Real Estate Game Changers Show
Real Estate Game Changers Show
Flipping and Renting: A Journey to Success
In this episode of the Real Estate Game Changers show, host Mike McKay interviews Justin Taylor, a Jacksonville-based real estate entrepreneur. Justin shares his journey from buying his first duplex in 2019 to starting his real estate business in 2022. Initially intending to pursue a career in physical therapy, Justin found his passion in real estate after working with an investor who owned 30 rental properties. Over two years, they scaled up to over 100 rental properties before Justin ventured out on his own, amassing 27 properties. He discusses his strategic shift to focusing on wholesaling for active income while maintaining flips and selective rental acquisitions. Key points include the importance of tracking key performance indicators (KPIs), a robust sales process, efficient market analysis, effective dispositions practices, and balancing personal and business vision. Justin also offers invaluable advice on mindset, the significance of taking action, and navigating the complexities of scaling a real estate business.
All right, everyone. Welcome to the Real Estate Game Changers show. I'm your host, Mike McKay, based out of Jacksonville, Florida. And each and every week we do this show with people who are changing the game of real estate all over the country. If anyone's in the Jacksonville area and you're in sales and you've been thinking about getting into real estate, send me a DM on Instagram. We are hiring salespeople for our acquisitions team. This week on the show, we have Justin Taylor. Justin, welcome to the show.
Justin:Hey, man, I appreciate you for bringing me on. I'm excited to answer questions and talk. So let's go.
Mike:Let's do it. So for the people who don't know you, could you tell us a little bit about how you got into real estate and how that's kind of led you to where you are today?
Justin:In 2019. It was a duplex I bought. But I didn't really do like really start my business to like 2022. In 2019, I was finishing up my college degree and with the hopes of maybe going on to get my doctorate in physical therapy. So around 2019 to 2020, I was actually. Looking at graduate school, I met another investor with about 30 rental properties. And at the time he kind of, you know, joined a mastermind. And so I worked as his acquisitions guy. A lot of people after their bachelor's degree, they have what's called a gap year before they go on to graduate school. And so I was kind of in that gap year where I was like, you know what, I'm gonna give this a try. I just read rich dad, poor dad. So, I was on a rich dad, poor dad high back in 2019 and I started working for this other investor who was a real estate agent, had 30 rental properties and he was also trying to kind of get in that investor role. So I kind of, you know, I met him. And at the time he says, Hey, I need a guy that's boots on the ground, going out and making appointments. So we went from 30 rental properties to a little over a hundred rental properties under his name. I was just, I was his acquisitions guy. It wasn't my business. And so I got to experience locking up deals and watching them get across the finish line. And we did, you know, 70 something deals just from 30 to a hundred. And so I got to see, you know, that we did that in about two years. And so I got to see at the end of the two years, his. His wife retired and she doesn't have to go back to work. They're having another kid and they're in their late thirties. So I kind of got to live by curiously through helm. I got to, you know, I didn't have to have the financial burden of like making mistakes with marketing. Cause it was all on the line with him. And at the end of the two years I was like, I'm gonna go give this a try myself, so. Had a conversation with him and I said, cause his kind of what me and him talked about was once I get to a hundred doors, I'm happy. So we got to a hundred doors and he said, I talked to him, I said, Hey, now that we've reached a goal, you know, I want to go build, I want to start building longterm wealth for myself. And so that was back in 2022, maybe late 2021. And I jumped ship, took a lot of that knowledge I learned. And we, you know, real quickly grew to over 20 to 20 something doors, I think 27 now. And you know, we've shifted focus from, are we flippers, wholesalers, rentals. So we've gone through all those learning curves of just trying to figure out who we are as a company. And so. It's fast forward to 2024. I mean, I've been doing this on my own for about two years now. And yeah, that's my, I mean, I can ramble more, but just to try to stop myself from talking too much. That's my quick summary of just how I got started and where I'm at now.
Mike:Gotcha. Okay. So, you know, it sounds like you kind of went through a couple of different phases of your business. You know, you said, you know, rental stuff, flipping, you know, wholesaling, but what does your business look like today? Yeah. Yeah.
Justin:Primary wholesalers who flip one house at a time and we'll buy a rental if it's just a home run deal. That's our mission statement. That's who we are. And that the reason we're so specific on that is cause, you know, we acquired, you know, a couple million dollars worth of rentals and we were broke and when I say we have a partner that we've just been doing it 50, 50 together and you know, it, it sounds sexy on paper to be like, Hey, let's grow to 20 doors real quick, but you can get to 20 doors and still be broke. So. My real estate coach was like, Hey you're doing it backwards. You need to build some active income first. So this past year we've made major changes where we're like, screw the rentals, you know, it's active income, first flips and wholesales. And so for us, we're a wholesale first company. You know, we acquired in flips at the same time and we still ran into issues cause we were like, well, what about all the mortgage payments and the amount of cash needed to keep that many projects? So. For us, we're really good at acquisitions. You know, like I said, I worked for that other guy. Who got a lot of experience, so I'm comfortable making offers. I'm comfortable saying no. So that's why, you know, my partner and I was like, let's just be a wholesale company. We scaled out on the flips and said, we'll only flip one or two at a time. We don't want to flip 10. We feel like scaling the 15, 20 wholesale deals a month is like where we want to go. And then once we really have that active income dialed in, then we will start scaling the passive income. I think. A lot of people get it kind of messed up where they say, Hey, let's go buy rentals. And, but you got to have that active income. And for us, the active income is wholesaling and we'll cherry pick those flips and then we'll buy rentals. If you know, I do a lot of the birds, if we can do like a cash out where we can pay ourselves that wholesale fee, we still owe our wholesale company, a wholesale fee, so we won't buy the rental unless the rentals can pay the wholesale company. So that's kind of how our mindset shifted over the last couple of years.
Mike:Gotcha. And then why did you decide to keep the one to two flips a month versus just doing straight wholesale?
Justin:We, I like flipping. We have a crew that we try to keep them busy every month. And because we like right now I've got 18 wholesale deals that are under contract that we're actively pushing out. Our contractor just finished up his last flip. So he's ready for the next one. So, now that he's ready, we might look at those 18 and say, which one of these that we want to flip, but while he's under, you know, while the flips are going, we don't even worry about it. For us, we don't want to do more. Like I said, that's what we're comfortable with. You know, we might scale it later, but we just, for us it's about focus and clarity and we grew a lot of rentals, we grew a lot of flips, we But then we just, we hit this ceiling where, because we're not focused, we just start getting spread thing, get put in cash crunches and for us, it's. It's it's just, it's, this boils down to just clarity and focus. Like we chose, this is what we want to do. And we, for us, it's a lot of people, I think what people misunderstanding about scaling isn't bigger. Scaling is just more efficient. So we don't want to. Yeah, we don't want to get bigger until we're more efficient. So one to two flips is what we're comfortable with. And we don't have the privilege to grow until we're more efficient. So we're just, right now I'm in a phase where we're trying to prove that we can be really efficient before we get more. So that's what scaling means in our eyes right now is how efficient can we be before we get our hands on more flips than more rentals? Cause I've definitely put myself in some cash crunches from not being focused and it's not fun being there.
Mike:And like, what are the things that, that either you have focused on in the last year or that you are focusing on going forward in order to get more efficient?
Justin:Right now what we're focusing on is just something tactical is our buy box. So like, how clear are we on our buy box? So we're, you know, we made a very basic buy box, but we're tweaking it. Like my, what my coach said is my partner should never have to approach me and say, Hey, is this a deal? He should be able to go to the buy box and say, this is what, this is the company's buy box. So like, how clear is that? The other thing is, you know, as wholesalers, we spend a lot of. Money on marketing, but we haven't we haven't kept track of our KPIs, our marketing KPIs. So right now our real estate coach wants us to just be consistent at updating our marketing KPIs every single day, we want six months of data. So that whenever we do say, Hey, we want to scale, we can look at six months of data and make educated decisions. Whereas before we were just making decisions off of gut feel like we want to do this marketing campaign, or we feel like we want to do this marketing campaign, but we were never making decisions off of history and data. And so that's one of the things that we're focusing on is just every single day, taking 10 minutes, going to plug in our KPI numbers. And when I say KPIs, that's key performance indicators. So like how many offers phone calls, appointments, contracts are getting signed. And what happens is we start looking at conversion rates. Like how many offers is it taking to get an appointment? How many appointments is it taking to get a contract? How many contracts that we lock up to wholesale? How many of those fall through like on average, and once you start getting data like that. You can then throw money at it and say, if I want to throw X amount of dollars in it, I know it's going to do this because this is what the last six months showed. And so we feel like we're at a point financially that we could throw money at the business, but it's like throwing money in a fire pit. It's just, you're just going to waste money because you're not operationally efficient. So when I say operationally efficient, like how well do we know our numbers? Every single person I've seen that's super successful knows their numbers. They know how to make decisions 90 days in the future. I can't do that because I don't, I haven't taken the time to just stay focused on our KPIs as a business owner. And so that's kind of our current phase. Once we have that six months of data, Then we can say, Hey, now we can scale. That's yeah, I mean, those are two things we're focusing on right now.
Mike:What are some things that you noticed when you, like, kind of first started tracking those KPIs?
Justin:That's a loaded question. We so one of the things that we I think I'm just trying to think back on the last few months. So one of the things we've noticed is Is, I mean, it, you know, we're in a mastermind, so we can kind of compare other KPIs. And so that's a quick golden nugget is just being a community. I mean, if you want to scale your company, being a community. So just a quick gold nugget right there. But one of the things we noticed is, you know, we're spending X amount of dollars on this marketing campaign and we're seeing other people. You know, they're producing on average this amount of leads. And for example, PPL is one of our main marketing pay per lead. Another company might be closing one out of 10 leads. Well, if we're closing one out of 30, something's off. There's a sales issue. There's a follow up issue. Like, why is this company closing one out of 10 leads? I think the issue is when you don't. When you don't know that information, people think, let's spend more money on marketing, but what if you could close more deals just by being more efficient in your sales process? So I think for us, that was one, something we noticed. I think it might've been like one out of 20 leads and we like, but why is our coach doing one out of 10? So we've made some tweaks to the sales process. How aggressive are we being with, you know, getting ahold of a new lead? You know, we, it was just simple things like, We might call that lead once a day for three days, and if they don't answer, put them on a drip sequence. Whereas our coach was three times a day for the first seven days, and just that small tweet, you know, now you're getting a hold of more leads, and that doesn't cost you any money. And so that's one of the things that we notice is like, just, You know, how aggressive will we be in, in that initial point of contact with new leads? I mean that just that small change right there. Now we're getting ahold of more people and the ripple effect that causes to how many more deals you're closing. There's just these tweaks you can make in your business that it doesn't cost you money. You want to make those, you want to make those tweaks before you spend money. And so that's what we're doing is just getting really operationally efficient at all those things so that when you do throw money at the business, the only thing it's going to do is grow. That's what KPI is going to do for you.
Mike:Gotcha. And then I know we were talking a bit offline how, you know, you feel like you guys are pretty good at acquisitions. What do you think has allowed you to be able to be good at acquisitions and buying properties at good discounts?
Justin:You know, acquisitions are just a job. Are you familiar with John Martinez? So a lot of, a lot of people in the real estate industry, you know, they know who John Martinez is. He's, he's a sales guy. And he, I remember a podcast he did and he talked about how people misunderstand that being in sales is your personality. Being in sales is learnable. Now don't get me wrong. There's people out there. There's people out there that might have better cultural index. Like they might culturally, their personality might fit a salesperson better, but anybody can do sales and sales is learnable. And what I mean by that is, is we have this personality test that I took. I am not a sales guy. I'm not a sales guy. But I got good at sales. I understood just certain sales techniques. Just the sales process, you know, I think I heard somebody say, what's it, what's the karate guy that says, you shouldn't be afraid of somebody that knows 10, 000 different. Types of attacks. It's the person that's done the same attack over and over. That's the person you should be afraid of. I think John Martinez used that analogy. He said, it's the same thing with sales. It's not all the different sales techniques. It's the person that, that picks a sales tech technique and just does it over and over and just gets really good at it. And so we've been really obsessed over this is our sales process and we're sticking to it. And we just do it over and over and over and over. Now we have coaches that we might make some tweaks and he's like, Hey, throw this in there. So we tweak it. We do it over and over. And so I think that's what's made us really good is we have a sales process and we actually make the calls. I know, I think another thing is people get in, people get so stuck into what's the sales process. The sales process is pick up the phone and say, Hey, do you want to sell your house? That could be your process. Can you do that? A hu, can you do that a hundred times a week? And then there's no need to go get a fancy sales process. If you're not doing that at first. I think what our real estate coach has taught us is you can't steer a parked car. Like if you're not making a hundred calls a week, I'm not going to give you a sales process. The person that's making a hundred calls a week. Now you can start building on their sales process. So. Don't get caught up into like, what's the script to use, like, go make a hundred calls a week and then you can constantly tweak that script you're using. It's, I mean, it's super simple, just a super quick, like, if you're trying to get your first deal, like, I mean, you could, I mean, you can go on, just look on Zillow and make an offer on every single house out there. Screw the price, just, getting told no. Obviously there's paid ways. I can go pull a list and start cold calling, but I mean, if you're not making the calls, nothing else matters in this business. I,
Mike:What is your guy's sales process?
Justin:I mean, so we have a script. We follow super simple. We set the stage. Um, and I can go through it super quick. It's set the stage. Hey, and a lot of what we do is virtual, you know, we do have some in person stuff, but super simple. Hey, Mr. Seller, do you have 10 to talk? Boom. You just, that's super simple because if they don't have 10 to 15 minutes to talk and you start rambling, they're immediately going to be turned off. So that's for us, it's setting the stage. As soon as they say, yeah, we've got 10 to 15 minutes to talk. Well, Hey, Mr. Seller we are a real estate investment company. We don't buy every single house we look at. So if for some reason we get to the end of this call and you decide not to sell, that's completely okay. No reason to take any next steps. That's part two, give them permission to say no. We just want to let them know, like, Hey, you're not, you know, this is a, everything I'm telling you, I've learned through John Martinez and other coaches, like just give them permission to say no. Next step is, Hey, can you tell us about the house? They tell us about the house. The whole point of that isn't to actually hear about the house. We just want to. Get them talking so that we can, so we can use that, catch some pain points anytime they bring up pain points. We want to ask why, like, you know, or what have you done to solve that? Or can you tell me more about that? That's where you start having these softening and surrounded questions and statements and all that fancy stuff. But, and then it's super simple. Once they're done talking, we've now gotten to that point of like, Mr. Seller. I'm confused. While it sounds like a great house, why would you even consider selling? Oh, the whole point of that is to figure out why they want to sell. And then they're going to tell you why they want to sell. And that's when you can bring them in and say, Hey, you know, this is what we can do to help you overcome that solution or my biggest thing in our sales process is our value is not a price or value is to helping them overcome objections and helping them. We're a real estate solutions company. If price is what you're needing, we're not here by. You know, we can help you, we can help you sell this house. We can help you sell it quick. And so we want to know what is their problem and we just help them overcome it. And then we just talk numbers. You know, we get really good at running numbers and making offers. We always tell them, Hey, you know, It takes us a good 20 to 30 minutes to, you know, do some underwriting. I don't want to, I don't want to take up your time. Do you care if I call you back later? So we always do a two step closed process where that first phone call is not about negotiating. It's just building some rapport right there on the first, right there on the first phone call. We've pulled up the house. We're doing what's called price anchors where we'll talk about a couple of different properties that sold recently for cash, let them marinate Price anchors, which is really just you know, let's say their house is worth 150, 000, but we saw a house that sold for X amount, we'll say, Hey, you know, Mr. Stella, we noticed this house sold for 50 K. What are your thoughts on that? It's not an offer. We're just seeing how they respond to it. And then we say, Hey, can we, you know, can we call you back in 20, 30 minutes? Let us do some underwriting and we'll call you back. Call number two, super simple. Hey, this is what we came up with. Does it work? If it works, we write it up. If it doesn't work. It turns into a follow up. Anybody can do that process. I know it's, I just spent a few minutes talking about it, but. I wouldn't even get caught up in any of that. If you're not just making the calls, just pick up the phone and say, do you have a house you would sell and just start with that. I've the script, the process I just told you, we've probably done over, you know, a few thousand of those calls this year but if you're not. If you're not just picking up the phone saying, Hey, do you have a house for sale? There's no need to worry about anything past that.
Mike:What made you guys decide to do the mostly virtual model versus going out to the houses?
Justin:We go across the whole state of Arkansas and I'm not driving six hours to go see a house. So we, we do have boots on the ground. Like if it's a house that we need photos, we, you know, we can get local realtors to take photos. We've analyzed enough deals that if somebody tells me about the house, I can, Probably on that first phone call, tell you what it's going to cost to fix it up. I mean, if we're in a classy neighborhood where most houses are built in 1990, and the seller told me they've lived there for 30 years and they haven't done any updating to it, I'm already assuming a full rehab. If the seller told me the house was built in 2015, you know, I might look at a library, you know, you can just ask questions like that. We have a set list of questions we'll go through with the seller and the virtual model just helps us, you know, we, we can analyze without actually seeing the house. So that's, you know, if you're out there and. Thank you. No virtual models. Not possible. It is possible.
Mike:Yeah, what do you do? And I don't know. Like, Arkansas, the market that well, but, like, how do you know what if you can offer in different markets, like, for example, in, like. You know, around where we are and like maybe in Jacksonville, like Duval County, there's a lot more kind of investor demand. So I know I can offer, you know, if I'm going to wholesale and I could offer stronger here than I could offer somewhere that's kind of more rural, which is a lot of stuff that we buy personally. But how do you, like, how do you know that across the whole state? I feel like that's a lot of like territory to cover.
Justin:Yeah. So, so there's, that's why we do the two step close process. We want to let the sellers, Hey, give us a little bit of time to go do some research. So we had a property. And Waldron, Arkansas. We've never done a deal there. Seller called us. I did some research, I talked to several different realtors. I learned there's no Walmart in this city. There's no activity. And so the more I start learning, like we get really good at market analysis, like, you know, put me in any city in the us. I'm going to call five different realtors. I'm going to go call all the property managers. I'm going to go to Zillow, see any flips that recently sold. I'm going to call those realtors, you know, just doing research. And then so like when we get into a new city, you know, we might come across a lead, like, Oh, we haven't done this city yet. So I let the seller know, Hey, give me, you know, give me the data. Make some calls, do some research, you know, if it's not a hot lead, I'll call that seller back the next day. If it is a hot lead I might speed the process up, but, you know, we just have to do a little research and, you know, we have a platform called prop stream where we can see everything that's sold recently. So, you know, if I see six other cash sales that sold for XML, then I. I know there's investor activity there. So I might, you know, I might make what I call a ballpark offer. Like, Hey, Mr. Seller, I saw these properties sold for X amount. You know, are we wasting your time? If we call you back to similar offers and we've had people say, yeah, don't call me back, or we've had people say, no, call me back. So there's a lot of that happens. And so, but to answer your question, it's just, that's why we do the two step closed process. It gives us the time to do a little extra due diligence. And we do have cities that, you know, we're like, if a lead comes across, we're not even, we don't want it. We, and that's just, that's part of, that's part of trial and error. We make a lot of phone calls and because of that, we know which cities to stay out of. So.
Mike:What would make you want to stay out of one of these cities?
Justin:Like there's a maybe we just don't see a lot of activity. Maybe we don't see a lot of investor activity specifically. Maybe they've got. The average resale is at a certain price where we're like we don't want to do anything because Stuff it's just crappy houses that are selling maybe low income houses we don't want to deal with just making a couple bucks off of a house that took us two months to wholesale like Anything we wholesale we're like we want to be able to find a buyer in a few weeks we don't want to if it takes us two months to find a special buyer because There might be a buyer out there for that. We're not wholesaling that so it's just I wish I had an exact answer off of these are our metrics, but we don't really have metrics. It's just, it's a lot of trial and error. I think the moral of the story is like, go take action. Cause we're, our processes just take a lot of action and constantly tweak and pivot.
Mike:Gotcha. And then how are you handling dispositions being across like an entire state?
Justin:Yeah, we have the investor lift platform. For Dispo we, it's really good for just, you know, if you're trying to Dispo deals statewide we cold call a lot of buyers. We go in there and like, if we get a neighborhood that we haven't done a deal yet we'll go call every single buyer in that neighborhood and say, Hey, we noticed you bought a property. Would you be interested in buying this one right down the road from you? So. A lot of, we have a virtual assistant that does a lot of cold calling and we're on the phones too. I mean, dispositions is the same thing as acquisitions. If you're not as a wholesaler, if you're not making the calls, the business isn't going to work out for you.
Mike:Gotcha. No, that makes sense. Oh, you know, we were talking about offline to that. I wanted to hit is local banks. You mentioned that for your rental properties, you work with a lot of local banks when you go to do the refinance and could you maybe talk about how that process is a little bit different than maybe going to one of these national. Lenders.
Justin:Yeah. I mean, we've done some national banks cause for whatever reason, we had some bad deals that, you know, we couldn't secure. Local financing, maybe they just had certain parameters. So we went to a little more aggressive lending with some national stuff, but local banks, in my opinion, are always going to be the best lending terms, like for the burrs we've got every single rental property we've bought is just, You know, we've got a, we've got an Excel sheet. We call a bank, say, Hey, can we talk to the guy that lends on cash out refinances or any DSCR loan for investors? And we send them our information. They let us know their terms and we put it in an Excel sheet. This lender offers this, we call the next bank. You know, we spend all, I want to say during our first few rentals. In that specific city, we called every probably 30 different banks. And we just said, we're going to offer the most, the best terms. And we said, all right, let's pull the trigger with this bank. And. As you get more familiar with certain cities, you know, we don't, you don't have to do that every time. Cause now we were constantly checking rates and which banks are doing what? Like we had a bank that was doing 85 percent cash out on a 25 year term. And we were like, we're set. And last year for whatever reason, they said, we're not doing those anymore. They just cut off, they cut us off. They cut us off and said we're not lending to anybody like this. So we had to get back on the phones and call several more banks. We found another lender that did a cashout, but they were only at 75 percent and that threw us for a loop because we were analyzing stuff off of 85. So we had to pivot and say, okay, now we gotta change our offers if we're buying it as a rental. So there's a lot of that happens. It's, I mean, but it's the same thing if You know, make the calls, call every bank and ask them what their terms are. I mean, just like I said, when acquisitions and dispositions, you just got to make the calls and talk to every single lender out there and find the one that works best for you. Cause my first real estate investment property was a duplex. I house hacked and I had three or four lenders tell me no. And finally we found a lender that said yes, because it was my first deal. Nobody wants to lend to a college student with no income. So you just have to. Get used to getting told no and go call all the lenders out there until you find somebody that maybe they're lending capacity. They're a little bit more hungry to get a deal out there. So, there are, I mean, people, you got to know how lenders work. There are lenders out there. They don't, they're not going to go work with the average Joe. They want. They want a deal handed to them on a silver platter. They don't want to have to do any extra work. And then there are lenders out there that are new and building their clientele. They'll lend to anybody. They just need their first deal. Not every single bank follows the same protocol, same procedure. You know, they've got national laws and stuff they have to follow, but they've all got different terms and you just have to find the one that works. I think that was my biggest learning curve. I thought if one bank said no, then all the banks are going to say no, but that's not true.
Mike:What are the terms that you're noticing are better when you're working with the local banks versus like a national lender?
Justin:A lot of national lenders biggest thing I've noticed is like there's prepayment penalties, like, hey, if you sell this property in under five years, you know, you got to pay a prepayment penalty, whereas like local banks may not have that. Like we've got a local bank. It's called a 2 1 meaning in year one If you sell it you owe us 5 percent in year two You owe us 4 percent and year three you owe us and it just keeps going down. Whereas with like local banks I've never heard of those penalties and stuff. I mean, I don't notice I've only done a national bank once For a little portfolio loan where we refined like four properties together. So I wouldn't say I've got enough experience to be like, Hey, these are all the differences between national banks versus local. We do use a national bank for like our flips. We might use like a bridge loan to this bank called Kiavi. Or like llama one or dominican. I think that's another one But kiavi is like a main national lender that we use for like bridge loans if we're doing the flip
Mike:Gotcha. Are they are the terms of the loan always shorter with local banks? As you mentioned, like 25 years, I think you mentioned 20 years at one point, are they ever 30 that you've seen with the local banks or?
Justin:I so that's a good question. I do have a national lender that's doing a 30 year for us But they're only doing like 70 percent cash out all my local banks, mostly 20, maybe 25 if you're lucky. But I don't know if that's a coincidence or I don't know what other markets are, but I don't see 20 to 20 more than 25 at most. I haven't found a local bank that does 30. So I don't know.
Mike:And you guys are, I guess, well, cause you're buying, you know, you're buying them direct. You're able to still make the numbers work with a 20 year loan or a 20, 25 year loan.
Justin:Yeah. I mean, my market's very unique because the, you know, the home sales are a little like that, I guess 150 to 250, 000 is like the resale value and some markets, you know, in your market, you're probably starting off purchasing houses at that price. Well, I guess if it depends on like, if you're doing like, Some higher end flips. But for us, like if we're buying houses below a hundred thousand, we know that most likely going to cashflow as a rental when we refi it out. You know, like I think I have a, I know a guy that's in Nashville, Tennessee, and he's like, I can't find anything that's going to rent, but. Everything he's buying is above 300, 000, but rents are maybe 2, 500. And so it's just very market specific.
Mike:Yeah, you were saying you only keep a rental if it's a homerun deal. So like, how do you define what a homerun deal is?
Justin:A home run deal for us is because we do the burrs, can we buy it cash? And then when we refi it, pull out the wholesale fee, which is like 10, 000 is kind of our average wholesale fee. So if we can pull it out, if we can pull it, if we can do an actual cash out. Where we buy it at a deep enough discount cash out 10 K to pay our wholesale company. And it meets the DSCR requirement, you know, because if we're taking it to the bank, they're going to, they're going to praise it. They're going to look at cashflow and they're not just going to lend on anything. Most, most local banks aren't just giving you straight LTV like, Hey, here's straight 80 percent of LTV. They're going to also look at, you know, what's called the debt service. Where you just got to plug that in and then they'll lend based off of that. So we just got to make sure it meets those numbers.
Mike:Gotcha. We were also talking a little bit offline about, you know, mindset stuff. You want to share about some things that you do for mindset?
Justin:Yeah. Let me think. I think specific to the real estate business mindset wise, you just, you can't take things personal. Like you just have to call. A lot of people in this business you just have to get used to getting told no. And you have to almost get numb to getting told no. And so mindset wise it's hard. Like I remember when I first started. I'll get told no in the rest of the day. I want to go watch Netflix and I did have days like I don't want to say that out loud, but I would have somebody to me out and I'd be like, I'm not picking up the phone again. I'm going to go play on my phone and watch Netflix. I need to recover. Maybe you can play around a golf. Whereas now somebody tells me no, I hang up. I'm just moving on to the next phone call. Whatever it is. They had a bad day, whatever I need to make the next call. I'm very clear on how many calls I have to make each day. And I can't let somebody telling me no affect me, you know, meeting my KPIs every day. So that's really the biggest mindset thing is just don't take things personal. I read this book. And I wish I could remember the title of it, but he told a story of his sales team. They were given out an award for the person that got the most nose. It was like this big thing. They celebrate it like, Hey whoever gets the most nose, we're giving you a paid vacation and a trophy. And this was a quarterly an annual event. And the guy that got told no to moat, no, the most, he goes up there. He grabs his trophy. He sets it, he goes back, sits back down. And he sets it to his other trophy. Do you know what the other trophy is?
Mike:Most money earned.
Justin:Yeah, for the most sales. Yeah. So for the guy that also made the most sales, so long story short is that all of that cold, no, the most also did the most sales. And and so I just always remember that story of just don't be afraid to get told no, just kind of that mindset shift of like, they're not saying no to you. They don't know who you are. And They just, that doesn't define you as a person cause I know with me, it's, it's very easy to get caught up in that, that mind battle of, am I meant to do this? Like you can go three or four months without getting a deal. And you just gotta have that mindset shift of like, you gotta keep going and you're gonna, you're gonna get that first deal. Like if you're trying to get that first deal, yikes. Forget what it feels like you got to set your emotions to the side and just go make a lot of calls and a lot of offers. And just remember that story of like the guy that got told no, the most also got the trophy for the most sales. Uh, I think that's probably the most applicable mindset thing I could probably say in this business. If you ask anybody around me, I could probably ramble too much about mindset stuff. So I'll try to stop there.
Mike:Well, I'm curious because I do a lot of mindset stuff. So, I mean, what other things do you do, whether it's even related to the business or just personally.
Justin:And just really trying to keep God first and I know it sounds kind of cliche, but man, I, for me, what keeps me motivated is still in purpose. I have, I feel like I have a purpose to go change people's lives and financially speaking, like, I feel like God's put it on my heart to go make a lot of money so I can give away a lot of money. I feel like if I'm not keeping God centered in my business, it's, I don't my wife for my first flip, she, I gotta move my printer out the way, but she wrote this verse for Psalm 127 and 1, I keep it hung in my office, but it says, unless the Lord builds the house, the builders labor in vain, unless the Lord watches over the city, the guards stand watch in vain. And what that means to me is, you know, if I'm going to build this massive business, I want God right there next to me. And I don't want to build it without him because anything I build without him, I got to maintain on my own. And I'm not, but something I can build with them. I've got him helping me keep it up there. And just my, I'm a Christian and my mindset on just keeping God right there. Center is huge to me. So I know there's a lot of people out there that, Might think I'm crazy for saying that, but that's just my story.
Mike:Gotcha. What is your vision for your business for? Let's call it the next three years.
Justin:My, my vision for the business you know, I started this for the freedom, you know, most people want to get into it for the time freedom and buy back your time. So hopefully over the next three years you know, like I said, I'm in that mastermind. With seven figure flip. And so I've got people that they're levels ahead of me. And so I've I'm watching other people have conversations, like they're talking about hiring their CEO so that they can get their freedom back. And so I would love to see this business at a point where maybe I'm having conversations of hiring a CEO to buy back my time and, Question that was the business's vision selfishly, that's not the business's vision. That's my business. And the reason I want to clarify that is. Is if I'm going to hire people, I can't hire them based off of what I want. I need them to buy into something. And this is something that my coach was talking to me about. Cause he asked me the same thing. What is your business's vision? And I said that, and he was like, well, that's selfish. He was like, you can't hire people and that'd be their purpose. And so there was a, it was kind of cool because my business. Needs to have a separate vision from what my personal vision is. And so my business is a full solutions, real estate company, helping each and every homeowner get out of a solution, getting out whatever solution they are. So hopefully in three years, we're helping 10 to 15 homeowners every single month. That's our specific vision for the company. So like, if you're trying to build a vision for the company, like what's that thing that when you hire people, they can buy into it And say, I'm helping 10 to 15 homeowners every single month. If I hired somebody and they said, I'm helping Justin reach financial freedom, that's selfish. And that's not how you build a company. You know, don't get me wrong. That's my personal vision. I'm using my company to get there, but what is the visions of the company? Sorry, I was, I kind of. There's a two part question, answer to that question. But that's just, you know, that's just, that's something that my coach was teaching me. And so we've just getting super clear on like, what's your vision's company.
Mike:Yeah, what does your team look like today? Yeah.
Justin:we, so last year we had almost 10 people. So the size of the team has nothing to do with how efficient you can be. We've actually scaled down what I mentioned to get more efficient, but it's a team of four right now. I've got me, my partner acquisitions and virtual assistant. So, and then I don't really. Include the contractors and realtors as part of the team. That's more of just like services that we work with. But I mean, we do have a contracting crew of people. We keep busy in our realtor. We keep busy, but that's not my businesses team.
Mike:Gotcha. So what is your current role in the company? Like today.
Justin:I'm making calls every day on dispo and acquisitions with my, I mean, I'm, I'm, I've told the acquisitions guy, you better not out down or you better not let me out dial you. Um, so it's not a very big team, but we're just, we're there every day making calls. And I eventually I want to hire, uh, you know, another acquisitions guy, maybe, you know, kind of work my way up to the sales manager, to the cause I think that was one of my mistakes early on is. I own the company. So I was like, I'm the CEO. I don't have to make calls. And that's how I got in the cash line. Kind of one of the things me and my partner talk about is we're, you know, we're employees of the business. We haven't earned the right to be the CEO until we reach certain goals. And once we reach certain goals, then we'll kind of put that CEO hat back on and then talk about hiring. So I think that's where a lot of people mess up in building a business is I'm the CEO. I don't have to make calls, but that's so false early on. Like you're an employee of your business. You go make the calls.
Mike:Yeah, no, that makes sense. How did you how did you hire your acquisitions guy? I'm always curious how people are building their sales teams.
Justin:Yeah. I mean, it's so we've got like this funnel through Trello. You know, they jump through a couple of different hoops. So, something or we've, we're really big on is what we've kind of started implementing recently is just sending them through the call for index, their personality like, do they match up as a sales guy? And then when they're jumping through those hoops through the hiring process, like, are they doing X, Y, Z on time? And they make it through the funnel and we set up interviews. We like them and give them this skeleton script to make the calls. If they do good on that. Like, are they, you know, we say, Hey. Whatever your goal is, if you achieve that goal during the, like when somebody's hired the first 30 days, you're not actually hired, like, it's very clear, Hey, if you can't even make, you know, your calls every day, you're not going to continue with us past 30 days. So that first 30 days is always a, they got to prove themselves and stay on it. And but yeah, there's some tactics in the funnels and like making them jump through hoops to see if they're going to, cause they're not going to jump through the hoops during the hiring process. It's not worth it.
Mike:Are some of those things that they have to hope they have to jump through? Yeah. Yeah.
Justin:yeah, I mean, for example, if it's on Indeed, you know, you've got the resume. And it says, you know, send in a video of yourself talking about, you know, who you are, why you went there, this job that can be like the first hoop. If you're not willing to just take a few minutes to do that, then how do I know you're going to, because you know, a lot of the acquisition guys are bad at detail and which is nothing wrong with that because their sales guy, they're go getters But they, there's still a detail side to it, updating your notes in the CRM and filling out paperwork when you get a signed contract. And so like, as a sales guy, if you don't want to go take a few minutes to send in a 30 second video, how can we trust that, you know, you're also going to update your CRM. And so it just kind of filters out a lot of what, who's going to fit our team.
Mike:Yeah. Gotcha. Well, we're we're getting close to the end here and there's always two questions I like to ask at the end of every show. First one's kind of fun, which is what is the craziest or most uncomfortable situation you've ever experienced in a real estate deal?
Justin:Yeah. So we actually had a deal that. Every law is a little bit different when the spouse passes away. This was a deal we did in Louisiana. If a spouse passes away, 50 percent goes to the heirs, the children. And so, this specific deal, we were talking to the wife, the husband passed away. Apparently, this was his third marriage. He had like six children from I'm sick. He had like six children from two wives ago. So when he passed away, there was no will. So 50 percent goes to these six children that the wife has never met. And we, she was like trying to sell our house. And she's like, are you telling me I got to give up 50 percent to these six children that are ungrateful and I've never met. That was wild because we were just, I don't know that we always talk about that deal, how. We're a full solutions, real estate company. And what we had to do is we had to skip trace, find all six people and be like, Hey you, your grandfather or your father, whoever not your grandfather, but your father had passed away and he's married to this new lady who gets 50%, but you get 50 percent cause it's naturally went down to you. So very long process. We helped her sell her house, but it was just wild. We always talk about like, could you imagine, you know, your husband passing away and you're just trying to get out the house and you got six children. You got split with it. You've never met, um, stories like that happen, but we helped her get out of a solution and it was a very tough process, but we were, we just always thought about like, could you imagine just having to split 50 percent of your house that you lived in? You've never met these children. Moral of the story is. For the grandparents go make a will make a will. So that doesn't happen.
Mike:yeah, wow. That's crazy. That's a crazy law. That's insane.
Justin:yeah. So automatically goes to the heirs if there's no will in place. Like I said, every state's different. I don't know what other states were are, but that's what the Louisiana law is
Mike:Gotcha. Well, the second question I always like to ask for kind of people who are new or listening to the show, which is if you could go back in time and give yourself one piece of advice when you were looking for your first deal, knowing what you know now, what would you tell yourself?
Justin:You know, there's, I keep saying make those calls. That could just really, it's take action. You know, some people get deals by sending direct mail and you don't have to make calls for that, but it's just take a massive action. And if you mess up, Oh, well. You're gonna, when you mess up, you're gonna get a lot of feedback on what you have to do different the next time. So, you can read all these books, but nothing's gonna give you the feedback that life gives you when you mess up. And that's the best book to read in a sense. So I would, I wish I, I could have, you know, told myself to toughen up a little and don't be afraid to go make more offers. Because if you get told no and your day's ruined, you're in for a rude awakening if you're gonna try to grow a business here.
Mike:Yeah, that's a great piece of advice. Justin, if people want to reach out to you after the show you know, maybe they're interested in asking you some questions or maybe they have some deals that you can buy off them. How can they go about reaching off to you? Out to you.
Justin:Yeah, if you're sending me a deal, send it to my email justin. thehousebuyer at gmail. com. I'm always checking deals there, or you can DM me on Facebook or Instagram. I think my Instagram name was on here, Justin Tave. I don't even, I guess I don't know what my, yeah, there it is. I was gonna say, I don't even know what my Instagram name was, but. Yeah, there, or you can either I've even got a phone number for work. My work phone number is(870) 729-8704. That's my that's my deal phone number. So that goes straight to my CRM. If you text me a deal, my will most likely get back and look at that deal very quick. So, or ask me a question, but my VA's gonna be reaching out to you if she sees that question on the CRM.
Mike:Well, awesome, man. Well, thanks for being on the show.
Justin:Yeah, absolutely.