Mastering Real Estate

In this episode of the Real Estate Game Changer Show, hosted by Mike McKay, Gonzalo Corzo revisits to share insights on the transformation of his business, Cash Geeks. The conversation focuses on adapting from a wholesaling-centric approach to incorporating flipping due to market changes, including rising interest rates and hedge fund alterations. Gonzalo reveals the challenges faced, such as reducing expenses, pivoting strategies, and optimizing project management. 

Chapters

• 0:31 Gonzalo Corzo's Business Evolution
• 2:10 Challenges and Pivots in 2022
• 5:19 Transitioning to Flipping Houses
• 7:18 Building a New Team and Strategy
• 12:45 Operational Challenges and Solutions
• 28:25 Managing Construction and Inspections
• 42:21 Scaling Up the Flipping Operation
• 43:28 Importance of Back Office and QuickBooks
• 47:46 Challenges of Buying Sight Unseen
• 58:32 Adapting to Market Changes
• 1:02:01 Building a Sustainable Flipping Business

Transcript

Mike: 0:00

All right, everyone. Welcome to the real estate game changer 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 this is a live show guys. So if you have any questions, please put them in the comments for our guests to answer. If you are in the Jacksonville area and you're in sales and you're thinking about getting into real estate, send me a DM on Instagram. We are looking for a salesperson to join our acquisitions team. This week on the show, we have a returning guest, Gonzalo Corzo. Gonzalo, welcome to the show.

Gonzalo: 0:36

Thanks Mike. Thanks for having me.

Mike: 0:38

For sure, man. Um, so I think it's been about maybe 18, 20 months since you've been on the show and

Gonzalo: 0:47

Nice

Mike: 0:48

business has changed a lot since then. And so.

Gonzalo: 0:53

Yes

Mike: 0:54

For the people who didn't see the old show, maybe if you could tell them a little bit about what your business was and now what it is today.

Gonzalo: 1:02

Yeah, absolutely Uh, well, I have two kids now since then So that's that's been fun. Um, but yeah, so so I got in in the game early on in 2015 And in 2017, I started a company called cash geeks And we primarily focused on wholesaling. Um, and we, we basically, um, tried to become like the biggest wholesale company in the country. And so we, um, only focused on wholesaling, didn't dabble on any like creative stuff. Creative wasn't really that big of a thing also, um, when we were on the ramp up. Um, and we basically really took off when we started selling the hedge funds. So selling a hedge funds allowed us to, um, start working and made it a lot easier to start working in multiple markets because of the same companies that we were selling to in Jacksonville, they were now buying all over the state and in multiple other States. And so that allowed us to really blow up because now we weren't dependent just on our market. Um, and so we rode the wave until interest rates started to creep up in, um, 22 and that kind of changed everything. Um, but in our prime, we were doing 300 deals a year. Seller direct, primarily cold calling. So that was, that was our, our bread and butter was just cold calling. We had a bunch of callers out of Egypt and, um, when the rates changed, the hedge funds turned off, but they didn't really turn off. Um, they kind of just claimed to be changing their buy box and revisiting. And so that's what we did. Um, we kept changing up our buy box as the hedge funds kept changing theirs. Um, but there was really no traction in that whole time from like, I would say from like June of 22 to like October, there was like nothing was sticking. Um, we kept getting deals under contract with the hedge funds. They kept canceling new, new buy box, new rules, new this. Um, and so, uh, we had to pivot and drastically lower expenses. Um, we were, we were pretty, um, we were pretty well invested in the business. Uh, we had a lot of staff, a lot of office space, a lot of all that, um, gearing up to, for, for what we were building. And, um, the biggest change I would say right now is. I went from spend wanting to spend a ton of money in marketing to spending to wanting to spend no money in mark, right? So so that was I would say the biggest internal Fear of mine when when everything changed in the beginning of 2023 I had a business partner that I built cash geeks with Dom and Dom and I parted ways from cash geeks in January of 23 2023 And, um, I w I would say I was kind of, I guess, traumatized, right? I had PTSD from spending a lot of money in the business, right? We had a ton of overhead office, employees, marketing. Um, and so I was, uh, I guess had some PTSD from that. So I was like, all right, I'm going to cut, I want to cut as many expenses as we can, um, and figure out what we're going to do. And I would say 2023 was kind of like a transition year for, For me and the team, we were trying to find our identity again. You know, like what, what is it that we do? Who are we? And, and I would say that came from not wanting to. immediately jump into redoing what we had just done. Right. Um, and uh, there was a lot of like a lot of like figuring out now that I have all this business knowledge, all this real estate knowledge, what can we do? What, what should we do going forward? Um, and that turned into how do we make money in real estate without spending money in marketing? Right. That's that kind of sparked that. And, um, with my business partner now, Hayden, um, Hayden joined the team and cash cakes at the, um, in 2020. And he basically ran our JV department. So our JV department has zero market spend, right. All just working with other wholesalers. And so, and it was never a core business. But it was always like a little thing that we had going on on the side. And when we wanted to spend no money in marketing, that kind of became our go to lead jet. Right. Um, and that's what we've been doing. So because of that, um, what we realized is not every deal that we get from a wholesaler is easy for us to JV on. Right. Um, because they'll either find their own buyers or just the spreads don't make sense anymore. If we're getting involved. Um, and so with us wanting to do less volume, but keep revenue good, um, we transitioned into doing some flips. So we had done a handful of flips in 22, um, and they went pretty decent, but that was the exposure. The first time I started flipping was in 2022 and Hayden had been flipping since like 2017. Um, 2018, something like that. And so, um, When Hayden joined CashHakes, I'll, uh, I'll never forget, he was like, Alright, I'll join the team, but I need to be able to do flips on my own. And I was like, Well, we're a wholesale company, that's really not a conflict of interest, right? So, You know, do your thing. And, um, he, uh, he would just crush it on the side with flips. And I was like, dude, we gotta be like, kick us in on the next one. So then we started flipping with Hayden. Um, and then, but we did it, you know, very sporadically and now with having less expenses. Less employees. Um, you don't have to turn and burn deals as much. And so we saw that the way for us to make, do less volume, but make just the same amount of money, if not more. Is doing flips, right? And we saw that there was a lot of fear in the marketplace. Um, a lot of flippers were, I mean, I lost some money on some flips at the end of 22 and beginning of 23, right? Um, so that was a lot of what was going on in 23. And so we capitalize on that, I would say on some opportunities, but we were still scared of the market, right? We're new to flipping, learning the constraints of flipping. Cause there are cashflow issues. There are money issues with flipping. Um, and it's not the same as wholesaling, right? But you don't really think about it, um, until you start doing a bunch of flips and now you have a bunch of debt service that you have to pay. And so we ran into, into some cashflow restraints. Um, and 23 and 24 beginning of this year or end of 23, we, we said, okay, if flipping is going to be our thing. We need to restructure the way we're going to do flips. We need to get better at project management. We got to get a bad ass realtor. Um, we, we gotta, uh, figure out how we're going to deal with, with cashflow. Cause if we're going to be doing a lot of flips, your, your, um, your monthly spend now becomes hard money. Um, and so, um, that was a, that forced us to partner up with, um, flippers that I had been selling houses to for years. Um, they were actually doing the construction for us on our flips. And then we decided to, um, during like 22 and 23, they didn't really want to do a bunch of flips. So they started doing construction for other flippers. And then, um, end of 23, they hit, it was funny cause they hit us up and we hit them up kind of like at the same time of like, they're now ready. They like, they have more peace of mind in the marketplace now that they're ready to start flipping. They're like, we've been doing these flips for these investors. And we made the, we make the contracting fee, but you know, their houses are selling, so we're ready to start buying again. And so we, um, we put together a cool little flip team. Um, Hayden and I figure out the acquisitions we're in charge of finding the deals and, um, and our partners, um, take care of putting up the money, you know, figuring out all the money stuff. And then we have another partner for the construction. Um, and so. That is how we've been gearing up right now, um, to, to be able to take on a bunch of flips. And, um, yeah, it kind of allows me and Hayden to leverage. are our best skill set, which is, um, no leveraging your, our connections in in real estate. Right. Um, and I would say that it's easier to leverage your connections when you're actually flipping hells when you're actually the end buyer. Um, you're able to, um, for example, like realtors as a wholesaler, I never really felt comfortable dealing with realtors. Right. Um, that's just me as a wholesaler. Like, and I know a bunch of wholesalers go after realtor deals and that's cool. Right. But, um, being cash geeks, right. Like locally, our name was kind of known. So anytime we dealt with a, with a realtor, like, Oh, you guys are just wholesalers. Um, and, and I didn't really have that confidence when you go to lock up a seller, right? Um, the confidence of dealing with the realtor, you're still trying to find a buyer. And so I was never really able to tap into the realtor network. Like I have the now as an end buyer, right? As an end buyer. Now I can. Really leverage that I can leverage my connections with wholesalers before I could only do business with wholesalers that had deals that they were willing to JV with me, you know what I mean? Um, so now as an end buyer, I'm able to do deals with all the wholesalers that I know, right? Um, so just kind of opened up some doors that I wasn't really thinking of. And so that's been what cash is kind of now. Um, we still have, so right now the team, it's, it's just four of us. It's me, Hayden, Charles, and Allie. Um, and Allie's kind of like the office. Manager, she just manages all the backend stuff, TC stuff, admin stuff, marketing, the houses, all that. Um, Charles is doing all of the, the dispositions and runs all of the, the JV wholesale department basically. Um, and then Hayden kind of handles all the acquisitions for the flips. Um, and then I kind of also focus on finding acquisitions for either the JV side or the flips.

Mike: 12:41

Hmm. How, I know you touched on it a little bit before, but obviously you mentioned like one of the constraints of flipping is, you know, private hard money payments every month. I mean, if you're running a lot of flips, I mean, you could be 20, 30, 40, 50, 60, 70 grand in payments every month. How did you guys. Solve that.

Gonzalo: 13:05

Yeah. So, so basically we had to raise private money to leverage our hard money. So we had a ton of private money raised. Um, and so we, we raised private funds from investors. And we were using those for our flips with me and Hayden, right? And we weren't really using hard money cause we weren't doing that much volume. So we were able to use the, you know, uh, we have like about like 600 raised. Um, so we were able to just use that for our flips cause we weren't doing a ton of volume, right? Um, but once the volume picked up, um, that's when we started leveraging hard money, With private money. Um, so that way the private money we can use for either rehab, um, budgets, right, uh, debt service payments, all that stuff. Um, but also one of the gentlemen that we partnered up with is. One of the, uh, value adds of his partnership is they bring a ton of cash to the table. Um, so, so their, their cash and also their family's money. Um, so we're able to leverage that cash against, um, hard money. So we have hard money. That's basically raising bridge capital essentially, um, is, is. Is the way I guess to give a broader answer for everyone to kind of understand it would be raising bridge capital

Mike: 14:42

Yeah.

Gonzalo: 14:42

allowed us to do that. Yeah,

Mike: 14:45

Gotcha. So then you can still use the hard money for the purchase, but then the private money can help you make the payments or maybe, maybe some of the rehab funds if you don't want to borrow that from the hard money.

Gonzalo: 14:55

correct. Correct. Yeah.

Mike: 14:58

What other challenges have you faced as you guys have been kind of ramping up the number of flips you've been doing?

Gonzalo: 15:07

Yeah. So challenges I would say is, um, so one of the things that we didn't take into consider, and I guess like everything came in waves. So when we decided to let's go by, We bought a ton at once. And so that was, um, not ideal. And so we basically saw that we had to pace ourselves with the buys. As the business systems and processes kind of got developed. Right. Um, so that was, uh, an internal challenge that we had to figure out. Another internal challenge was so like our, our rehab partner, he's very, uh, aggressive with, uh, construction. What I mean, aggressive is. He wants to put a roof on the day of closing, right? Like he doesn't want to waste any time. And so with us giving a ton of projects, um, there was a lot of, of decision making of like, okay, do we staff up to, to knock out these projects quicker? Or do we just let a house sit for a little bit while we get to it? And so that was kind of a balance that we had to figure out because you can try to pace the buys. But as you know, buying from your network, you kind of got to buy when the deal comes up, right? If a wholesaler sends me a deal and I close on it and I say, Hey, send me the next one. Right. As soon as he sends me the next one, if I'm, if I don't buy it, he's going to call his other VIP buyer. Then he's going to call that buyer the next deal. Right. And so you kind of just got to take them as they come. Um, and so that was, One of the things where like we were trying to pace the buys But as an opportunity, as opportunities would come, we had to, uh, take him down, right? We got to capitalize on the opportunity. So, um, we, we ended up hiring a project manager, um, and, and an office kind of admin for just the flips so that we could, uh, cause there's a bunch of like bookkeeping and accounting. That's another thing, right? With flips with wholesaling, bookkeeping and accounting is so much easier. So much easier, right? Um, we just have your marketing spend and staff and that's it. Right. Um, so you're, so you're not really allocating things a lot. And so for example, if we have 600 grand raised of private money and we use 2k of that to make this payment, that has to get allocated somewhere and it has to be specific to that property. Um, so the revamping QuickBooks, right. Revamping everything. So that we're actually tracking everything inside of QuickBooks. Um, so that's been fun and an ongoing thing. Um, luckily our partners take care of that end. Um, but still it's been, uh, just building processes for that. And, you know, systems for that has been something that we weren't really anticipating, right? Um, what else? Money, right? Money's always a thing. We, you, we had, we have a ton raised and we're like, cool. Like we have way more than enough. Right. But then you buy four houses and there goes a million bucks. Right. So you're like, okay, well we need to go get some more money. So. That's been, um, that's also been an ongoing challenge and also the market, right? The market has been, um, as I say, like things happen in waves, right? So we'll buy a ton of houses and then our realtors kind of just sitting around until we have a bunch of houses available. Right. And then, um, sometimes like we should, we would, we would, we've prepped better now. But are the first round of houses we gave our realtor, like six houses, right? Like, Hey, here's six houses go sell them. And so that was kind of sloppy. Um, so we had to re revamp the way we list houses, um, and, and not throw a bunch of houses all at once. Um, cause that also isn't, um, no, I wouldn't say not do it, but be aware of what we're doing because we have a lot of, um, you get anxious when you have 10 houses, right? When you have one house. And, um, you don't, uh, you have maybe one or two houses and two of them have showings. And two of them sell your good. But when you have 10 houses, you're more likely to have a couple of sitting around taking a little bit longer to sell. And so what we realized is we were, um, making by judgments off of our inventory. And so like with the partners, right, we would be like, okay, Hey, these houses are selling good. So let's, let's go buy in that area. And then we'd list a couple there and then they take a little bit to sell. So we're like, okay, okay, well maybe let's not buy that many there. We'll have, what, where else are our houses selling? And so, um, it's good to get that feedback to use our inventory. But when you have a lot of houses, it's also easy to get freaked out. Um, where we have, you know, a ton of houses and like 12 houses are on the market, three of them have just been sitting, everything else is good. But when you just focus on those three. Um, you kind of, uh, start to change your buy box a little bit in certain areas. Um, and I feel like, I don't know if that's right or wrong. We're figuring that out right now. Right. Um, we have a couple of houses sitting in like Murray Hill. Murray Hill has, has not been the best right now. Um, I would say it's a very, you know, mixed kind of neighborhood. So some, um, like hodgy podgy houses, right? Like some houses sell for crap ton and some houses don't. Um, and, and, and so I feel like Murray Hill right now, we don't want to touch. Right. But I feel like. That will change as soon as to how, you know, as soon as the house sells, it'll be like, okay, now we know what we're dealing with. Let's redo the numbers and let's go by. Um, so I'm trying to, we're trying to figure out, um, if that's good or bad, cause it is, it is dictating how we feel. Um, and if we didn't have a house, On the market in that neighborhood, we wouldn't have that bias, you know? Um, so we're trying to figure out if that's good or bad.

Mike: 21:45

Yeah. What did you revamp about like handing stuff like, you know, if first you said you were like, okay, I had hand six houses to my realtor. Say sell'em. What have you changed in that process now of

Gonzalo: 21:57

Yes. Okay. So, so the realtor would handle a bunch of stuff. So they would handle like. Staging pictures, right? Like all this stuff. So we took a lot of that in house. Um, we had the office manager, um, doing a bunch of that. So basically like instead of the realtor, so what we changed is before we would just give an address to the realtor and be like, Hey, here's an address, go sell it. Now it's like, Hey, here's everything we've done to the house. It's staged, here's pictures. This is what we want the description on the listing to say just make it so much easier for the realtor Um, yeah, so things like that is is what what we've changed Um,

Mike: 22:41

Why did you decide to take that stuff in house versus having the realtor coordinate the pictures and staging.

Gonzalo: 22:48

um, it was it was easier for us to do it as we Did the project as opposed to hey, here's five addresses go figure it out um, and so so as we we change the process so like documenting things As we're rehabbing, we're documenting what we're doing so that when it's ready to list, we have that list ready. Right. Um, another thing that tremendously helped was our stagers do the pictures now.

Mike: 23:21

Yeah.

Gonzalo: 23:22

So like before we had the stagers and then pictures, right? So like now the stagers do pictures, which is awesome. Right. So now when a house gets staged, and so it was like, instead of the realtor getting the staging and the pictures, now we're just going to get the staging because. The staging is always like, you kind of got to give them anticipation. You got to give them notice so that they're not like the house isn't finished. And you're like, Hey, we're already staged. Okay. We're two weeks out. Right. So you kind of got to give them notice that at the same time, you can't put an exact date because your project may or may not be finished. And so what was happening is the realtor would be like, cool. Hey, are you guys done? Okay. Yeah. Sorry. Call the stager. Hey, they're done. Go here. And then the stager, okay, we can do this day. Okay. So like, It was just a middleman that was unnecessary. Um, like the, the, the construction and I, this is gonna sound weird, but like internal construction knows way more about when staging is ready to, to go. And so it was more internal communication that, that, um, help organize that. Correct.

Mike: 24:23

do think that's interesting. The thing that you mentioned as well, that, um, you keep a list of what's done to the house as it's done. And then you can kind of give that to the realtor. Because I do feel like, you know, in our business, we, we handle the staging and pictures, uh, in house, but then. I'm not great about keeping that list. And then a lot of times the first five questions from the realtor are like, Hey, was the HVAC done? Was the X done? We did it. Was it repiped? I'm like, Oh man, that's a, that's like a big time saver. If you're just like, Hey, here's what we did. These are going to be 90 percent of the questions you're going to get from your buyer.

Gonzalo: 24:58

Exactly. Um, so yeah, so, so little things like that have, have really helped, but it's been learning the retail space, right? Like We'll boost some houses on social media. So we've kind of like, and, and, and our partners take care of this. So I don't, I really don't know the exact thing that we've been doing. Um, but I know that like, they, they have like some sort of process where like, after like a couple of days, if we have no showings in the first couple of days and we'll boost the property for a certain amount of time. Things like that, um,

Mike: 25:33

Like Instagram or like,

Gonzalo: 25:34

on Facebook. Yeah.

Mike: 25:35

wow, okay, I never thought

Gonzalo: 25:38

Yeah, so, um, so we've just been trying to get creative on the retail side We have a house right now the first time this is actually happening I'm actually in the middle of two Title claims so that's been fun. We're like we bought a house Renovated it selling it to the retail buyer and the title come like there's we have to do a whole Um title claim and so we're hoping it gets fixed. I mean, obviously it's going to get fixed like the the Underwriters, uh have you know expressed that it is it falls on them So they're going to pay for the attorneys and all that but we lost our end buyer right because now And who knows how long it's going to take. So something wasn't done on the probate correctly where it was closed. So they have to kind of like reopen probate. So, yeah, so we're figuring that out. And then I have another house, um, not a flip luckily, um, because I don't know what's going to happen with the retail market, like it's scary because. Things change all the time, right? Like right now, um, I think there should be some action because of retail, um, because the rates went down, right? Or there's talks about the rates going down. So I think a lot of people are going to be trying to buy. Um, but also like this year has been super, um, like dealing with investors. You don't really feel the seasonality of real estate. You know what I mean? And on the retail market, we do. Right, like spring break super slow week before school starts super slow things. You know what I mean? Like things like that. So we've been Experiencing on the retail side where we didn't really think about it, right? Like hey, we listed a house Right before fourth of july weekend, right? Like probably shouldn't shouldn't have done that we should have waited So that's not sitting for a week, right? Um, but the seasonality of the retail space has been something new to us as well.

Mike: 27:43

Yeah.

Gonzalo: 27:43

That's been Yeah,

Mike: 27:46

What was what is it? I know you mentioned you, like, guys have brought on a project manager. So, like, what's the role of that person in this whole operation?

Gonzalo: 27:56

yeah, so the project manager so to be honest, I I don't have the exact answer to that. I I know that um, so so we're three partners Um, and, uh, one of them is back office, admin, money. The other partner is construction. And then me and Hayden are acquisitions. So, um, the construction guy is who really oversees the project manager. Um, but one of the big things for us is just eyes on all the houses Every day. And so, yeah, Every day. once you have, um, I, like I said, our, our construction partners, very aggressive when it comes to rehabs, that's the only thing he can control, right? He can't control at what price we buy a house. He can't control at what price we sell the house. But what he can't control is how quickly. We renovate the house and the quality of renovation. And so for them, um, time is everything. So we actually figured out a way to even do private, you can do private city inspections. So you don't have to wait for the city inspector to come out. Um, it costs more money, but, um, you can hire like a private inspector for the city. Things like that. Um, so, um, eyes, eyes on the houses every day is like the biggest thing. Yeah. And then meeting city inspectors. That's the second thing that's, you know, you don't want just any contractor meeting with, with, or any sub meeting with, with the, um, city inspectors. And, um, You kind of got to know how to deal with the city inspectors, right? Like you, you gotta know what, what the A to Z is before you're getting with the, with the home inspector. So you can know, Hey, point out these things. Maybe we don't want to point out these things, right? Things like that. Um, so I would say that those are like the biggest things where like the partner can't be everywhere at once, right? Like if he has, um, city inspections, like if the city calls you and they're like, Hey, we're going to go inspect, you know, third street tomorrow at five, You can't say, no, get another date because I can't be there, right? Um, you kind of got to just take it, right? Like, we're not going to reschedule that because it could be another week, right? And then, then you fail that permit, and then you got to redo it, and then it takes another week to get them to re inspect and all this. Because we're doing a lot of like bedrooms or bedroom conversions, you know. Uh, three bedrooms to four bedrooms. We're doing a lot of adding bathrooms, closing and square footage, things like that. So, um, so we're pretty involved with the city on pretty much every project. Um, yeah, so I would say that it's been like eyes on every house and, and, and meeting with, with the city inspectors.

Mike: 30:59

Yeah, how does that work with the, the private inspections that you were saying?

Gonzalo: 31:05

So I'm, I'm not entirely sure how it works, but there are, I'm pretty, basically from, from what our partner has told us. There's like a list of approved vendors that you can hire from the city. And so there, it's like a third party vendor that the city has approved to inspect their houses. You have to pay them directly and then they will sign a letter and say, Hey, I've inspected this and you know, the permit's good. So you pay them directly. Now you don't have to wait for the city inspector to get to it whenever he gets to it,

Mike: 31:40

Hmm. So they're just quicker and there's a little more control on time because you're paying them obviously. So they're a little

Gonzalo: 31:46

correct.

Mike: 31:46

work on your schedule

Gonzalo: 31:48

Exactly. Exactly.

Mike: 31:50

there when I'll get there.

Gonzalo: 31:51

Correct. Correct. And they're also like easier to work with while you're at the house, right? Like the city is just going to be the city just has a process, right? So they're just like cool. It doesn't matter if you can show me right now. Like I have to take the notes and i'm out going to the next one, right? So like they're easier to work with when it's the same because sometimes like the city inspector also It's not the same guy, right? So like one guy will come out look at the permit. Cool So Then they got to come back out and then it's a completely new dude. So now we got to re explain what we're doing. You know what I mean? To, to kind of highlight the things that we did do and things like that. Um, or like one inspector will come and say, Oh, that's good. And then the other inspector will come and say, Oh, well you missed this. And like, um, with your own inspections, um, there's a little more control in that as well.

Mike: 32:38

What's your kind of target turnaround time on a, you know, a full renovation? Wow.

Gonzalo: 32:49

days. It depends on if we're adding a bathroom. So adding a bathroom is, um, that's the one that takes a little bit longer. Cause now we have to pull a building permit, plumbing permit, things like that. We have to get drawings depending on where we're at in the bathroom. So, and so, um, if we're not adding a bathroom, um, dude, I, I mean, our, our construction guy is crazy. So we just did a fire damaged house. And he's almost done with it. He's going to do almost a, almost 150 K renovation in 45 days.

Mike: 33:28

Yeah, that's wild. Yeah.

Gonzalo: 33:30

Yeah, it's crazy, crazy. Um, but we, we also don't pay the cheapest, right? So we're big. So that's another thing is as we did volume, some of our costs actually went up. Right. Because, um, you're before you can just use, you know, the two guys in a truck because you got one project going on, but if you're using, you know, them on six projects, you can't really count on them to knock out all six in a timely manner because they have other projects going on, whatever. So we had, we had to start using in, in certain trades, right? We had to start using certain vendors that maybe cost more, but we know they're going to show up on time. They're going to get it done. They're going to get it done. We don't have to fix it when they do it. Um, and we can, you know, we can give the roofing company 20 roofs. If we, you know, we don't have that kind of inventory, but if we had to give somebody, you know, 20 roofs right now, they could knock it right away. I think at 28 C's, they could knock it out. Um, so some of the vendors had to change a little bit. Um, and it actually increased some of the pricing, which was not something we had taken into consideration. But part of growing pains, and it's way better to just pay a little bit more, you know, we change the calculator, fluff up the cost on a calculator. To make up for the new prices and, um, and yeah,

Mike: 34:57

So is the way that you guys are running the construction is. Is it all getting subbed out or do you have some people in house or are you hiring GCs out some stuff?

Gonzalo: 35:10

um, so I believe that we're, we're hiring like subs for any trade that needs to be done, right? Roofing, anything like that. Um, I believe that when we are, um, so like we don't have any like. We don't have anybody on staff for construction. Um, we just have either either vendors subs. Um, and, and to be honest, I'm not the best to, to answer the, the construction. questions. Um, but Yeah, for, for my knowledge, that's, that's what we have going on.

Mike: 35:53

how many projects do you guys have going on right now, like between stuff that's like under construction on the market, like all that not sold yet.

Gonzalo: 36:03

Um, that's a good question. Pull that up on a spreadsheet so that I don't lie. So, Um, right now we have two, three, we have six on the market. Two of those that are on the market are pending and then yeah, one six on the market. We have four, uh, two, two under rehab. So right now we're, we're slow on rehabs and we have one, two, nine houses that we're going to buy in the next two weeks.

Mike: 37:10

you go,

Gonzalo: 37:10

So this is what I mean by like, it comes, it comes, it comes in waves. Um, that's, that's like we, we bought a ton of houses. And so we just kind of pause. Right on buying and then when you buy when you when you turn on buying again, it doesn't happen really immediately Yeah, we we threw on a bunch of houses at once on the market and then from that we decided to kind of let's Slow down a little bit on the acquisitions while we figure out what's what's really selling what's moving what's not And so we took in the summer. We kind of slowed down a little bit of buying Um, for like two months and then, Um, we've picked it up in the last, I would say the last, really the last month we've, we've kicked in a gear on buying. I would, I don't know. It's also felt like we haven't, we weren't getting that many deals from our network as much. So I don't know if it was just like a, a market thing or if everybody was chilling in the summer. Um, yeah, it felt like, um, like I just got a deal today from a wholesaler that we had bought like a Five houses from in like 60 days and then we just didn't get anything from them for like two months. Um, Yeah, so, um, so yeah,

Mike: 38:41

What

Gonzalo: 38:41

that's kind of what our what our inventory is looking like right now But we're definitely in buy mode right now So that um, I think we picked up like one or two from you, right two now. Yeah.

Mike: 38:53

both close next week. Yeah.

Gonzalo: 38:55

Yeah

Mike: 38:57

I only, I only, buy the mobile homes for the most part myself and I sell the single families.

Gonzalo: 39:04

That's awesome.

Mike: 39:05

of what most people do, but I like it. So

Gonzalo: 39:08

That's good, that's good.

Mike: 39:10

people send me single families. I go, I only buy homes that can be removed from the lot. Sorry, not for me.

Gonzalo: 39:16

I only, I only buy houses that nobody wants. Which is, I mean, honestly, it's a good strategy. I would, I would say like, we just picked up a, another fire damage. Right, so like, so now this is, this is gonna be our fourth fire damage house. Um, where the rehab's over like 120, 130. Um, so that's been kind of like, a little niche that we've been, You know, figuring out and, and I would love to become the fire damaged dude, you know, but I think, I think that niche, right, either mobile home, whatever it is being that niche buyer, um, that's what I'm, what I'm, I'm seeing. It's probably going to be my path.

Mike: 40:04

Yeah, I, yeah, I like that idea because if you ask me right now, who buys fire damage homes in Jacksonville, I don't, I actually don't think I can name anyone else. So then you just become the go to, Oh, I got a fire damage one.

Gonzalo: 40:18

Exactly.

Mike: 40:19

to these guys and kind of set the price to a degree.

Gonzalo: 40:22

Right. Right. Right. Yeah. So, so that's been cool. Cause our, like I said, our construction guy has been very, uh, uh, has had the ability now to really figure out construction. Cause in order to figure out construction, you got, you kind of got to do a little bit of volume. You know what I mean? Um, you got to figure out like, okay, now that we've done a ton of houses, now we know how to navigate. Um, now that we've, um, added, you know, 15 bathrooms, now we know how to deal with the city on this right now that we've done a couple of fire damage houses, and now we know when the city is going to ask for this, when the city is going to ask for that, which is really more of the hassle of fire damage is just the city. Um,

Mike: 41:04

Yeah. Okay.

Gonzalo: 41:05

so once, once we kind of understand that or understood that, um, Yeah. we're trying to, trying to figure out like, um, is this, can this be a niche for us? And I think that we're gonna, the hard part is like finding fire damage houses where, cause like fire damage, like the rehab is always like 150 grand, right? So it's kind of hard to find a 250, 000 house or under. That would make sense, you know? Um, and so that's kind of the catch is, is finding a fire damaged house where it's in a good enough area where the ARV is high, high enough for it to justify sticking 150, 170 K like we're doing one right now, the one that I told you, the 45 K it's, I want to say it's like a 200 K scope of work, dude.

Mike: 42:02

it's a lot.

Gonzalo: 42:03

It's a 400 K house. Um, like 450, something like that, but 200 grand. Yeah. Like it's a lot of work. So, um, we're, we're, I, I I believe in the, in the niche

Mike: 42:19

Yeah. What are some other systems or processes or hires that you've had to put into place in order to be able to scale up the flipping operation?

Gonzalo: 42:33

Um, that's a good question. I would say processes wise with flipping, it's a lot more systems and processes as opposed to staff. Um, so, so on really, really the only staff that we have, and we are still heavy involved, right? Like me and Hayden don't have a staff in the acquisitions where the, you know what I mean, like we're, we're the. Acquisition guys. And then our construction guy, um, he just has our construction partner just has a project manager. Um, and that is turning into a, um, just a project fee. Like we had them, the project manager on full time, but then we realized like it kind of goes in waves. And so inverted the project manager into a true, just per project manager, if that makes sense, as opposed to. Having him full time. Um, so we transitioned that, um, and then just, uh, really the biggest, I would say is having a good back office. That's the more important, most important part is. And when I say back office, it's the bookkeeping, the accounting and the tracking of the projects, which is kind of like construction, but it's not the actual construction part, right? It's like managing the behind the scenes of construction is, is, um, has been probably the biggest, uh, biggest need is, is QuickBooks. That's been the biggest thing. QuickBooks is revamping QuickBooks. It took us like two weeks. We had to consult with other, um, accounting companies, um, and we basically revamped the entire QuickBooks to be able to now use QuickBooks as our, it almost like tracks our Philips. Like, it's, it's almost like our, our, our CRM, right? Like for, um, wholesalers, we have CRMs like Flipper, like we just live, uh, live out of QuickBooks now.'cause the properties like, we'll create a property inside of QuickBooks, attach all the expenses, you know, and, and so we'll be able to, um, pull, press a house and then we can see, okay, this is what we bought it for. This is the closing cost allocated to it. This is the pri, the private money that's attached to the house. Um, and then all the scope of work. So, and then we broke down the scope of work into QuickBooks. So we now have like, um, roofing expenses, electrical expenses. So that way we can track everything inside of QuickBooks. Um, so that's really helped out the back office. And then the next step I would say is, um, the calculator. So, so our rehab scope calculator is very important to us that constantly has to get changed and tweaked, right? As things in, in the scope of work, either go up or down or in construction, either go up and down, we have to change that on the calculator as fees go up and down, right? We have to, we have to start tracking everything. Cause like I said, we'll use hard money, but then we'll leverage private money, but there's a cost to that private money. you're typical calculator doesn't factor in that bridge capital costs, right? So like little things like that, we've had to completely revamp, um, your closing costs very, and for using a hard money loan or not, that's going to change the closing costs. I'm just recording a mortgage. Mortgage deed stamps, all that stuff. And so your. We're, we're trying to get very granular with things because we're doing volume. And so if we're doing volume, um, these little fees will make or break a deal. Right. For us. Cause if we have, we're very anal with our, with our threshold. So if it's, if it's a 28 K deal, we're not buying, we have to make 30 K. And so, um, factoring in these little expenses. Or, or saving when you can also makes a deal work. Right. Um, so yeah, so the calculator is huge. Um, so I would say that's the biggest thing is, is the calculator when we buy a house helps mitigate all the stuff that we can't see in, in, um, expensive. Right? Like that's where me and Hayden, when we were flipping by ourselves, and that's where we totally lost our ass because it was just all the little expenses that you don't think of, right? You're like, okay, we'll make 30 K on this deal. We bought it for two, put in 50, sold it for three 25. We made 12. It's like, where is that money?

Mike: 47:23

our money go? Yeah.

Gonzalo: 47:25

Yeah. It's like, where did the money go? Oh, well, we didn't factor in this cost of here. This cost of utilities here. And you know what I mean? All that stuff. So, um, the calculator has been really helpful in allowing us to make the proper buy ins and even, you know, even though they're bad ass calculator, you still miss things, you still don't calculate stuff or, you know, things pop up in the, in the scope. Um, we've also had to create processes for buying site unseen because that's been a thing. So we kind of have some rules whenever we buy a sight unseen. We have to factor in certain things Worst case, you know things like that

Mike: 48:04

Yeah. what are the, what are some of the things for, for sight unseen? I mean, obviously you want to be a little more conservative in your reno budget because you can't see everything, but what else

Gonzalo: 48:13

I didn't seem we always we always budget for floor plan, right? So like so floor plan as a big flipper and I've never been a flipper. So Floorplan for us I get I guess for flippers is a big deal So, um, like just factoring floor plan is always a big deal. Um, taking down walls Yes. Having to move walls, open up kitchens, things like that. Like if, if we can't walk the house, we don't know what we have to do to the house, but that's what we have seen is, is makes a big difference. Is the floor plan is when you buy a house. If you, if you can change the floor plan and make it seem like a completely different home, um, it helps the house sell better. Um, and so, you know, opening up kitchens, opening up living rooms, things like that. It, um, When we're buying sight unseen, we can't really do that stuff. And so we have a threshold. Like I said, we always make 30 K. Um, so with buying sight unseen, we have to make 45 K, um, things like that. Right. Um, and so honestly the sight unseen deals always turn out to be awesome. Um, cause we're just factoring everything and, and, um,

Mike: 49:25

We're competition's probably less on him too,

Gonzalo: 49:28

Correct. Also a lot less competition. Exactly.

Mike: 49:31

won't do it anymore. Some people

Gonzalo: 49:33

Right. Right. Yeah. Yeah. So we'll, we'll just be very conservative on that. Another thing is like we can't see anything on the plumbing can't see anything So like sometimes there'll be no permits for plumbing But if we're able to walk the house, we can see that hey some plumbing has been redone, right? Or the the panel has been updated Things like that where if we can't see that in the pictures We'll just we just have to budget for all that stuff.

Mike: 50:03

Yeah, so, like, what is your actually a question for? I asked that is, uh, do you ever see yourself going back to sending out your own marketing?

Gonzalo: 50:17

I do actually yes, I I feel like it would be in a In a position. So basically like, so something that I have set up right now with Charles, for example, right? Like Charles is completely in charge of the wholesale department. Um, so we've changed the way he gets compensated and he's basically like his own thing. So he's no longer dependent on me on bringing deals. He has to, you know, he can source his own deals, he can do whatever, right. Um, so it would probably be in some sort of. Some sort of fashion like that, right? Where like, I'll put up the money for the marketing and I'll just have somebody else run it. I get first dibs on buying the houses. We get first dibs on wholesaling the house, things like that. Right? Like I, I haven't really thought too deep on it, but, um, but yes, it would be in some sort of, uh, defacto partnership with somebody I think is, is. Right now what I'm thinking, if I ever were to get into marketing myself, it would be something like,

Mike: 51:28

Yeah, are you guys doing anything with your renovations or staging or anything like that? That's a little bit unique to separate yourself from other properties, just because there is so much more inventory on the market than there previously was.

Gonzalo: 51:43

um, not necessarily. It's funny because we had this conversation of like, let's start doing unique things in the houses. Um, but we haven't really, to be honest, um, not, not that I am aware of, I don't, I don't believe we are. Um, I know that like all of, all of our houses look the same. So I don't, so I, I don't think we're doing anything too unique, right? Like, if, if you look at all of our flips, they all have like the light blue door, front door, um, light gray paint, and then, um, yeah, nothing, nothing really unique, man. I, I, would just say that the things that we are doing unique That you would see if you went to go look at all these houses, man. It's just, and I know because I've done projects without these guys. Um, and so like just the level of construction is, I would say what we're doing unique, and that's probably not the best answer, but. Like just being able to walk into a house and feeling like this construction was done good, right? This reno was was done. Well, you walk into the bathrooms You can always tell in the kitchens in the bathroom, right? The backsplash looks like crap It's you know, the the tile is all ugly even though it's brand new, right? It could look like it's renovated But if you look at the quality of the finishes or the quality of the tile work quality of the flooring things like that It's it's it's I would say that's something that, that we do right. Um, our rehabs are probably a little bit more, uh, expensive, I would say, than others. Um, but, we, we just don't half ass stuff. We don't half ass stuff. And, and I can say that because, I've done rehabs myself where I have half assed up, right? And so, like, I can tell the difference when I walk into one of the flips that I used to do by myself versus these flips with these guys. Um, just different, different quality of rehab. So, I would say that's, I think that makes us stand out. I would say another thing is we're not super aggressive on ARV. Like, some people are like, hey, our ARV is 300, let's try selling, you know, let's try listing it for 315 and see what we get. Right, so like, we're not like that. If our ARV says 300, we'll put 299. 299 and let's get it sold. Um, so I would also say that we're very realistic with our ARV prices. Because with us doing volume, we're a little less speed for us is more important on the deal, right? So like construction, let's keep the construction quicker and let's sell the house ASAP as opposed to Let's take a little bit longer on the construction because we can save money if we do the construction, you know We'll use this guy on the fence. It'll be cheaper, right? He won't be here for another two weeks, but we just got you know, the defense done 1500 cheaper We got this guy that's gonna do this. It's gonna be slow, but we'll get it done, right? Or when we list the house, hey, let's list for 315 and see what we get So instead of you know, just letting houses sit We will Or, or even just the, the city inspections, right? Like it costs us money to get the rehab done quicker. Right. Um, but we rather pay that extra, you know, thousand bucks, 1500 bucks, whatever it is we got to pay for the city inspector. Cause they're not, they're not cheap. The, the city inspectors. Yeah. So we have, so we're strategic on when we use them and stuff like that. Cause they're not cheap. Um, but with that being said for us, speed is way better. Also because of the, the market cycles, right? I would say me and all the partners in this flip business, we were all, uh, traumatized from not taking, um, the bird in the hand, right? Like we were. In, in a changing 2022 market and 2023, right? Like you could say f off to the buyer who wasn't paying full price. Right? But there was a, there was a moment where it all changed on like, cool, no, we're, we're not gonna take your renegotiation. We're just gonna throw it back on the market. And then you could have got, this actually happened on one of our condos. Um, we bought a condo. We had like three offers. We did highest invest as soon as we listed it. Then we went under contract with one of the buyers. And then they asked for extension because as soon as we went under contract, like interest rates started to change. So then they needed to ask an exchange and they asked for an extension because of their financing thing. So we were like, cool, we'll give them the extension because they were highest and best, right? They were over asked all this. So we're like, cool, let's just let them extend. Then when they did their inspection, They wanted us to change, it was something ridiculous, but it would have cost like eight grand for us to do. They wanted like all the, like, it was a condo where like it had all exterior windows, like from top to bottom and they wanted all that redone. Um, cause there was like some water stuff that was coming in. And so we said, no, we're like, there's no way we're going to do all that. Right. Um, so, and we didn't want to give them a credit for it, but we were already giving them a credit for other things. So we were like, let's just cancel the contract. Cause you know, we had two other buyers that are, you know, highest and best and all this. And then, um, That was that if we would have taken that 10k price drop or that 8k price drop It would have made like 30 grand we ended up making like two grand on it Cuz like as soon as we went back on on the market This was like three weeks after we had done like highest and best Because we had like we extended that buyer for financing and all that and so the house was just sitting It was one of those condos were like a great area, but HOA fees was just too high So with like mortgage rates creeping up, nobody wanted an HOA anymore. Um, that high. And so, um, yeah, I do that place. I ended up just sitting for like another three months and then we took an offer and he got done, but you know, we could have made 30 grand if we had just taken the, the AK price reduction. So right now we're just like, cool, whatever, if you want it, like we'll do it, let's move on because we don't want to just get stuck with another house. Right? Like right now it's definitely. Um, burden in the hand is, is, is what we're taking. So if we're making our margin at, at the ARB that we said, then let's just get it done, right? Let's not try to push it. Oh, a new comp came up and blah, blah, blah, blah, blah. Let's see what we can get. Um, I wouldn't say that we're underselling houses, right? But we're also not trying to push the market. And, and we're also not buying houses where, um, one of our rule of thumbs is, is. cookie cutter comps. So, we need comps that are exactly like, like ours, right? Um, and so, when we don't have that, we tend to not offer as aggressive, and then we tend to not, um, win the house, right? Because we're not offering as aggressive. Um, so that is it for us. Like, if we, if we don't really have apples to apples comps that are just like ours, Then we're going to be super conservative, um, on, on the, you know, kind of, uh, opposite to that is if we do have cookie cutter comps, then we get pretty aggressive because then it's, you know, we don't have to, um, Question a RV as much, right? Um,

Mike: 59:47

It's

Gonzalo: 59:48

like, for example, you had, like, you had that deal. Um, my bad. I'm gonna cut you off. Go ahead.

Mike: 59:54

No, you go first.

Gonzalo: 59:56

Like you had that deal off of South side. I forgot, you know what I'm on the deal South side. So like, that's an area where like, I never want a house in those little neighborhoods off the South side, because like comps are just kind of everywhere. Like it's those weird little streets, you know what I mean? Um, it's a great, like, that's an area where like, I'm always pissed because I know it's a good area. I know it'll sell well, but there's not a lot of, there's comps that are fully renovated. Everything is either sometimes three, one, two, one. There's no like, you know what I mean? Like it's weird like that. And so. Like that's a, that's a house that I just remember that you sent us that like, I knew it was a good house, but I don't have cookie cutter comes to justify it to my partners basically.

Mike: 1:00:39

Yeah. I've, I've noticed that recently with, you know, whenever we send out stuff wholesale, if it's not cookie cutter, it just doesn't, people aren't as interested anymore, even if I think there's a good margin on it. And it's interesting because like a lot of those houses, I just said, screw it. I'll buy it because obviously I have it in a number. You know, I have an additional cushion.

Gonzalo: 1:01:03

Correct. Correct.

Mike: 1:01:04

for example, like that one that I sent you, I ended up selling it for 30 grand more without doing anything to it on the market,

Gonzalo: 1:01:09

Yes. Yes.

Mike: 1:01:11

it doesn't mean that someone wants to buy it wholesale because they look at it and they're like, I don't know what it would sell for, but if it's sold for less, I would still be okay. If I had it for, you know, if there was a good margin,

Gonzalo: 1:01:22

Exactly. Yes. Yes.

Mike: 1:01:24

have the deal yourself,

Gonzalo: 1:01:26

Correct. And so that's why like we'll get a little more conservative. Right. But then at that point, you know, if I make you that offer, you'll be like, well, should I'll buy it for that myself, you know, and I'll just figure it out. Right. So, so yeah. So, so we're, we're the same, right. If it's not, if it's not really cookie cutter or comps, then we, we will, we'll still make an offer. It'll just be not as aggressive.

Mike: 1:01:49

Yeah, makes

Gonzalo: 1:01:51

That's another thing that I'm noticing, man, is. Um, which I think is the, is the right thing to do. Like a bunch of wholesalers in this market, like before you could just wholesale everything. And right now, like, I think it is, and I said this at like the wholesale meetup that I host, they were asking me like, what's something, you know, you wish you would have done earlier or in the beginning, I'm like, dude, I wish I would have closed on houses. Like I wish like even just a wholesale, right. Just that that's a perfect example of like, I'm not going to buy this to renovate it. But I know that I may be limited to the buyers that I have right now. And I only have a week on my inspection period to sell it. So you're going to be limited, you know? Um, and so as you get more market knowledge and just more, uh, deal knowledge, you kind of get the balls to close on stuff more. Um, but that's something I wish I would have done sooner. It's like, actually like, let's, let's figure out how to buy money and, and, um, and close on it. Because, um, there's a bunch of opportunities that I can think of, Right. Like something like that, like that deal where like, if I didn't have the money or the, or the guts to do it, like you just, I can't sell it. So I'm just going to cancel it. Right. Um, and. That's a deal where like, if you do know what you're doing, you can close on it. And maybe nobody from your buyers list will immediately jump on it, but that doesn't mean it's not a deal. Right. And over time you learn that more and more, right. You'll learn more and more that like, every time I don't think something's a deal, I follow up on it and somebody paid 20 grand more for it. Right. And so like.

Mike: 1:03:32

doesn't mean they always made money though.

Gonzalo: 1:03:34

Doesn't mean they made money, but somebody was willing to buy it. And so, um, that's just something that we've been doing a lot recently. It's like, let's buy a flip. And then as soon as we close on it, let's throw it out to our buyers and see if, if some of our investors want it right before we, before we do the renovation. Um, and if the numbers hit awesome, if not, we'll do the right now.

Mike: 1:03:59

Yeah. Yeah.

Gonzalo: 1:04:02

We just did one where like unique things too. We're like, we'll close on it. Um, we just did one where we bought it and then we sold a lot on it. So we parsed off the land, sold the lot and then, and then sold the house. Right. Um, so like things like that, you don't, you can't really do that when you're wholesaling it, you know? Um, so taking stuff down. Allows you to, okay, let's get rid of the junk in the yard, let's parse off the lot, let's trash out the house, um, let's cut the grass, let's get rid of the four cars in the backyard. And now we'll just get 30 grand more just cause we did all that. Right. Um,

Mike: 1:04:43

it is amazing what a trash out will do. Amazing. Like,

Gonzalo: 1:04:47

yes,

Mike: 1:04:49

um, what's your guy, what's your vision for this new path

Gonzalo: 1:04:57

It's a good question, man. Um, I think that what I'm seeing in the marketplace and what I'm seeing that we enjoy doing is just working with our network. So what I think we are becoming is so it started with working with other wholesalers. Right. But now that we're working with other wholesalers, we're basically just selling deals for other investors. And so now we're, we've also been having just other investors. Sell houses through us that are not wholesalers, right? Like, Hey, I bought a house. I bought a flip. Um,

Mike: 1:05:37

Oh,

Gonzalo: 1:05:37

I they own it and we'll sell it for them, right? So so Um, and we've been charging like flat fees on certain things um, but I i've seen that there is a huge demand now is you think of Sellers when you think of sellers you think of the distressed sellers You That are, um, are the typical avatar, right? For, for what we're, for what we think of for wholesaling. What we don't think of is the whole other Avenue of investors who are distressed, who are needing to sell. And we didn't really have a lot of that in the past couple of years. Um, but now there's a lot of investors who. Hey, I want to, I want to cash out on some of my rentals. I want to cash out on some of my Airbnbs. I want to cash out on some of those stuff. And so we've been trying to do what we can with that inventory because sometimes we're not really, some of this inventory isn't exactly like your, uh, flipper inventory or your buy and hold inventory. And so we've, what we've been doing is. Taking like tenant occupied houses, putting them on the market for some investors, things like that. Um, so I'm seeing that there's probably going to be a need also with just the way the market's going. Um, there's just always a, like a new avatar right now. It's just the distressed investor. And so that is. A niche and then distressed investor can be a wholesaler, right? Who has a deal that maybe they've been trying to sell it and they can't sell it. They can't move it um, or Um, it's an investor who bought a house Maybe they bought it haven't started reno. They bought it Maybe because there's a lot of outside investors that are buying stuff in jacksonville And they'll just sit on it because they bought it cheap and it's just sitting there vacant, you know, and I'll, I'll get to fix it one of these days. And so I love the new conversations now that we're having. It's like, yo, what would you like to get out of this? And then from what they'd like to get out of it, I kind of run comps and say, Hey, I could probably get you. Or sell it for around X, um, I'd go under contract with you at this price. And then my buyers pay all the closing costs. My buyers pay my fee. Um, and then, uh, you know, take about two weeks to find someone and then about another two weeks to close. Um, so it just makes like that acquisitions funner for me. Right. And, and allows me to leverage everything that I've done. The work that I've been putting in for the past 10 years, right? Like just going to all the networking events in Jacksonville and everything. Like, you can't really leverage that with sellers, you know? And like, that's the main bread and butter of your business is acquisitions. And You can't really network. You can't really leverage your network with acquisitions unless you're helping them get the most for their house. Right. And so that's kind of been the opposite is like my team at cash case. We've always been on like, how can I get this house the cheapest? And then how can I sell them for the most? And then now it's kind of like, how can I sell this for the most while helping my investors or JV partners? Get the most for the house also. Um, so it's changed, you know, we're not making a killing on all these deals. Right. So now the profit margin kind of goes down, um, but it makes acquisitions way easier. There's zero market spend. There's zero like hiding, right? Like there's no like, Oh, I need to get back in with my partners and blah, blah, blah, blah. You know, um, they're expecting, uh, renegotiations, right? Cause we're like, Hey, we're going to try to get this much, but we prepared to sell for this much, right? Um, so we'll kind of give them that. And then it's all on the up and up, right? Like, cool. You're willing to take one 15. I'm going to mark it out for one 30. I'm going to charge you a flat 7, 500 bucks. So if I sell it for one 30, you make the extra, right. Um, things like that. So it's been, so it's just been a cool thing that we've been slowly figuring out.

Mike: 1:09:57

And are you like guys usually moving? Is that stuff you're moving off market? Or is some of it's going on the MLS or it's a mix? Or

Gonzalo: 1:10:05

I would say it's a mix. Yeah, it's a mix. Um, but now that, you know, we're treating it this way, it allows us to be more transparent with our clients. So it's a lot easier to put things on the market. Um,

Mike: 1:10:18

what are you guys changing on the like retail disposition side? If you have changed anything, like how are you having your realtors approach to sales with the increased inventory? Oh, flips.

Gonzalo: 1:10:30

good question. Um, to be honest, I, I think that what we're doing is, so I know that we're doing like open houses, right? So that's something that we didn't do much. So we're doing like open houses. We're boosting the houses on social media. Um, we're, we're being very vocal about all the repairs that we're doing. Cause we're seeing a lot of inventory creep up, but all the inventory is crap. Um, so if you look at the inventory that's out there, nothing, there's not a lot of inventory that's still like fully renovated, right? New roofs, new kitchen, new bathroom, new this, new that, new electrical, new plumbing. Um, so we're trying to highlight that as much as we can on all of our listings. And we're trying to, um, uh, like whenever we are, um, and this is from, from my knowledge, right? I'm not all in, in, in the retail side, but I know that like, um, one of the, uh, we have a mortgage broker who, if we, um, if our buyer get uses them, they will credit to, um, the buyer's closing costs. Things like that. So we're trying to get creative like that. Um, but other than that, not, I would say nothing too creative that I can think of. So

Mike: 1:12:08

gotcha. How big do you think you'll get the flipping operation? Or how big do you want to get the flipping operation?

Gonzalo: 1:12:20

we were aiming for a hundred this year when we decided to go ham. And then the feds never lowered interest rates. So like in the middle of summer or right before summer, I would say May, Beginning of May we decided to not do a hundred. Um, because we, we wanted to make sure that we weren't just caught up in like volume, right? The same mistakes that I made with Cash Geeks, where I was just like, Hey, let's just do a ton of business. And who cares if we're actually making money? Let's just do a lot of volume. Um, and so we just kept, I would say like, how big do I want it to get? I would say it's going to be market dependent because with the flips we have had scary times. And I wouldn't say that it's scary times, but like, you can lose your ass with flips, right? With like my wholesaling operation, like, this is gonna sound shitty, but like, worst case is you just fire a ton of people. And like, that's it, right? You close up shop. But like, with owning real estate, like, you're kinda gonna mess up your whole name if you don't sell these houses, right? Um, if you have to give these houses back to your lenders, you're screwed. Right, or at least that's the way that I feel, right? Like, no one's ever gonna lend me money if I If I, um, have to give back houses. Um,

Mike: 1:13:54

sure.

Gonzalo: 1:13:55

so what you don't want to do is get caught with your pants down with a ton of inventory. And so what we're trying to do is we're trying to not go into the election winter with a bunch of houses. And that's like hit or miss though, because we have to buy opportunities as they come. Right. And so like, if a good deal comes, like we kind of want to buy it and need to buy it. But now that we're buying, we're like, okay, this goes on the market. It's going on on the market in November and December. Like what, how do we budget for that? Should we lower the ARV a little bit? You know, like what, what do we do? Um, so that's been interesting on like, uh, it's turned into more of, which is the way it should be, right. But you don't really think about it's turned into more of like, how much money do we want to make? And what's the minimum that we would be okay making. And let's just aim for that this year. That's kind of what it's turned into like a beach at least make like 200, 250 grand. We don't, we don't need to do more flips. Right. So if that takes 30 flips. or if that's 60 flips, that's what we that's the amount of money that we need to make. So let's do that. Right. But, um, other than that, we're not really, we're not really trying to start a business of like flipping houses, if that makes sense. So, so I don't know what our goal is, because really, what I think it's going to happen is, I feel like I want to turn into more of Doing the deals that you said, like where you close on it. and then just resell it. That's really what I, what I feel like is going to be my buying business is just like, Hey, let me just close on it. See if somebody else will, will buy it. Once I close on it and trash it out, you know, maximize it as much as I can. That's really what I feel is going to be the bulk of our buying because construction has already forced us to do that not forced us, but it's been like, okay, well, construction is backed up. Let's just try to sell this house. And then when we have to, it works. So that has kind of changed the way that I envision like buying houses and renovation. Um, so if we buy 100 houses, that might mean only 50 flips. So like the buying company is still doing a hundred, but we're really only doing 50 flips and then the other 50 we're just reselling. And so that's kind of been the way that we've. Pivoted in a way. So I'm figuring that out right now, to be honest.

Mike: 1:16:49

were building a. Big wholesale business again, besides actually buying some properties them down and reselling them. What else would you change?

Gonzalo: 1:17:03

So my biggest regret dude was inbound marketing. I always did outbound marketing and I never, never really cared for, or, um, I never figured out inbound marketing. And so that is something that I wish I would have spent more time doing. And um, yeah, especially in markets, especially in times like right now where you kind of need people who are a little bit more motivated. You need people who are more realistic on what they're going to sell. And so, um, inbound has been, uh, I would say my biggest weakness.

Mike: 1:17:49

Anything else you would you would change looking back if you're trying to build it real big again.

Gonzalo: 1:17:54

Um, I don't know, man. I mean, I think, I think that a true wholesale company probably needs to close on things. that's that's what I think, I think would be different. I don't know that you have to rehab everything, you know? But I do know that like to be a really good acquisitions company. Like, I mean, I can't tell you how many times we, and especially in the beginning, like where we just didn't know, um, we couldn't like, we'd get leads where we couldn't stop the sale. We couldn't stop the foreclosure. We couldn't stop the tax deduction. Right. And so like there's certain times where like you can get a good deal, but you got to jump on it and you get, and you're the only one that knows about the situation. So. The deal only works if you can buy it right there on the spot. If not, if you got it, lock it up in your country, then go market it out to your buyers and do all this. Like, unless you have a really, really good buyer's list and your buyers have to be hot at that moment, right? Cause you can have a really good buyer's list. And then your buyers are like, yeah, I just bought three houses. Like call me in two weeks and I'll be ready to buy. Right. Um, so like you're kind of dependent on your buyer's list at that moment. So I feel like. For me, um, it would be taking down houses, inbound marketing, and then, um, probably like commission only people. So I would say like that's, that's like, we just always did everything, um, W 2s. And so getting commission based like Dispo acquisitions would probably allow you to scale effectively and efficiently where you're not spending all your money. And needing to recoup as things come in. Like if the company makes money, awesome. If you know, if there's not that many sales, you're not spending a lot of money on overhead. So I would say like, if I were to build it back up, I would probably do like heavy commission based sales positions. inbound marketing and Taking down assets taking down the houses maximize the house

Mike: 1:20:12

Cool. Well, we're getting close to the end here and there's always two questions I like to ask at the end of the show. First is, uh, if you could go back in time, give yourself one piece of advice when you were looking for your first deal, knowing what you know now, what would you tell yourself?

Gonzalo: 1:20:34

Looking for my first deal knowing what I know now, um This is gonna sound weird, but I would say I would say lock it up and figure it out later Like figure out the rest after you lock it up. Um, I didn't start really learning about doing deals until I started doing deals you know, I mean like that sounds weird, but um You don't learn Until you have a deal under contract and so like I don't want I don't want to say this in a you know I hope i'm saying this the right way but like Use your first five contracts to learn real estate not even to do your first deal You know what I mean? And you'll probably do your first deal, but like use your first like opportunities where somebody's. Willing to accept an offer. Like maybe you're too scared because you're not locking it up for the right price, or maybe they're giving you too short of an inspection period or whatever. Um, I would say like, just lock it up and then start learning.

Mike: 1:21:44

Yeah, good piece of advice. So second question I always ask is what is the craziest or most uncomfortable situation that you've ever experienced in a real estate deal?

Gonzalo: 1:21:57

So I got one. This happened probably about a year ago, I had a couple guys that I was actually doing some coaching for and they came down to hang out with me for a day and I had to go kick out some squatters. So I was like, Oh, why don't you guys come with me? So I brought like coaching students with me to go kick out some squatters. And when we go to the house, I didn't realize, but the house was like squatter headquarters for the neighborhood. So there was, there was realistically 17 to 20 people there when I got there and they were all just laying out in the house, in the backyard. Um, and the guy who was allowing us to access the house was like the main, was like captain squatter. And he was, uh, like a family member of the, of the lady who owned the house. So he was like captain squatter. His job was to help get all the squatters out. But, um, there was multiple rooms where we went into the house where there was people just laying on the floors and in the beds and they were like, it was almost like they were dead. Like, they were just there on the floor, or on the bed. It's funny, dude, actually, um, Warren has a video of this house also, so you should chat with Warren offline. Because Warren will probably still have the video. Um, and uh, Warren's like trying to wake up this dude. And he's just not getting up man and warren's like banging on the dude like yo wake up the guy's just laying there but um But yeah, so I would say that one that was a very that was like the first time that I was like genuinely scared um Because it wasn't like there was like one or two people there was like everywhere we went There was just like people all over the house. It was like a two story house. It was a huge house on the west side the pool and uh Yeah, so that was that was fun.

Mike: 1:24:17

Well, um, if people want to reach out to you after the show, maybe they have a deal on Jacksonville and want to send you guys and see if you'd be interested in buying it. How can they go about reaching out to you?

Gonzalo: 1:24:28

Yeah So I would say best way is either to email me gonzalo at cashgeeks. com Or you can send me a text. Um, I sell 941 993 9892 Um, and i'd love to you know, either buy a house off of you or Um, if you need help moving the deal I can move the deal also Um, yeah,

Mike: 1:24:52

Cool. Awesome, man. Thanks for being on the show

Gonzalo: 1:24:54

awesome. Yeah. Thanks again, Mike