. And you just got to go for it at some point.
[00:03:55] Speaker A: Yeah, absolutely.
[00:03:56] Speaker B: Tell me about your daily routine. We talk a lot about routines and how they help to always bring us back after a setback. We can always go back to our routine, and that just sort of helps us stand back up. I've written about how I think routine is the basis of grit for entrepreneurs and anybody else out there. And so I always ask, you know, what is part of your daily routine that you think makes some of the biggest difference in your life and your business?
[00:04:25] Speaker A: So I went on this personal development journey, gosh, probably like 2017 or so where I started. And I was like, okay, I need to be more disciplined and, you know, discipline. I had those crazy morning routines. I've been the guy at the gym at 4am and, you know, sometimes I still am in the garage at 4am throwing weights around. But that's just because, you know, we've got a new baby around the house. And, you know, quite honestly, My routine has just been completely out of whack since we've had kids. And that's been the most fun and challenging part of my journey because we actually shifted our business model when my daughter was born. So I saw the writing on the wall at the market and instead of flipping, we started holding and everything changed all at the same time. So I can't say that I've necessarily had a routine for the last year, two and a half years, but what I have is rituals. There's just certain things that I do every single day. If it's at, you know, 8:00 in the morning, 4:00 in the afternoon, or, you know, midnight, I'm just making sure I get some of those things done each day. And I'd honestly say, Joe, the biggest thing for me was I lost a lot of money in 2022 on. On two bad deals, when they weren't bad deals, but the rates went up, I couldn't sell them. It was like the flash crash, you know, from the, from the June to November standpoint. And I was like, man, I didn't see it coming. I was blindsided by the market and I literally vowed I would never be blindsided by the market again.
And so one of my rituals is, it's just like I'm looking at data every day. I'm looking at what happens in the economy every single day. Because there's so many things that affect our housing market, whether it's local or national, that if you're waiting on one data set to come out, you're probably going to be behind the curve. And so that's when, over the last few years, I've just become a student of the overall economy and watching it closely and not a doomer per se, but just watching the stuff in the background and maybe trying to speak up about it when I can. But I'd say data, just research, understanding what's going on in the world around us and how it affects us has really just, I mean, gosh, realtors didn't most, including myself, like up to a few years ago, just understanding what the mortgage rates are tied to and why. Like, I didn't realize that until I got wiped out by mortgage rates. I was like, what the heck just happened? This is how it works. Gotcha. And so, yeah, I hope that answers your question.
[00:06:42] Speaker B: No, it does, absolutely. And I'd like to go in a little bit in depth on that because I put out, you know, we have the Trust this newsletter that goes out every Friday morning at 8:15am and I'm always, that's one of the focuses I have as well as I'm trying to inform.
It's targeted at business owners and real estate professionals and I'm trying to get news out to them that I've seen from the week before that I know will affect their business. And I always try to break it down. This is how it's going to affect title agents, this is how it's going to affect insurance agents and real estate investors and real estate brokers and everybody in between.
And I try to break down each story that way. And then I usually have another 10, just links of stories that are important that week that people probably missed but are going to touch on their lives.
And having lived through at least three recessions and then of course the big one from 2007 to 2012 in Florida at least I learned. I'm sort of like you, you learn the hard way. It's like, oh, I should have seen this coming.
And I remember I had, I had clients come to me in 2022 and they kept buying the flippers, they kept buying. And I kept saying, guys, stop, just stop.
Because every price that you, your after repair value you're banking on right now is not going to work because interest rates are climbing so fast. You need to stop, let it settle and then come back in. So, and, and you're lucky you only had two. I had some clients 10 or more.
So what are some of the data sets you look at? Where do you go for that data? Where do you go for that news each day to try to keep up with what's going on?
[00:08:26] Speaker A: So after filtering through a bunch of it, a couple of the main publications that I'll revert to, that I'll usually share with my audience on social media are some of the ones that most people recognize. A lot of the Realtor Florida Realtors reports, I like to focus specifically on Florida. It's hard to argue with that data. It comes strictly from floridarealtors.org you know, because a lot of people all post to Zillow because there's a lot of data that posts the Zillow home index. There's some people that use nar, some people that use Fred and Fred, you know, the Fred data is nar and there's just a lot of people want to argue where to get the data from. And so I just try and keep it pretty simple. And I typically will look at Redfin, Zillow and Realtor just to look at the typical, hey, what are the headlines for our industry saying and then I have a segment for myself that I have every, you know, every time I do this, it's called Read between the Headlines. So every time I open up my phone, I said, all right, how are we going to read between the headlines today?
And so that's what I really started to do. And so I started looking at, gosh, this was two years or so ago. I looked at three main things and I actually made a video about it the other day. It's. I was always focused on price, but price is kind of a lagging indicator. Not necessarily, but when it comes to staying ahead of the market, you got to look at what's happening with the pendings and what's happening with the price reductions as well as the supply in the area. Not just in our state, but you can get a little more localized. And so that's what I did. I started doing it market specific for each and every one of my deals. And, and I'd go, okay, in the last seven days in this neighborhood, there were this many new listings, this many price reductions and the solds. I started tracking the sold, so then I'd find them in pending and go see what they sold for. And I was like, okay, 3% off list. Okay. You know, at list price, oh, 10% off. Okay. So you start seeing some of the numbers in the neighborhood. You're like, oh, okay. And the numbers always tell a story. So those are the things I looked at inventory days on market price reductions. And then that just begins to kind of just show, okay, this is the direction.
[00:10:25] Speaker B: You sound a lot like Logan Monteshami, the economist with housingwire.com well, him and.
[00:10:30] Speaker A: I couldn't disagree more.
Oh, really?
[00:10:34] Speaker B: It's funny because you both look at the same data and you disagree.
[00:10:37] Speaker A: Yeah, well, in his camp I'd be considered more of like a crash bro or a doomer. Because I believe right now in our market, not only here in Florida, but, but nationally, like we're approaching 2006 levels of supply regardless of the number of homes that are available for sale. How many buyers do we have for the pool of inventory that's there? It's not enough. And inventory keeps growing. I don't know how you argue with that, but some people want to. And so supply is approaching.06 levels. We have incredible numbers coming out with the FHA and student housing, student loan, excuse me, student loans and FHA and how this is going to affect housing. Like we have millions of people who just took multiple hundred point hits on their credit score that are no longer eligible for Home and auto loans.
So all this pent up seller supply that's going to be coming out so they don't miss the equity capture. There's not even enough. Even if there were buyers on the sidelines, some of them just got taken out. So I'm very passionate about what's like happening and how I feel like people are missing it. And that's why it's like I think Logan and I disagree a lot.
He's got a really big cheerleader here in town who really loves my content and tries to spin it in every which way that they can. But at the end of the day I'm reporting the news man, I'm reporting the data. And the data says we probably got a foreclosure battle on our hands from the date the rate crew over the last few years.
And then gosh, I mean if this is anything like 2006, foreclosures take about two years to complete.
We're going to be 2008, you know, that's 20, 27, you know, two years from now are we going to see our foreclosure win?
I think the party's just getting started here and the price action that we're getting ready to see and that's where we disagree the most. So sorry for my rant and tangent.
[00:12:24] Speaker B: No, I think I would agree with you. And this is one of the things I write about in my newsletter all the time. I write about that student loan issue. You know, under the last administration and cfpb they said, okay, you can no longer count medical debt in your credit report. Student loans, well we're put pushing those off, those aren't going to be counted on your credit report. And I've been reporting, hey, that's all gone in this, in the stroke of a pen and gone pretty much. It has been completely just destroyed over the past 130 days.
So and I, and I talk about this, I simply report what is happening, what I'm seeing and I get so many responses to those newsletters of well you just hate these, this administration. You just. And I'm going, look, I'm just simply reporting what's going on, trying to get you to see how this is going to affect credit reports.
And if people have bad credit, they can't get loans to buy your houses or to even rent from you because their credit scores are going to be tanked so they can't order it from you. And people just, I think people just get so into their silos they're like, well no, that's, that's not what I agree with politically. So I'm not going to listen to this data. And I think, and I, I try to take people's blinders off and say, look, there's data wide here. And you mentioned lagging indicators, leading indicators.
Please go into that because so many, especially economic data that comes out of the government is. It's lagging, right?
Explain what are some of the leading indicators that people could be watching to be to say, I see where this is heading now.
[00:14:01] Speaker A: Right. So in a couple different scenarios. Excuse me, I'll start by saying this. So for me, as an investor, my business model is I've raised private money, private capital from people in the neighborhood, community, friends, families, you know, friends, moms, things like that, right? Like we've just gathered a bunch of money and we go invest it, we pay our investors. And I don't give myself enough credit to be like private equity guys, but I consider myself a true investor and speculator of the market because it's not my money. I got to make sure I get that money in, money out, and I get paid. So I look at the market very differently than someone who flips houses as a hobby or even someone who's a realtor who only just facilitates buying and selling transactions. I look at the market very differently. So specifically for the sales price, again, I'll look at what the sold comps are and say, okay, cool, I got a good baseline if I can do this within the next 90 days. That's what I used to think because we didn't have crisis softening as hard as we did for the last few years. But then what it really comes down to as the inventory narrative changed, the main thing that I look for is the inventory surplus. It's like, okay, how much inventory do we have today compared to last year? Because if we've got 30% more, that means, you know, there's two more. You know, there's another listing down the street here, maybe two more listings down the street. And it's like, okay, so now the buyers have options.
So if I've got more inventory, and then I see, oh crap, days on market are going up, okay, so that means pricing is getting a little sketchy over here because they're sitting on the market a little longer. So then I'll go look at price reductions. And then it's like, okay, how significant are the price reductions and what were the days on market of those price reductions? Because now my listing has to come on the market ahead of those prices, not what the comps were 30 days ago, 60, 90 days ago.
And so specifically for just pricing my flips or trying to get in and out of a deal, I'd say those are the three leading indicators that you look for in price market indicators. Again, I Talked about the 10 year treasury and how that's tied to mortgage rates. 250 basis point spread is typically what the range Is of the 10 year treasury is at four and a half. You know, we can expect the seven and that's why everyone's talking about, you know, where it's been fluctuating at now to stay under seven. As if that's going to give any sort of bump to our housing market.
I mean it's been like this for three years. Like I'm so over hearing people say like oh, rates might drop and demand is going to come back in the spring. It's like it hasn't for two years, guys. Like we have so many more options. People are so tapped out and broke. Housing is so expensive and pricing has to change and as soon as it does, rates will follow and then sure, we'll get our uptick in sales.
Again, sorry for the long winded rant there, but I hope I answered the question.
[00:16:45] Speaker B: Well, no, it's great. And that's the thing. I mean like I said, I'm, I'm constantly, I feel like I'm screaming into the void when I'm saying the same thing to real estate professionals and investors saying guys, the data is not support. It's sort of like they're living in this, you know, hope and pray. But, and what I see, and I tell this to everybody I talk to, we're already seeing a lot of VA and FHA failures and, and then that's another one of those things. Read between the headlines. VA came out a couple weeks ago and said we're doing away with the, basically with the workout plan that we do with vets where we will take on the risk. It's either the vet catches up their payments or we foreclose. That's all we're going to do. We're not. And they've couch it in. Well, we're not going to put the taxpayers money at risk for these veterans homes. We'll just make them homeless instead of. But I, you know, I put that story out there to say you're going to see a lot more VA foreclosures. I put the story out there about the Arizona Attorney General going after law firms and title companies because people were buying VA and FHA properties subject to the FHA and VA rules. And she has gone after the title companies and the law firm saying, you're all committing fraud on the federal government by doing that. So it's every lawyer and title company I know in Florida at least stopped doing subject to on FHA and va. And I'm like, okay, well, that means their only option is they go bankrupt. I mean, they go bankrupt and it goes into foreclosure.
[00:18:19] Speaker A: But that's the problem because I got. And I'm going to piggyback, if you don't mind. I got two. I bought two sub twos. I was a part of the big sub two community. I bought two sub two deals back in 2023 and boy, they're the only two that I bought.
They weren't the smoothest type transactions. They made me super nervous the whole time we did them. We have great rates, great payments. One has equity, one doesn't.
They're good deals.
However, I had a conversation because again, getting into the market data, I had a conversation with another attorney and they were like, dude, don't ever buy another one again. Why? Because the people that you're saving their butts from are gonna go get. How much credit card debt do they have, how much other. They're going to go file for bankruptcy. And that asset, that house, and their name goes to federal court. You're screwed as the investor.
[00:19:06] Speaker B: Yeah.
[00:19:06] Speaker A: And so when I realized that I didn't have an out, I was like, oh, yeah, I'm, I'm done. I'm not playing this game. And luckily we've got private investors that if we ever got the note called, we could, we could cover it and figure it out. But, man, it just makes me so nervous. And yeah, I think we've got a, I think we got a lot, a lot of problems on our hands.
[00:19:23] Speaker B: Yeah. And then, of course, you know, I'm always putting up stories every time there's anything about insurance storms in Florida, taxes, real property taxes. I think there was a group yesterday, I read that they have downgraded every single market in Florida and Texas, at least to, from normal to slow, because of insurance and taxes. And then like you talked about just pure inventory on the market. It's really not looking good for these states.
And everybody's. I just hear so many people out there who are just cheerily going along, oh, it's going to be great. It's going to be fine. There's going to be so many deals. And I go, yeah, there'll be a lot of deals. Not yet. There's going to be deals of people going foreclosure also friends. I mean, it's always good to have a friend who is a lawyer who does foreclosures for Fannie Mae, Freddie Mac lenders, because they will tell you what it's looking like in their office as far as the number of files coming in. It's like, yeah, they're. They're definitely ticking up. And I got that report back in December that they're ticking up already to foreclose and start the foreclosure process. So those are leading indicators, I think, that a lot of people don't think about.
In addition to Housing Wire also, and Redfin, like you mentioned, I also look, I think it used to be called CoStar, but now it's Totality. And they have a lot of data. They're based out of Richmond, Virginia. They get a total ton of data out really fast. So I always look at those each week to see what's going on in the industry. But, yeah, if you're a real estate professional and you're not keeping up with not only lagging indicators, but leading indicators, then you're not serious about your business at all. So what is. What's something you think that you've done differently than your peers that got you some pushback, but you think it's paid off long term?
[00:21:14] Speaker A: Man, that's a good question. That's a good question. I remember back in 2021 when it was like, really hard to wholesale. You know, we were wholesaling a lot back then. We did a little wholesaling, but I mean, how do you get somebody to sell you their house for dirt cheap when they can go put on the market and get in a bidding war? It was really hard to do deals. And I feel like that made me really good at talking to sellers and negotiating and winning deals. But seeing the writing on the wall and then, you know, we had a partnership that we were in at the time, and exiting that partnership was because the vision didn't align. They wanted to keep doing the same thing. And I'm like, yo, now's the time to hold, not flip. Not like this season is over. There's seasons with everything, and we just have to accept which season we're in. And we couldn't, you know, come to agreement. And so I remember exiting that partnership ruffled a little bit of feathers because of the title company we worked with. We shared an office with the brokerage. My wife worked, you know, with us at the company. And so we took a good portion of the business with us.
And I Don't know what stories were told, but I just remember that it took me about a year or so of proving myself on my own and proving my concept before people were like, oh crap. And I feel like I'm in another similar season of that right now because I've been, I've been very vocal about what I thought about the people who've been screaming date to rate, you know, marry the house for the last two or three years. I feel so bad, like the more I talk about it, the more people send me information.
You know, a friend of mine messaged me other than was like, yo, this is my friend's neighbor. Like, I'm at my friend's house and this is his neighbor.
And it's sad because they did the whole day the rate thing and the house got more expensive each year instead of less expensive, if you will. Right? Because the, the rate by down and all the insurance and taxes, like it just got more expensive, not less expensive. And I read a crazy statistic that said it was last year or in 2023, 10 of FHA loans that were originated went 90 days or more like seriously delinquent within the first 12 months.
So it's like people were getting loans and just like immediately not paying for it just because of, for. I mean, we don't know what reason.
But I just, yeah, I just find it very.
I get a lot of pushback because it's their livelihoods. You know, you've got to convince these people to buy and sell houses or else you don't get paid. But there's, there's ethics behind it, right? There's. We got NAR lawsuits that sellers took a class action lawsuit against nar. Imagine the financial advice claims that people are going to be saying they got from realtors. And what accountability are they going to face for some of the bad advice?
[00:23:51] Speaker B: We were actually talking about that yesterday in our leadership ltn here in the office. We were like, okay, the economy over the next six months is probably going to take a downturn.
What do we need to be prepared for? And one of the things I remembered that well, actually Rick, our director of marketing, reminded me of that. I have said before, anytime there's a market downturn, there's suddenly lots of class action lawsuits. There are a lot of falls down the stairs in the house for the landlord, a lot of dog bites, a lot of holes in the yard that people break their ankle. Everybody starts coming out of the woodwork to sue. And I remember going through the last major, major recession. I would walk in the office every day for weeks on end. And there would be just these massive lawsuits in federal court, in state court, dropped on my desk where we, as trustee of trust that had sold properties, we're being sued as the trustee of the trust that sold the property for failure to disclose, failure to do this. They were suing the mortgage brokers, the realtors, the lenders, the title agent. They were suing everybody they possibly could because they'd gotten into a bad deal. And of course, they found an attorney who would take the case and say, sure, let's do it. Let's. Let's go sue everybody and see if you can keep this house and not have to pay back the mortgage.
And I see that as a leading indicator because I'm already starting to hear more and more cases. Another one is title claims. You'll start hearing title claims ticking up. That's a good leading indicator because that means that more and more people are going into foreclosure and they are discovering title problems that popped up that were not handled properly at the closing when they bought the property. And the lenders now, you know, making title claims to get those taken care of. You'll see those tick up. So those are all good leading indicators to let you know things are turning ugly. Another one, of course, is employment numbers. You know, this came out this week and they were abysmal compared to what they have been for the past four or five, five years. Just absolutely horrible. And ADP is a good one to look at before the Fed numbers come out, because ADP is like, hey, we're the payroll company for.
[00:26:10] Speaker A: That's. That's what, that's tomorrow, right? Coming out.
[00:26:13] Speaker B: Yeah, yeah, yeah. They do payroll for all these companies. So they know. It's like, yeah, this is, this is what our payrolls are looking like nationwide right now. So it's good, good leading indicators for you to be watching out for if you're a real estate investor when you started out and this is going back. But what are some struggles, what are that you've faced when you first jumped into this business that you think beginners need to be prepared for?
[00:26:38] Speaker A: So this is a twofold or threefold, depending on it, like depending on which avenue of real estate investing or owning, whatever, whatever decision you make.
The biggest lesson I learned in the fixing and flipping world is that you can't trust anybody. Trust but verify, right? Trust but verify. And you learn the hard way sometimes, and you trust more and then people take advantage of you and you just kind of have to expect that things are going to take longer, they're going to cost you more money, people are going to lie to you and you might have to pay for work twice. Like, it's just a part of the game.
As far as what I've learned being a landlord and just dealing with that is you hear all the headaches about being a landlord, but I really only about. I have problems with like 10% of the tenants that we have. It's not a lot, but of course, like, we all make the big stink about the big, the, the problem and make it bigger than it need to be.
Fortunately, as a landlord, I've had to be less emotional and, and more business because people will tell you every story under the sun to get your sympathy. But once they realize that you're not playing along, they're like, okay, this is what really happened. And it's like, okay, let's start with that next time because I'm a human too. You tell me you need more time, I'll give you more time, no problem. But you tell me your dog ate the $100 bill and now you're $100 short. It's like, where's my money, bro? You know?
So I mean, I'd say that for renting versus flipping, you know, landlord versus flipper.
[00:27:58] Speaker B: So basically plan for the worst, hope for the best, and trust but verify.
[00:28:05] Speaker A: That's right, that's right. And listen, systems, system are great. Like we've got an operational system on the back end, Turbo Tenant we use, it's a big property management app and systematizing that. Like we bought a mobile home park with people that have no business with technology, but we got them all transitioned over to the software. They pay their rent online and it's like, it's fantastic, you know, so systems have definitely helped for sure.
But yeah, trust but verify, that's a big one.
[00:28:33] Speaker B: Yeah, I think I hear that a lot from anyone who is scaling a holding operation. It's, it's. There are a lot of systems and you just have to have standards in place to, to handle all that. And it is a lot of technology as well. A big one too, I've been telling clients about a lot lately is if they have a lot of holdings or if they do property management especially, they definitely need to have tenant discrimination practices, liability insurance, because that's another one that we typically see tick up when the economy turns down as we see a lot of claims in courts against potential landlords and property management companies for discrimination in the rental process or even once they are a tenant, just how they were treated while they were renting. I've had a. I had a client that. He was almost sued in federal court because a plumber that sent. He sent over to put a new nozzle on a shower. The tenant said, oh, well, he sexually harassed me. And you sent him over as the plumber. You sent the landlord. You sent him over, and he sexually harassed me. So I'm gonna sue you for some sex discrimination. And he's like, what? And I said, you're a doctor. You have deep pockets. That's what they. They're coming after you. So these are the kinds of things that I'm always warning people about.
Man drew you into real estate in the first place. Why did you decide to get into real estate?
[00:30:01] Speaker A: So I got my license back in 2008, and worst time, right? Worst time to get my license, but.
So my dad was and still is licensed as a general contractor. Hasn't been an active gc.
He does the qualification for the company who does everything at Halloween horror nights every year. So he's got a cool story with his license that's being used right now. But, yeah, my dad was a GC for a long time. Growing up, I, you know, I was on job sites, cleaning up, you know, doing those things to help dad, you know, learning the business. I always thought I wanted to take over dad's business until he found this business partner who was a real estate broker. And on the way up of the bubble, they did a couple spec builds, they did a few investments, and they did one of the deals that I actually worked on. You know, I was outside scraping up rocks and sweeping the inside, and the bubble burst. And his partner and family actually ended up having to move into the house that they were building as a spec build.
And so this was happening when I was in high school. I graduated 2007.
I was watching all this unfold, and so I was like, well, wait a second. I don't want my dad's job. I think I want the broker's job because I want to. I want to do all that stuff, make all the money without the drama. Oh, we happen to live in town where some very successful developers are. And, you know, growing up, hey, that's so and so. That's so and so. And my dad worked with all of them, so he kind of groomed me almost to do that instead of construction. And I'm so grateful because now I kind of do it all right. I manage my own construction. We manage all the renovations that we handle. We have a little in house maintenance. Team. We've got systems in place that serve us and our portfolio. And it's great. Having this operation has really. I used to have a big team, like in 2020, we had a team of like 16 people. And it was a lot. And now I have a team of like four. And it's tight. We're close. We say what we think, we get the job done, we execute and we move on. And that's the best part. That's the best part of kind of what we do now. But I got groomed. I'd say, man, he showed me the way from, from high school and. And we just took the course and ran well.
[00:32:06] Speaker B: Speaking of operations, what are some of the biggest mistakes that you see others make out there when it comes to operations?
[00:32:12] Speaker A: Not having a deep enough bench. Like when you, when you own a bunch of stuff or we have a bunch of properties, flips or whatever you call your AC guy because it's summertime in Florida and you've got 20 or 30 properties, you hope he can get there in the next day or two. But like, it's summertime in Florida, the acs are gonna be. AC guys are gonna be busy. Like, you need a couple. Same thing with electricians. You know, you gotta find a couple good guys that you keep in rotation. You keep everybody honest. Hey, my buddy's paying me this. Why are you raising your prices on me? Okay, my bad. I'll do it. And it's just a way that you can kind of control your costs now. And that's as far as the operation side. The biggest thing I can say is controlling your cost. Like, be like becoming the middleman, AKA like going directly to the supplier, like we do for the cabinets and the floors. Like, we get the stuff that you pay five or six dollars a square foot for at Floor and Decor for like A$250 most.
And so we're able to do better products for cheaper prices. Accomplish the same look at a fraction of the cost as, as a regular flipper. And it's not anything special. It's just finding who the supplier is and going directly to them to place the order. It's very simple. Just, people just skip those steps. And doing those simple steps can increase your margin, your profitability.
Because when you have to do a house turn and it's going to cost X, y, Z dollars, you can do it retail from Home Depot up the street, or you can put the order in with your supplier and do it for a fraction of the cost with the guys that you have on payroll. And so it's like that's kind of what we evolved to.
[00:33:39] Speaker B: Well, when you're looking at a property, how do you have determined whether it's worth the trouble, that operational time sink that you're going to have there? What are some of the things that you look at when you're doing that?
[00:33:52] Speaker A: It's a great question. So the time value of money is one that I always harp on. It's like, okay, how much time is it going to cost? Take us to do the renovation, get it on the market and sell it. And if we're only going to make $50,000, flip, okay, 50,001 time is great, but then you take out all the taxes and whatnot, or we turn it into a co living house and we, you know, we make a couple thousand a month and maybe it takes us two years to make three years to make 50,000, but we keep holding it that, I mean, we just keep getting paid. So I, I try to look at the time value of money there. And then there's the wholesalers. Right. It's like I might wholesale a deal every now and then if my pipeline's too big. But also if I can make 50% of the wholesale fee or the flip fee as a wholesale fee, I'll take that money and run to the next deal very quickly.
So, I mean, a couple different exits. You know, we, we got, gosh, we got roped with three or four listings on the market. Now we're having trouble selling and we're, we're doing a seller finance wrap. We're, we're just going to sell our, finance these houses and you know, we'll be able to offer a little bit of a premium interest rate and a little bit of a down payment. We'll be able to recoup. But it's, it's just another new strategy that's not new at all. It's just another strategy we have to employ.
And it's four houses we didn't intend to hold, but now we're not going to lose money, break even or, or make 10 grand. You know, we didn't do all this work to make five bucks.
[00:35:15] Speaker B: Yeah, no, that's another, I think a leading indicator I've been seeing over the past month is solar financing has really taken off. Wraparound mortgages, solar financing and agreements for deed lease options. I've been seeing a lot of those as exit strategies for investors who have gotten stuck with properties they intended to up.
[00:35:36] Speaker A: Yep.
Agreement for deed is what we're going to be doing.
[00:35:39] Speaker B: Yeah, yeah. But one of the things I tell people, I go, look, you know, you, you do this, it doesn't, you can take that and sell that, that agreement for deed. You can sell that mortgage and note. A lot of people think, oh great, now I've got a mortgage for. And they'll work out these terms, you know, for a 30 year amortization, five year balloon. Thinking, oh great, I'm gonna be stuck with this for at least the next five years. I go, why are you, why do you feel like you have to be stuck with it? You could maybe sell that. There's, there are investors out there who'll buy your note and they'll take it as long as it's done right, which means you've had a lawyer drafted. But yeah, that's, that's a big thing. I think a lot of people, a lot of investors sort of get despair and don't know what they're going to do. But I go, I looked at one yesterday, they were doing a seller finance and if they hold it over the life of the loan, they're going to make half a million dollars in interest on it. And I'm like, yeah, you guys could sell this, it's no problem.
Yeah.
Wrapping up today. One of the questions we always ask, our mission, our vision is to help people aspire to a better life.
So the last question I always ask all the guests on the show are, is who has helped you aspire to a better life, man?
[00:36:54] Speaker A: Just one person.
[00:36:55] Speaker B: Yeah. I make it that difficult?
[00:36:57] Speaker A: Just one person.
[00:36:59] Speaker B: I'm sure there are many.
[00:37:00] Speaker A: Yeah. This is such a good question. And it's so loaded because, you know, the easy answer is my wife. Right? My wife and I got married 11 years ago. We just had our. Almost 12 years ago now. We had our first daughter after nine years of marriage. We had a lot of time together and we did that intentionally. And it's because I told her, like, hey, I want to work, I want to build, I have goals for us. But, but just trust me, just give me this time and we'll do it.
She has been my number one supporter, my biggest fan. And it's crazy because I didn't expect to get a little emotional. But like, most people don't have the support system that is required to get beat up like, like we do in this business. And I mean, you get beat up as a lawyer, my attorneys tell me all the time, I was like, dude, I'm just a punching bag. What, what do you need to throw some punches at me for today?
So having a support system is like a really big deal. I mean, from day one, when I told her what the plan was, she was like, all right, I'm down for the ride, let's go. And she stays at home with the kids. Like, she lets me do what I do. I mean, hands down, that's the answer I have to stick with.
[00:38:08] Speaker B: That's common. I hear that a lot from our guests. It is a supportive significant other. That's the big thing. You have to have someone who's supportive and not an anchor. Not a drag on you on that. So it's great to hear that. David, I want to thank you for coming on today. It's been really insightful. I think for our audience. We're going to put all the links for David's socials down below and also links about anything else that we talked about below like tenant discrimination, liability insurance brokers, things like that. And all the different data sources that we go to that we discussed today. We'll have all that down below. So please, please don't hesitate to click a link and learn more. And until next time, I just want to thank you guys for tuning in and Trust this.
Thanks for listening to this edition of Trust this. If you got something out of it, please press like and subscribe and give us a five star review to help us reach others who can benefit from this series. Until next time, keep aspiring to a better life.
