With a start in wholesaling houses 22 years ago, Robert has built a reputation for honesty and hard work, leading to a fulfilling career as a full-time real estate investor. As North Florida's go-to hard money lender, Robert's extensive market knowledge and decades of experience streamline the borrowing process. Join us as he shares insights and stories from his rewarding journey in the real estate industry. "You Find It, We Fund It!"
With a start in wholesaling houses 22 years ago, Robert has built a reputation for honesty and hard work, leading to a fulfilling career as a full-time real estate investor. As North Florida's go-to hard money lender, Robert's extensive market knowledge and decades of experience streamline the borrowing process. Join us as he shares insights and stories from his rewarding journey in the real estate industry. "You Find It, We Fund It!"
Welcome to the Real Estate Game Changers show. I'm your host, Mike McKay, based in the Jacksonville, Florida market. And each and every week we do this show with people who are changing the game of real estate all over the country. And for people who are in the Jacksonville market or thinking about getting into it, feel free to reach out to us. We're always happy to point you in the right direction. And we are still a very active buyer in the Jacksonville area and Northeast Florida area, especially of mobile homes on land. So if you have any deals, feel free to reach out to us. This week on the show we have another guy from Northeast Florida, Rob Shackelford. Welcome to the show.
Rob:Hey, thanks, Mike. It's my pleasure to be here.
Mike:Awesome. For the people who don't know you, could you tell us how you got started in the real estate business?
Rob:I was a senior in college down in St. Augustine going to Flagler and I was majoring in business. This was back, In the early 2000s. We still had newspapers. The classifieds were in the back of the newspaper. I just happened to open the newspaper one day and was looking at jobs in the professional management section of the classifieds and there was an ad that ran for one week. And I believe I caught it on day four or five. And it simply said investment consultant wanted no experience necessary. We'll train and gave a phone number. My first thought was it was related to stocks. I had some small investments at the time. I was like, great, they'll train me. Let's call and see what this is about. And it was a wholesale company that would be equivalent today to like net worth reality that was expanding out of Orlando into the Jacksonville market. And I got an interview. I got hired. My mom supported it. Just cause she's always supported me. My dad who lived in Atlanta, he was like, are you crazy? He started doing research. They actually had an office. Atlanta, so he drove by and, try to do some due diligence on him. And, he didn't think it was a good idea, especially leaving college. I was bored. I, I'm a smart guy. I was the type I didn't have to study and got straight A's, that type of guy. So I packed my stuff and I moved to Jacksonville. And unbeknownst to me, I moved into the hood off of St. Augustine Road. Because I knew nothing about Jacksonville and I started on November 26, 2001. So actually this past Sunday was my 22nd as a full time real estate investor. That's all I've ever done. And I started off wholesaling houses and I loved it. Like on the weekends, I would sit in my apartment and analyze deals. And I would actually answer the phone and, go show properties to investors. And, the market wasn't in late 2001, it was flat. I'm telling you before the show started, we would, put a contract on one of those big Victorian homes on post or college for 20 grand and try and assign it for 25. And we couldn't get rid of them sometimes, so it was flat and you just loved what I did. It became a passion, I watched the market go from flat started going up started going up and then oh six, you know It basically was where we were a year and a half ago and then BAM it just crashed and work through that but that's how I got into real estate. I answered an ad in the paper
Mike:Yeah, and that whole time leading up to the crash for you, wholesaling that whole time, or you had started building your rental portfolio before the crash.
Rob:so during that time, I worked for that company for I think two years and then went out on my own and I was wholesaling houses You know in Jacksonville started borrowing hard money from Jacksonville's leading hard money lender at the time. And, a few deals, I saw what he was doing. He was actually Jacksonville's largest buyer at the auction. Back when we had to go to the courthouse lobby to bid on the foreclosures and, I saw what he was doing and a couple of deals I found, I was like, wow, this, I think I might be able to flip this like he's doing. And I started borrowing hard money, remodeling the houses, putting them up and selling them. And they started selling and. It got easier and easier for people to get mortgages leading up to the recession. So it was like what it has been, over the last, what, five, seven years. And it wasn't hard to sell a house, you could do the basic remodel and the house would sell quick. I did not own rentals at that time. I was doing that and I was wholesaling and that gentleman and myself. He brought me into his flip business. He taught me title work. He taught me how to analyze houses without being able to get inside of them and be very accurate. on your renovation numbers. And, he sent me off and we were buying houses at the auction in Jacksonville, Clay County, a few in St. John's County. And the biggest thing that helped me get to where I am today is the fact that he taught me how to do title work. He taught me a lot, but the title work aspect of it, it was huge because, when you buy an auction, we were just talking about this, the funniest thing to me is when they bid up an HOA lien and think they scored a home run paying two 50 for a 800, 000 house. And then they realize there's something above them in the chain of title that is going to take them out And it's going to be a complete capital loss So you really have to know what you're doing. Are you buying a first mortgage? Are you buying a second mortgage? Are there liens and judgments? Are there back taxes? And there's a lot of different items that you have to really be aware of when you're bidding at the auction. He came up with an idea to buy existing judgments on apartment complexes, like a plumbing lien or a plumbing lien that hadn't been paid on a big apartment complex. That had already been turned into a judgment via lawsuit and you could actually use that to foreclose on The subject apartment complex and you had to do the research You had to figure out what's ahead of you in the chain of title make sure the numbers all work but we did that To an apartment complex on the south side of Jacksonville. And my job was to go into the office and it was probably like 60 percent occupied and, get the renovations going on the vacant units figure out what's going on, with the leases and the tenants and turn that property around to where we can fill it and sell it.
Mike:So no one outbid you at the auction then? Because you still have to bid, right?
Rob:We don't have to bid and yeah, nobody bid on it. So we took it back and then we went and instead of if you buy a house at the auction, you get the certificate of title and then you get the rent and you go kick the, either the tenant or the owner out while we went and kicked the management company out and then we battened down the hatches and got ready for the actual owner. To put his legal team on us, which they did and they got beat because everything was done properly and they were notified They were served and they didn't take care of it you know my take on that the money I made when we sold that Was right about the time the market crashed and there were houses on the north side of jacksonville for five ten grand And so I bought a couple of those and renovated them and started renting them and that I saw the potential and I'm not talking there was one or two, as the months went by, there were dozens and dozens. And I wouldn't be lying if I said hundreds of houses you could buy. For 10 grand or less that were decent. And so at that same time my dad was in Atlanta and he was a hard money lender and he had other contacts that were hard money lenders and with the market crash, they didn't want to loan money anymore, cause they were nervous and they didn't know what was going to happen. So he mentioned it to a couple of his friends and they came down and I took them on a tour And they liked what they saw so we formed some companies and we started buying as many rentals as we could using the formula we had created. And, that led to, the rental portfolio. And, so I found them, I did the title work, I bought them, managed the rehabs, filled them and, managed them after that.
Mike:You were saying before 1 thing you learn from the guy that you're working with at the auctions was how to analyze a house without getting inside it.
Rob:Yeah,
Mike:You want to share with the audience how you go about doing that to get it like an accurate rehab number without even getting it in the door.
Rob:The the crash and then the runup that's come since then. If you pulled up to a house and the. It had the electrical mass, then the power had been upgraded. A lot of homes back then had not had the power upgraded. They had hundred amp services. Some of them still had the round fuses that, I've seen over the years. So if the windows have been upgraded, what's the roof look like? And based on Those three items and a few more you could estimate that somebody had put some money into that property at some point So if somebody had taken the time to upgrade the electric replace the windows put a roof on it in the last five, 10 years, chances are the rest of the house had been remodeled as well. If you pull up to a house that the shingles are flipping up on, it's got the old original, crank out windows or, single pane that looked like they're from the seventies and it doesn't have the mass. You can probably figure that it's a entire, the bathrooms, the kitchen, you're going to have to do the electric, the roof, this and that, and the plumbing. There were little items like that, that he made a point to look for on every house. And that's what we did. We did it on a large scale, between in 2008, 2009, and the first nine months of 2010, when the world was crashing. And real estate was in the dumps. We fix and flip the 152 houses. So we were busy. There was one January I can remember, and I've been trying to think of the year. It was probably 2009. The first few days of January, the auction had moved from the courthouse to the online system that it's on now. And there were literally like 190 houses a day going to auction. So trying to do the title work and then comp those houses and keep up with it. There were days we were buying four or five, six houses day after day. And it, it was crazy. It's not every once in a while when I go like this, I'm looking up because my two screens I use are up here, but I'll go to the foreclosure site, real auction and I'll look at it and there'll be like. five auctions, or I'll check St. John's County and there'll be two auctions and both of them have canceled. It wasn't like that back in the day. There were 40, 50 houses going, day in, day out, if not more. So it it was fun. It was fast paced. It was exciting. And I really enjoyed it. The last 22 years, I can't believe I'm almost 50. I'm 47. And I started when I was 25. thE time has flown and I can't imagine doing anything other than what I've done. I would do a lot of things different knowing what I know today, it's been a blast.
Mike:What was it like to sell those properties after you rehabbed in 2000 8, 0 9, 10? The market was real slow. Was it tough to sell'em once you rehabbed
Rob:the way we did it was if the market was appreciating at the time, we would take the highest comp had sold and we jack it up five grand. And that would be our price. If the market was coming down, we'd take the lowest comp or the lowest house on that was active and we'd undercut it by five or 10 grand. And that's how we ran our numbers. And then we would be the best property on the market in that area for the cheapest price. So if you were looking for a loan or a house and you could get a loan you had no choice but to take our property because it was the best condition and it was the cheapest price. And you could buy houses like that back then. And the numbers would work.
Mike:iT, like investors would buy'em off you
Rob:Not investors, but retail buyers. We could buy the houses at a price point that we could fully remodel them and undercut the lowest active, and we would still make money.
Mike:right. And then with buying like that many houses like a week, or even a day sometimes. What kind of infrastructure did you have to put in place to handle. Like, all those renovations.
Rob:So when we were retailing houses, we had two full time crews and, every once in a while there'd be a third crew, but there were two main crews and they just went from house to house. And, we had the tradesmen, the roof, companies, the electrician, the plumbers, if we needed plumbers, things like that. But, we buy all our parts at either Home Depot or Lowe's we, back then it was, unless you were in Queens Harbor or like the woods, you weren't putting granite in. It was all for Micah countertops. We had a guy that would come in if it was a custom. Kitchen, he would take the countertops, take them somewhere and bring them back and they would, be re laminated and beautiful. It was little bit different back then when I started, man, I was pissed. I had to go to Home Depot. I didn't have any money. I had to buy map book that was that thick to learn how to get around Jacksonville because the iPhone didn't come out till 2007. So I had a map book and it was great. If you knew how to get to the place where the house was because you've got two pages and it's But if you didn't know how to get to those two pages, you had to go to C 27, and then the worst thing was, there if a page ripped out because you used it so much and you happen to lose it, then you didn't have that page to see it was just a different time.
Mike:Yeah, and then at what point did you kind of transition to keeping more rentals as opposed to flipping the houses?
Rob:I met my wife and our first date was November 1st, 2009. And. We got married in August of 2010. And the partnership with the flip guy ended in September of 2010. So it was about that time that, we had already started acquiring the rentals personally. We had already formed the first of the partnerships. But, there combined, there may be like 20, 20 properties in the portfolio. It was probably, September, October, 2010, when we just went full tilt and that was our main focus. I mean, I've got a four inch sign tattooed. That was my four inch line. I shellacked the north side of Jacksonville with that sign. That's how we marketed. And yeah, my sign actually made the channel four news as urban blight. There was a big kick in Jacksonville. I don't even remember what year it was, maybe like 2012 about urban blight and it was tires and it was the bandit signs. But what they were really mad about was, it was the politicians, man. Every time there was a race for whatever seat or, if it was national, local, state, every corner in, would be shellacked with the bandit signs. And I think that's what made them mad. But I turned on the news one morning, and I had this one particular place. On Macduff in between the interstate and Beaver Street, there's a set of train tracks, and the pony was on one side of the train tracks. On the other side was this little industrial building that was fenced in, and there was a telephone pole. But you couldn't stop, you had to pull into the industrial area and get out and walk to get to the telephone pole. I would test areas, because these signs cost money. If they got pulled quick, I would not put signs there. No one ever pulled the sign. It would stay there for months because the code enforcement guys were too lazy to go park and walk out to get it. And I turned on the news and the reporter, I see the pony in the background, I hear what they're talking about. I'm like, Oh my God, that's my telephone pole. And they panned down and she's using my sign as an example of urban blight across the road was a bunch of trash on the sidewalk and a tire. They didn't even bother to, over and show what the true urban blight was. That's how it was. It was, with the way they market and advertising for the rentals, it was all word of mouth or these signs. And we just built a reputation and people would refer family and friends. And there came a point that, I just quit putting signs out and it was all word of mouth or section eight. And we had a vacancy, by the time we had it turned, it was, there was somebody waiting to move in.
Mike:That brings up an interesting point. Like marketing was totally different. So like when you were wholesaling back in like the early two thousands, like how were people marketing to get deals? I'm sure there was no auto dialers around.
Rob:the company I worked for would mass mail absentee owners and, real estate was different. Before the crash, you had BPO agents, they called them BPO broker price opinion. They're the ones that the banks would send all their foreclosures to. And there was only a handful of them. So you went and made relationships so you could get houses that way. We, we had signs like I buy houses cash type signs and they actually work back then and there weren't 5, 000 of them on every telephone pole. But that was it, man. The letters the signs and the MLS and the BPO agents,
Mike:Yeah.
Rob:that's how we did it.
Mike:Did you stop wholesaling once you figured out the auction? Going after sellers directly, I should say.
Rob:Yeah, correct. We did not have a hard time getting houses, even off the MLS, there wasn't the competition that there is today. It wasn't cool to wholesale houses back in the early two thousands, the Carlton sheets trainings and books and seminars, that stuff was just coming on and I could always tell when he had held some kind of seminar locally. Because we would start getting a lot of new investors calling in trying to, buy houses and it was different. The MLS produced a lot of them, the auction, there were very few buyers. There was really four or five core buyers that were there all the time at the lobby. And then when it went online, that, if I remember the timing that was after the crash and that wiped, the crash wiped so many people out, man. I saw the biggest of the big go down and a lot of them never came back. And some of them went back. After a few years because they were really passionate about real estate, but they had to lick their wounds and recover. But, when the crash happened and all the investors were buying all the houses, they started putting time or time limits before investors could bid. It didn't used to be like that. The HUD. There was a HUD foreclosure list that we bought a lot of stuff off of. There was a VA foreclosure auction site, and you had to wait and I'm going from memory, but five days for an owner occupant, the bid. They never did because of the condition of the house. And then you could bid as an investor and on the actual true bank repos, investors could bid day one, now a lot of times there's, a 10 day wait period for homeowners or a 15 day. Period before investors can bid it. It wasn't like that.
Mike:Yeah. And then when you had your we're building the rental portfolio, you guys made the decision to manage it yourself. What made you guys decide to go that route versus some people, outsource their property management.
Rob:So I wasn't smart enough to Not take that upon myself. I thought it was my wife's passion And if I could go back and do one thing over I would I would insulate myself whether it was through a property management company or have You know, people that work for me in between me and the tenants and I had personal relationships with, at first 100 percent of my tenants and they were good personal relationships. I knew their kids. I knew their birthdays. They liked me when they needed help. They called me. They knew they could go to Mr Rob and he would help. I had a big heart. After being taken advantage of for a few years, I learned my lesson. I'm from a one stop light North Florida town, man, I am very loving and trusting. And that's how I showed up in the Jacksonville. I had no big city experience, big world experience. One stoplight town kind of guy and it took a lot of getting taken advantage of to learn But I just liked it man. It was very exciting the areas that we owned houses in were Exciting and there was always something crazy going on And I liked that up until the point that we had triplets, man. When I was 43 years old, 42, I was almost 43. My wife gave birth to a baby girl and two boys, are triplets are four and a half years old now. And life took on new meaning. As far as my safety now, he'll be 20 at the end of this month, a 20 year old son. And a 27 year old daughter, they're my wife's children and they're my kids. I have five kids, but shade was five when I met Salih and Island was 12. It was different because shade would ride with me. I wasn't worried about me. I wasn't worried about him, driving through the neighborhoods that we owned houses in. On the weekends, collecting rent, checking on jobs. It was fun. It was exciting. He loved it. Fast forward. I'm a lot older. I'm not as tough as I used to be. I'm a lot fatter and we have the babies. Maybe it's just the fact that having three kids at once sucked the life out of us. Didn't sleep for six and a half straight months and priorities changed. So if I could go back, I would definitely insulate myself or turn it over to management. And my perspective on everything changed when the kids came.
Mike:Yeah. Gotcha. And looking back or there, cause there's a lot of people who are to listen to the show who either they're newer to the business or like maybe they've already got a decently established business, but they're trying to grow like a, a pretty large portfolio. Are there any other lessons that you learned along the way that you're like could share with them that maybe you would have done a little bit differently on building that portfolio?
Rob:My business career changed when I was introduced to sophisticated gentlemen. Again, I'm from a one stop light town. I did not come into the real estate world having a whole lot of financial sense, and I just ran around doing what I love to do. And I made every mistake you could possibly make. fiNd a good mentor and I don't necessarily think you have to pay 15 or 20 grand to sign up for a mentorship program. There's really good ones out there. And if that's your cup of tea, then by all means do that. But I was blessed to meet Savvy businessmen who respected me for who I am and how I think and how I work, but then train me in the way that they think and they work. And that took me to the next level. So mentorship bounce things off of people be capitalized. If you don't have liquid cash, you're going to run into a whole lot of issues that you're not expecting. I see a lot of performance for rentals, especially in the areas that I used to own houses in. Don't take into account the true maintenance costs or the true turnover costs. People, they're not savvy enough sometimes to understand that, okay, I'm getting a mortgage on this and this is my payment today, but this has been owned by the same little old lady for 30 years and the taxable value is nothing. But guess what next year it's going to reset and you know that mortgage payment that's making 200 a month positive cash flow if you collect the rent and you don't have repairs and maintenance is now going to make 70 a month in positive cash flow if you don't have repairs and maintenance you know and if they pay the rent. I've seen a lot of people get in trouble that way over the years. And, property management, if it's not your thing, it is probably wise to turn it over to a professional company or a smaller company that specializes with investors because you can make some decisions that affect your income coming in and not realize at the time that you're making the wrong decision. So you don't know what you're doing, turn it over to somebody until you do. And it will also relieve a lot of headaches depending on what areas you own houses. And if you're in the Airbnb and you're good at, all the marketing online, by all means, do it. If that's your thing, if you're in the lower income areas and you're a timid person, And you think you're going to go collect a rent and deal with angry tenants. I don't advise it. And one thing I've seen a lot of too, man, and this is people think I'm crazy when I say this, but in the world, there's sheep, there's wolves. And I look at myself as a sheep dog. I'm in the middle, I'm keeping that wolf. Off of the sheep as much as I can, because I have seen so many new investors get devoured and being what I call one and done. And if you're a new investor and you lose big on the first time. Guess what? Your dreams are crushed and you're not coming back more than likely. So I try and in the lending business we offer our time to quote, mentor people for free. I don't care if you use my money, send me your deal. Let me look at it. I'll tell you what I see. If you don't agree with me, you tell me why you don't agree with me. And I'll tell you why I see it the way I do. And you can take my advice. I've got a lot of experience. And you'll probably be better off or you can move forward the way you were going to and you more likely you're going to have problems. I just don't like to see people lose money, especially if they're new. If you're in this game long enough, you're going to lose money. Every deal is not a winner. It, The shows on TV crack me up that they make it, every one of them is a disaster when you walk into it and, oh my gosh, what are we going to do? And, they go in there, they hit a couple of cabinets with some hammers and walk out and magically they made 250 grand. I've never. Work like that. It does every once in a while. Sometimes you score but for the most part, you know You're hitting base hits. You may hit some doubles every once in a while. You're gonna put one over the fence It's gonna be a home run but just single and double and you'll have a very prosperous life.
Mike:What's your advice to people who are fixing and flipping in this current market based on your experience?
Rob:Number one have liquid cash. Don't spend all your reserves. The biggest discussion I have with people when they call is I ask everybody give me your purchase price, give me your renovations and give me your after repaired value and I put that in my spreadsheet so I can see what they think it's worth and then I do my analysis and, A lot of times our numbers align. There's a lot of times our numbers don't align and I'll talk to them about it. I'll say, this is what I see. And they're like no, it's worth 400, 000. I'm like send me your comps and they'll send me their comps. And they have legitimately picked like the top three houses in the full mile diameter. And I'm like, all right, look, man, this is how I do it. I look in a, I go out a half a mile. That's it. I've got a platform I use. I go out a half a mile and I don't go past six months. And in that half a mile, I've got eight comparable sales in the last six months that are within 20 percent of the square footage, plus or minus the subject house. I said, how are you going to get the appraiser to look past that and see the house? That's 0. 97 miles away. That you're staking your claim on it. I was like, buddy, it doesn't work that way. And the other thing is appraisals are subjective. You can send five appraisers to the same house. You're going to get five different values. Be wise. Don't try and make a deal work based off of unrealistic comparable sales. Because another thing I do is I analyze your potential profit. If you're not going to make enough money. Why are we doing the deal? I'm not going to fund it. Why would you even want to buy it just to add, another notch to your belt buckle,
Mike:Yeah. That's a really good point. People trying to pick the comps, right? That make it work as opposed to just, you can pick the comps just in two minutes. Just look at the ones that make sense. If you have to look too hard, it doesn't work
Rob:it is. And again, the only time I'll go past a half a mile is if it is more of a rural area and I need to go out a little bit, but I'm never going past a mile. And if there are no comps, there are no comps, man. If I can't figure out what it's worth, I've been doing, I've looked at so many houses. My passions in life are building relationships and looking at houses. I get to do both of those in the lending business and I'm pretty good at both of them. So if I can't find comps, how the heck is an appraiser going to find comps?
Mike:when you were like building up the rental portfolio, I know you had to kind of partners for financing on the way in, but I don't like all these DSCR loan products, weren't they not really out yet until 20, what? 15 or
Rob:That's correct. The outside partners that I had my entry into those businesses was The work and the knowledge and they funded it. And then, my mentor was one of my dad's friends that came down and saw the opportunity after the market had crashed, I was actually, who Peggy Watron is. She used to own Century 21 Lighthouse Realty and I rented an office in Peggy's building off Bay Meadows and I can remember it. I was sitting at my desk in that building and I've been thinking, what do you want, man? You've got to start thinking about the future long term, we've got You just got married. Yeah, I've got a wife and two kids now and You've got to get serious about the future. So I was like, I want to have 50 free and clear rentals by the time I'm 50 I was 35 at the time and I made a phone call to my mentor and I was like look this is what I want to own 50 free and clear rentals by the time I'm 50. He's let me think about that and you know There may be some people that could get loans during this time. I wasn't one of those people. I could not go put debt on, the rental properties, especially in the areas they were in the banks. We're still in the process of losing big time in those neighborhoods. The foreclosures were just off the chart, so they weren't very willing to go back in there, so he made some calls and. It's going to sound crazy, man, but he put together a financing deal for me with private individuals. So everything I've done my entire career has been with private money. There are, again, there are a lot of people who were much wiser than me and had better contacts early on that could, had friends in the banking industry that could get lines of credit for him and this and that, that wasn't me. Everything I did was with private money, either hard money or private investor money. And he put together deals where I was paying 15 percent interest for a 15 year fully amateurized loan. So that sounds holy crap, how can you do that? That's impossible. You gotta remember, the houses that we were buying for 10 grand, we were putting 20 something in them, so I was in them for 30 grand, and It worked, the cash flow was positive. It was great. And then, I don't know how much you've been up on the North side, but there's a lot of two story concrete block duplexes. I Got on a kick to buy those and we bought a ton of them and those really worked because I was able to buy those for 30, 40 grand and I would be in them completely for 65, 70 grand. And the mortgages that I was getting cash flowed well. So that's how I put that on it.
Mike:Huh. That's really interesting. Yeah, I guess it makes sense when you're buying a house and you're all in it for, 35 grand, you can pay 15%. And what were you renting them for? 800 bucks? 900 at the time? Or was that kind of. Yeah. Yeah.
Rob:the houses were, we would get probably five 50, 600 bucks for a two one, 700 to seven 50 for a three one, four bedrooms would be like eight, eight 50. And of course those numbers rose a little bit over the years, but I was always the guy that kept the prices lower because I wanted to keep them full. And, I would also give people, I've always been good at reading people. Okay. So if we meet, I'm instantly reading you and I've, I'm pretty accurate on my assumptions, uh, or have been over the course of my career. So when I meet a potential tenant. I can read them pretty quick. I've had questions the way I would ask questions, I would get enough information without them really realizing that they were telling me stuff about where they had lived and this and that. And I could just go to a computer and do a search on them and see, they were in Miami. Okay, there's nothing on them in Dade County. There's nothing on them in Broward County or they're up in Tennessee. They lived in, outside Nashville in this little town called whatever. I would just go on the public records, start doing searches and I'd see eviction, and I'd stay away from them. buT there were certain cases where maybe they did have an eviction and, maybe they did have a legitimate reason. And I felt like they were telling the truth. I would give them an opportunity. All right. I was always that kind of landlord and it worked out the majority of the time. They were great tenants. They did have something that happened in life that would cause them to be denied, almost anywhere else. And they could come live in one of Mr. Rob's houses and. They'd be faithful tenants.
Mike:Yeah. And then for the people who don't know, how big did you end up building that portfolio in Jacksonville
Rob:There was that one point we had 200 properties.
Mike:and what made you decide to ultimately sell off that portfolio and get into the lending business full time?
Rob:So personally for me, things in the neighborhoods I owned houses in. Over the years, they were fine. They were okay. You knew what to expect. Things got violent and at first people appreciated, not that I have to be appreciated, but people appreciated what they got and they appreciated the help I would give them and they, there was respect, neutral respect. I respected them, they respected me. Something changed. I don't know, 2017, 2018, things just started going downhill a little bit more. And then comes COVID. And for me, I'm not going to get political on this, but the government stole my property rights. I could legitimately knock on a door and asked about late rent. I couldn't send a text saying, Hey, what about your rent? I couldn't make a phone call. If I did, I violated your care acts protection. So we didn't. And we just had to sit there and take it over and over again. We were very fortunate. We didn't suffer a ton of delinquency. During COVID and it took the government, I don't even remember the time period now, but it took them forever to get the landlord assistance programs up and going. And it's pretty funny, man. We sold the last two houses in late December, 2021. And I think it was earlier this year, I got an email. From one of those programs that I had filed in 2020 requests for assistance for a tenant and it was oh yeah, we just need to let you know that, this tenant does not meet the standard for the government assistance and, it took them like two years email to get to that folder, either they lost it. So the government stole my property rights. If they did it once and nobody did anything about it, they're going to do it again, or they could do it again. And, really for me, it was the 4th of July, 2021. My longtime maintenance man, nobody likes to answer the phone on holidays or the weekend. All right. I had go to people. I had a roof leak at a house. Off of McDuff. I lived out in High Springs. I had triplets. It was a Friday, I think it was a Friday afternoon or something like that. It was storming. There was a hellacious storm. It was the 4th of July. And I had a roof leak. I couldn't get anyone to answer the call. And the tenant said, called me back and said that some of the sheetrock had caved in. I was like, okay. I'm on my way. Hang tight. So I drive to Jacksonville. I hit Home Depot on Lane Avenue. I buy a tarp and some nails and I'm up on a roof in the rain on the 4th of July Getting soaked slipping off, cuz I'm standing on the tarp and Sliding firecrackers are going off gunshots are going off. I'm like man, I'm the boss I was like this just isn't working. And, it was just time. It was time to test the waters. We had tried a few times to sell the portfolio as a whole. There were a lot of interested parties nationwide that would come in and they loved the numbers. They would get to Jacksonville and it wasn't even the houses, it was the areas. And they were like, nah, we're not interested. So, we decided to, uh, just test the waters. You know, on September 2021, we listed 40. And like, 3 or 4 days later, all 40 of those were under contract. And I was like, Oh my God. So we released more. I didn't want to release them all and crash the market, so we just kept releasing them slowly and slowly. And, they were listed on September 5th and the last two closed on December 21st.
Mike:Jeez, wow,
Rob:It was a busy three months.
Mike:and those were all sold just, I guess they were tenant occupied. So other investors blocked them for the most part, or.
Rob:That's correct. Yep. They were all sold to investors. They were all tenant occupied and. I handled all the inspections and continued to run the company until the last two were gone. But, the largest company that bought a chunk was, it was probably 27 to 30 properties over the course of that time. They weren't all at one time. There was another group that probably bought like 15, but most of them were, single investors or, I'll take, three of the houses.
Mike:And then once you saw that off, did you already know you wanted to jump into the lending business or did you take some time, to figure out what was next?
Rob:As I was selling the properties and that was my only source of income, so now, I face, how am I going to pay the bills, I can burn the principal from the profit I made, or I can start putting it to work and before the crash,, there was a couple of hard money lenders in Jacksonville and, There were two really big ones and the leading provider of hard money at that time, I was the largest borrower they had ever had. And so I've been intimately exposed to the hard money lending business beforehand before the crash, I have borrowed a ton of hard money the businesses were, basically borrowing private money, everything I've done is private money. Instead of making payments, why don't I try to receive payments? And, I started lending to a local builder and a couple of investors. And that's what, it was fun. I enjoyed it. I still got to make relationships. I still got to look at houses. It wasn't on the scale that I wanted. And, I plan to just. coast through life like that, but I got bored and, about 18 months into it, I was like, I would like to lend on a larger level. And I didn't know anybody because most of the people that were around back before the crash got wiped out and didn't come back. And then I started buying the rentals. And again, I have a for rent sign tattooed on me. That was my life. I just went into the North side of Jacksonville. I was never out off of Kern anymore. I was never at the beach. I was never on the West side. I was in those neighborhoods, managing my houses and collecting rent and doing everything like that. And I just lost touch with everybody. So now I'm faced to grow a larger, hard money operation, and I don't know anybody. I got off Facebook in 2015 because I got tired of looking at the people I grew up with breakfast and kids and things like that was dumb. So now I've gone back on Facebook. And that's what I did, man. I went back on Facebook and I just went to the pages of the people I was lending to and started looking at all their friends and sending friend requests and meeting people that way and going to real estate meetings and people were like, who the hell are you? And I'm like who the hell are you? And we meet and talk and my knowledge gave me credibility. Like you may not know who I am, but once we start talking about real estate and the things I've done, I earned my spot at the table. The blip we had and the blip we're having, this is not, the crash was a crash, man. It was crazy and I lived through it and I prospered from it and it made me a better person and it brought me into contact with my mentor. It brought me into contact with another father, son team out of Jacksonville that are hugely successful in the real estate world and, getting exposure to how it should be done when nobody's ever given you that kind of guidance before was just major catalyst that launched me, into the future and, it started when we started building the rental portfolio. And I met the father son team probably like 2014. And it's been fun, man. I've done a lot of cool stuff that had I not answered the ad, had I not opened the paper in 2001 and answered an ad that ran for seven days. I would have missed out on a lot.
Mike:Yeah, So I guess after you do that for 18 months, that's when you officially decided to make the hard money lending like a bigger thing than just doing a couple of transactions here and there.
Rob:Definitely. I was like, this is what we need to do. This is how we're going to do it. Again, I'm pointing up. So I'm looking at my computer screen, but created my spreadsheet, started making the contacts and just went to work. And we have not slowed down. My wife and I brought Berkeley in, Berkeley Sadigursky. She's amazing. And she's a true blessing to our family and our business. And, the three of us just Rock and roll all day long. Like I told you earlier, I've got three or four loans to analyze when we get off of this. My phone rings nonstop to the point where sometimes I can't get anything done because I answer the phone. We do our own draw inspections. We were in Jacksonville today. I live out in Keystone, our office is in Melrose. So we've split the state in half. We do draw inspections on Thursdays for anything west of us. We do draw inspections on Fridays for anything east of us. And, we go see it in person. It's our money, not that I don't trust you, but if you're telling me you want 15 grand, I'm coming to look at it to see that there's, the one thing I noticed when I really started researching it is I saw how it was supposed to be done back in the day and how it was done. And the reason the hard money lenders went down back then is because they were leveraging bank lines and, putting in like 20 percent of their money into a loan and they were leveraging 80 percent of it. And when the market crashed, they couldn't pay back the loans. The banks took them down. But the way they did it back then, the policies and the procedures in person inspections, I'm not giving you money at closing. We're going to be pretty conservative on values and LTVs and things like that. I've seen the biggest of the big go down. I don't want to go down. So we're conservative yet.We're fair. I was a borrower. And so I tailored our lending program, with the borrowers on mine, we have a loan special for wholesalers. Let's, how many deals do wholesalers get to the finish line only to have the buyer bail at the last minute, or they've got a great deal that they can't find a buyer for, but they don't want to burn their name and they don't want to lose the. Profit potential, I'm not taking two or three points from you. We've got a loan tailored just for you. That's going to keep most of the profit in your pocket and give you the time to find the buyer and close the deal. The fix and flips, we've got a six month loan. We've got a nine month loan. Because either it could be a big job, and you may not be able to get it purchased, remodeled and closed in six months. And instead of paying extension fees, take the nine month loan, give you a couple extra months and it costs you less money than not paying it off in six months and paying the extension fees. We just tailor it and I'm fair on my numbers. And, again, there's some renovation escrow included in some of our loans that are, over a hundred thousand, if you buy it I can give you, a hundred percent of the renovations, as long as the numbers stay, below 65 percent LTV,
Mike:Yeah, and when you and I first met was something that I thought was pretty unique that you guys did, especially considering the, frankly, how difficult it's gotten to get insurance on certain fixed and flip properties in Northeast Florida. You guys actually have a master insurance policy that borrowers can hop on. Maybe if you would wanna talk more about that.'cause I think you're the first person that I've ever really heard that from.
Rob:Definitely. So one of the big risks. That I see for you as the real estate investor and for myself as a lender, truly the only way I have a complete capital loss is if you don't have insurance and a house burns down or blows down, okay? One of the things we get daily in the mail are notices from insurance companies about, if the investor or the borrower sets up Their payments on a quarterly payment cycle. I'm getting notices before your quarterly payments even do that. Your insurance is canceled Like on this date, which is after your payments do so they're going ahead and preemptively striking and just in case you don't make the payment You know there would be a chance that a borrower would drop his insurance And it would take Two, three, four weeks for me to get notified and God forbid it burns down. Or, we live in Florida, if it's during a certain time of year, there could be a hurricane. So with that in mind, I was like damn, man, we need to figure out the insurance thing. Whitney, I saw her at, actually it was a yellow bird meet and greet. And I started pitching to her. I was like, look, this is what I want. Can you do this? And she's they haven't done it. I haven't been able to get one done for 18 months. And I was like, okay, but she's possibly with your background, that might be something that they would consider. And lo and behold, she busted her butt, got it done. And we have our master insurance policy. So if you borrow money from us, you have the option. I don't make you do it, but you have the option to come onto our policy. I'm the insured and you're listed as an additional insured. And our policies, full replacement costs. It also comes with a million dollars in liability. Now, the problem in the insurance market right now for investors is there's junk, which is actual cash value policies, which is what everyone's trying to get because they're cheaper. And then there's full replacement costs. Nobody has had to file a claim on this actual cash value policy yet, but when you do, you're going to be shocked. You may have 200, 000 in property coverage, but they're going to depreciate every feature on that house. And your payoff may be, let's just pick a number 120. If you owe me 200 and you got 120, we have a problem, right? Okay. And it's not just that if the borrower drops the insurance. It's what's about to happen in the Florida insurance market. Ian's damage hasn't even been factored into the rates yet. So at some point, six months, 12 months, that's going to be factored into the rates are crazy as we stand. Insurance companies are pulling out left and right, or would they rather insure a primary residence, or would they rather insure a flippers vacant house? At some point, you're going to have problems, or it's not going to be cost effective for you to get insurance. Guess what? You can come on our policy, if you're borrowing money from us. And we will fully insure it for at minimum the amount of our loan. And, normally I try and talk them into more because they need to cover any out of pocket expenses so that they get reimbursed if God forbid something happens. Right now it's a slightly more expensive on houses. Then those actual cash value policies, mobile homes, we smoke anything you can get in the mobile home market. But there's a day coming and it's going to come soon. I'd say six to 12 months where our policy will be to the actual cash value. And you're getting full replacement costs and you don't have to worry about it getting canceled. I cancel it. When you pay me off, I cancel it. We pull a full year's premium on the HUD. If you own the house and for four months and two days and you pay me off, I cancel it that day. And as soon as I get the next monthly bill to make sure I'm giving you back exactly the right amount of money. You get the money sent back to you aCH. So it comes out on the HUD and your money out of pocket looks more higher than what it actually is because you're getting some of it back. It's a 12 month policy.
Mike:Yeah, you make a good point. I think it's a great thing. We did, a loan recently into a mobile home and I've had so much trouble getting any decent policy for a mobile home. I can't even get a policy on my own for it. That's got over a hundred grand in coverage. And some of these, as are 250, 270, a hundred grand ain't going to cut it if, place burns down. And I'm into it for 200.
Rob:you're not going to be able to get alone because if you're wanting 150, 000 loan for me and you can only get 100, 000 in coverage, that's not going to work.
Mike:Yep. Yeah. You want to talk a little bit about you mentioned it briefly earlier, but how you came up with the name the lending company.
Rob:I sure will. So, my wife and I, and my soon to be 20 year old son, when he was about 11, I wanted to teach him about business. My last name Shackleford and their last name was Shackleford. So we created a company called three shacks and little did we know. That three years, four years later, we were actually going to be blessed with triplets. All right. We have Bowen. They were born in 2019. They're four and a half years old and they're amazing. They're crazy. And that started in 2019 and has gotten progressively worse. So when we were going to start the lending business, we were thinking of names. And I'm like, why don't we just call it Three Shacks Capital Partners? Because we are legitimately Three Shacks. It started off, me, Shade, and Salee. And God blessed us with Bellamy, Beckett, and Bowen. The lending business was named Three Shacks Capital Partners because we legitimately have Three Shacks running around the house right now.
Mike:Cool. We're getting close to the end here and there's always two questions I ask at the end. And the first one is what is the craziest or most uncomfortable situation that you have ever experienced in a real estate deal?
Rob:I Have three. One relates to an auction house we bought on the South side of Jacksonville. The craziest situation I've experienced in the fix and flip world is, analyze it from the outside. This house is perfect. Unfortunately, it's occupied. All the blinds are shut. And we win the bid. We think we've scored a home run with what we've paid for it. And, we get the certificate of title 10, we get the writ of possession. Sheriff shows up, we draw the locks. My partner at the time was like six, two or six, three. And we opened the door. And when I say he couldn't stand up straight in the house. anywhere in the house. He could not stand up straight in the house. So it is piled from it's probably three feet of trash as soon as you enter, the main entrance and it gets worse. The further you go into the living room, you hang a left, go down the hallway. And the worst part was, man, it was, and I'm laughing about it. I'm laughing because it's sad, but 50 grand on the deal. It there was an old lady that I don't know what the circumstances were, but obviously she was a hoarder and of the worst kind when you got to her master bedroom and there was a bed, it was basically buried under trash, but she wore adult diapers and she off of next to her bed was a little vanity and then a closet, a big walk in closet and a master bathroom. She had filled both of those. The closet and the bathroom from floor to ceiling with diapers. When it got filled up on the, on that side of the bed, you did get some energy cause she had to stand up to start tossing them across the hall into that, the hall bath across from her bedroom door. And that was filled from floor to ceiling. On top of that, there was six dead cats under her bed. And it, I've been in a lot of nasty houses, like 100%, just disgusting. Every inch of sheet rock came out of this house. We had to have it treated, 10 times with special enzymes and stuff to kill the bacteria. And you know what? We put it back together and we sold it and we lost 50 grand. And that can happen to anybody. Don't think that it's all rainbows and butterflies because it's not. You, if you do it long enough, you run into that. I've got a thousand stories from the rental days. I've got two that stand out, one. The section eight started offering homeless vets, disabled, homeless vets, section eight vouchers. And I thought it would be great to fill up the apartment type buildings that we had. And I had a duplex, which was a three, two house with a garage apartment off of McDuff. And I let this guy, Julius move in. Julius checked out, but Julius definitely had some issues. And I got a call one day that Julius he's man, I need a refrigerator and a stove. And I'm like, all right what happened? They quit working? He's no, I sold them. And I'm like, you sold my appliances? And he's yeah, I sold your appliances. So I drove over to see him, and as we're talking, I'm in my truck, window down, Julius is at my window. He's man, I let Black move in. And I'm like, Black? He's and I knew who Black was. Black was the kingpin drug dealer of that area, okay? That's a big problem for me. Now I've got Julius selling my stuff, I've got the kingpin drug dealer living in my place. And on top of that, Julius is it's Black and his girlfriend. And I'm like Man who's his girlfriend? And as I said that now I've been in this area for 15 years and there was one prostitute that had been around for about seven of those 15 years. And as I asked them, who's his girlfriend, I looked ahead of me and. Here she came about five blocks down the road turning walking towards us. And I'm like, oh dear god Please don't and as I saw her I saw Julius look and see her and he's there she is right there And I'm like, so now I've got my stuff being stolen. I've got the drug dealer I've got a hooker living in there and the next call I get from Julius is that he's let people move in and They won't move out. I'm like, alright, this is it. So I get his caseworkers involved And, we go over there and open the door and there's a dude sleeping on the couch and he pops up immediately I draw a gun on him. And as I'm keeping an eye on him, I see a door shut real soft. And I go back to that door because another guy that was with me took care of the guy on the couch. And I'm like, just come out. Come out because I don't know what you're doing in there. And nobody came out so I kicked the door. So it swung open, and as I did, I saw this dude jump in the closet. All over the floor were knives. And I'm like, look man, you're going to come out now, because I don't know what you're doing in there. And I legitimately, it's the closest I've ever come to having to, use violence on somebody, because I felt threatened. And he finally popped out and when the cops showed up, they went in that closet and there was a nine millimeter fully loaded and the one in the chambers that he had sat down. So when he hopped out off the floor, he had hopped in the closet with a gun that was fully loaded. So Julius stands out and I don't have time for one more. So I did not, I used, like I said, I had personal relationships with everyone. I used to like to go get the rent because if I didn't go get the rent. There was a good chance that they were going to spend it, especially on a Friday. They've got the weekend coming. I would go pick up rent on Friday afternoons, and I had a house in Paxson, and I had a tenant, had lived at another one of my properties with her husband, they got divorced, so she moved into this property. Unbeknownst to me ex boyfriend, or baby daddy, something, had gotten out of prison, and moved in with her, or come back into town, and he was troubled. So she had called me and said, Hey, Mr. Rob, come at six o'clock on Friday. So I, made my route to where I would time it with the other pickups to hit packs and grab her rent and go home and see Slee and the kids and about 5 45, 5 50, I'm almost there. I get a text. Oh, Hey, something's come up. Can you just come first thing in the morning? And I was like, okay, no worries. I'm a little bit pissed because I, spent some time waiting to get there at six. So I show up next morning and there's a police car backed into the driveway and there's, the yellow tape all around my house. And my first thought is I saw that from, when I turned on the road was. Man, she burned my house down. Why else would a cop be there? And as I got closer, the house was still there. It didn't look like it had been burned down. So I parked and hopped out and went and talked to the officer. I'm like, what happened? Why are you here? And he's Oh somebody died inside last night. I'm like, really? What happened? He's I don't know exactly, the story ended up being that, the boyfriend, baby daddy, whatever had come out of prison. His brother was with him. They had gotten with Sherry. They were all smoking crack. They got really high. And they went and robbed the Golden Crab Shack on Edgewood. And it wasn't the first time. These guys aren't geniuses. They had just robbed it two weeks earlier. So when they came back this Friday night, the owners We're ready for him and they were armed and they got in a gunfight inside the Golden Crab Shack and the brother got shot in the chest. So One of them, he got drug out thrown in the backseat of the car and I'm assuming Sherry was driving but she took off and pulled in behind my house and parked the car and they drug him inside and he died in The dining room. So I go inside, man. They've got the outline and there's, you can tell the EMTs have been there and put the sticky things on his chest cause the backing for those were still on the floor and there was blood. But had she not called me off, I always had, way too much cash from collecting the rent on a Friday night with me, not foreshadowing, but there's a really good chance that I may have been the victim instead of, the brother taken that night. So yeah, it's just, it's, There's a hundred stories like that, and sometimes they pop into my head and I'm like, man, I can't believe that I've lived through that. And the North side was the wild West back in the day. Every during, after the crash, man, every house, half the houses were boarded up and vacant and foreclosed on and the drug dealers owned everything, man, they just sold dope and stole stuff. It's just a crazy world. I'm glad I got to experience it, but I'm glad to be on the other side of it now. And, the only rules in my lending business. And this is just a personal thing. I think there's a ton of money to be made in those areas, but it's just not for me anymore. I don't loan money where I used to own homes so there's a couple zip codes and It's across the board That I don't loan money in because I set the rule that if I owned houses in that zip code, I don't lend there
Mike:Fair enough. I didn't even know that actually.
Rob:yoU don't buy in those zip codes. So I haven't had to tell you
Mike:Oh I do actually,
Rob:There you go.
Mike:But more so Middleburg now. I got a couple of rentals over there in those areas. Cool. The second question I always like to ask, and that's for the newer people listening to the show which is if you could go back in time, give yourself one piece of advice when you were looking for that first deal, knowing what you know now, what would you tell yourself?
Rob:I would tell myself to find a mentor. Find somebody that's willing to guide me. Because again, my story is not one of me knowing what I was doing. I ran around like a chicken with his head cut off. I just loved it. I loved what I did. And I was good at it and I was able to recover and learn from all the mistakes I made, but find somebody who's willing to help and guide you if you're into fix and flip, find a seasoned investor that may want a gap funder. If you've got some cash offer to, cover that out of pocket expenses and get some time with an experienced flipper, watching the process from start to finish. The other would be, you have to have liquid cash. And don't try and force a deal just to get a deal. Don't be a one and done. One deal can take you down and you won't come back from it.
Mike:Yeah, that's a good piece of advice.. If people want to reach out to you after the show, if they have questions for you, or maybe they're interested in lending, how can they go about reaching out to you?
Rob:We have a website, north Florida hard money.com. They can call me, text me. My number's 9 0 4 4 2 4 4 1 5 4 and you can email me 3shackscapitalpartners@gmail.com
Mike:cool. Awesome, man. This is great. Thank you for being on the show.
Rob:I appreciate it. Thank you for having me