How to Thrive in Any Real Estate Market – Kent Clothier

Mike: This is the Flipnerd.com Expert Real Estate Investing Show, the show for real estate investors, whether you’re a veteran or brand new. I’m your host, Mike Hambright, and each week, I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility and taking control of your life and financial destiny, you’re in the right place.

Hey, everybody. Welcome back to this episode number 310. My guest today is Kent Clothier. Kent is one of the most well-known voices and investors in our industry in the real estate investing industry. He’s the CEO of Real Estate Worldwide, 1-800-Sell-Now, and he’s behind some of the industry’s most popular and leading products to help real estate investors. It’s going to be a great show, you want to stick around.

We’re going to talk about how to thrive in good and bad markets. And if you’re not, if you’re not thriving right now, Kent’s going to share some advice on maybe how to take a different approach. A lot of what investors are dealing with right now if you’ve been around for a while. It could be some mindset issues, and potentially even maybe need to shift to your exit strategies a little bit.

In the second part of the show, the taking action segment, we’re going to jump into some tactical things that you should consider, things you can do right now to see the growth you’re looking for. Kent’s a great guy. He’s become a good friend of mine. It’s an inspirational show. I hope you join us. Please help us welcome Kent Clothier to the show. Hey, Kent, welcome to the show, my friend.

Kent: Hey, man. Thanks for having me. Glad to be here.

Mike: Yeah. Good to see you. I’m excited to talk about the topic we’re going to talk about today because a lot of people feel this competitive pinch right now. The market’s changed and so it’ll be good to talk about strategies and things you can do. A lot of it is mindset. I know you’re going to talk about that, to thrive in open down markets in buyer and seller markets. Before we jump in, for those that don’t you, which is probably not very many people anymore, you’re a rock star mans, but tell us a little bit about you, and your background and what you’re doing today.

Kent: Yeah. Well, I own a company called Real Estate Worldwide that is an education company as well as a software company. We have some of the, I guess, probably most well-known software products out there in our industry as far as Find Motivated Sellers Now, Find Cash Buyers Now, Find Private Lenders Now, Our Smart Program. These are all things that people have used over the last few years to just be really successful in driving leads. And then my family and I own a business called Memphis Invest, which is arguably one of the largest turnkey operations out there buying and selling roughly 650 properties a year and have been for the last . . .

Mike: That’s awesome.

Kent: . . . long, long time. And I have two sides of our business that are continuing to thrive to this day.

Mike: Yeah. Talk a little bit about . . . I know we’re going to get into this, but what people do . . . I think you and I both know that when you’ve been around a few cycles, you start to realize, “I need to shift gears.” That’s why some people wholesale more in other markets and they rehab in other markets. Some people might keep more rentals in some markets than others. But just the importance of having different . . . it’s a cheesy cliché, but different kind of tools in your toolbox to navigate different markets.

Kent: Yeah. Totally. Well, I can tell you what I hear the most. I hear a lot of people that they get in their own market, and it might be getting competitive, as we both know, that inventory may be getting tight or whatever, and then I’ll get hit up whether it’s on social media, on a YouTube video, whatever and they say, “Hey, Kent, should I do virtual wholesaling? Should I go to another market?” All these kind of questions, and so maybe just talk about that for a second.

Listen, the difference between whether you or not somebody should be doing that up market, down market, sideways, whatever, there’s a big difference in perception and reality. And I have a tendency to just focus on what the market actually tells me versus what I believe in my gut. I’m a really, really good real estate investor. I’ve been doing this a long time. I’ve literally bought and sold now almost 4000 houses in 10 years. And I still don’t have a freaking clue what the market’s going to do from day to day.

So if I don’t know then I absolutely know that an investor that has been in there for a couple years and done 25 deals, they have no clue. Now, they may believe they do, but I’m just telling you they just don’t. The facts are just simply what they are. So when somebody asks me a question like that, my first answer is, “Go to the data. Go into your market right now and just deal with the facts. I had a guy ask me a few weeks ago about an area in Kentucky. And his perception was, this guy was doing 25 deals a year and he wanted to do 25 more, He wanted to get up to 50. But his perception was there were no deals being done. And so he was talking about Louisville, Kentucky.

And I was like, “Okay. Let’s just go look.” And sure enough I go into our cash buyer database, and I show him right there in the data, that there were 1700 cash transactions in the last 90 days. And so I’m like, “Okay. So let me make sure I got this. You’re trying to do two extra deals a month. Here are 1700 in the last 90 days basically an additional 550 every month. I’m pretty sure you can squeeze out two out of that additional 550. So why don’t we just become a lot better at going after the deals that are there because they’re obviously being done.” The only way it gets into a cash buyer database is through public record. So we know the transactions happen.

So my point is I think people are easily distracted. They’re looking for, in a lot of cases, an easy way out, or an easier way out. When in reality they just deal with the facts. More times than not, when I see some of that wants to grow your business, let’s just say it’s 50 transactions a year. So that means you want to do four a month more than you’re doing right now. And so most people, they heard, “I want to do 50 more.” That’s life changing.

Four a month, when you actually look at how many cash transactions are going on in most markets, I get it there are some smaller markets, but in most markets, figuring out how to do an extra four in the market you’re sitting in, good, bad, up, down buyers, some market seller, if the data supports it, if there’s hundreds and hundreds of transactions happening could you get four? Yes. Are you going to be better? Are you going to have to market more? You’re going to do some things that may not seem as sexy as moving over to another market? Absolutely. But, man, let’s just deal with facts versus some of the nonsense that goes on out there. Because I literally see it every day. I get asked this question all the time.

Mike: Yeah. There’s this quote that I don’t even remember the exact quote, but it’s usually, “Whatever got you to where you’re at might be a different skill set than what you need to get to the next level.” Different skill set with different mind or different way to think. If you’re trying to . . . you may have to change your exit strategy a little bit, you may have to do some things a little bit differently, but there are still deals there right?

Kent: There’s a ton of deals and you’re exactly right. The hustler mode that you’re in when you’re out there just trying to pay the bills, when you’re trying to get there and do your first deal, do your first 10 deals, whatever, that way of thinking is never going to serve you as you’re trying to actually look at your business and move it into the entrepreneur mode where you actually become a business owner. And you have to start thinking more strategically, and you have to be more effective with your techniques and your strategies, and your systems, and your processes. The Hustler mode, grinding go, go, go, go, go, chase after this dollar or that dollar, it gets you to a point.

But, to your point, the next level something completely different. And you have to be nimble. I’m not arguing for a moment that you don’t have to have a lot of . . . that you don’t have to hone your skills, and you don’t have to be absolutely aware of your market, and you don’t have to be prepared to move, and zig and zag. You have to do all that kind of stuff. But you don’t have to be easily seduced by, “Is there another market? Or should I go and do rehabbing? I wonder if I should go learn short sales. I hear this whole thing about crowdfunding over here. Our next, next webinar, what’s going to come out this week?” The whole point is to get into your business, get the facts, understand exactly what you’re going to do and how to do it, and then just work backward, and say, “This is what’s going to take.”

Mike: Right, right. Let’s talk a little bit about mindset. So you have a mastermind. I’m in CG, which you’re part of as well. So sometimes, I think the people that people surround themselves with, they may say, “I want to double my business,” but they may not be willing to do what it takes. Or they may have a mental block. They think they know, but they just can’t get there.

Talk about the importance of maybe surrounding yourself with other people that . . . because when I joined CG, for example, everybody that comes in there and probably your mastermind, thinks they’re the big dog, and then you’re sitting next to a bunch of people that do 10 times what you’re doing. And you’re just like, “Okay. Well, I think that guy’s not any smarter than me, but he’s figured something out here.” And it just elevates your game to surround yourself with. Maybe talk about the importance of that a little bit.

Kent: Yeah. I can’t . . . honestly, I know you feel the same way. I could not stress enough the importance of the people that you surround yourself with. You are a product of your environment. End of discussion. And you don’t take that very, very seriously. And you don’t actively work to surround yourself with the best of the best, of the best, then think again. Go back. You are a reflection of the people you surround yourself with.

If you’re surrounding yourself with mediocrity, if you’re always the big dog in the room and surrounding yourself with a bunch of people that just constantly look up to you, or are latching on to you, but you’re not really gaining anything from being around them, then you have effectively just sealed your fate. And so if you want to be the best, go surround yourself with the best. Humble yourself. As the saying goes, “If you walk into a room and you’re the smartest guy in the room, you’re in the wrong room.” And it’s that simple.
Masterminds, mentoring, to this very day, and people are shocked when I tell them how much money I spend and I invest in my own . . . I have two mentors that mentor me at this level. I’m doing millions and millions of dollars, but there’s always somebody bigger. There’s always a bigger dog and you can always learn.

Mike: Yeah. Michael Jordan, Tiger Woods, all those guys are surrounded with coaches and people. And people just assume, “Well, who could teach them anything?” It’s like, man, you have no idea how that business really works.

Kent: Yeah. If you are really committed to the process and being as successful, and I’m talking about all areas of your life, right?

Mike: Yeah.

Kent: Think about it if you want to go drop 50 pounds and you want to get down to 8% body weight, and you want to go run a triathlon in the next 12 months, what’s the very first thing you’re going to go do? You’re going to go hire somebody who can teach you and show you how to do those things. Business is exactly the same. If you want to achieve greatness, then really, really push yourself to be very humble, check your ego at the door, and go and seek out people that are living the life that you want to live. It’s that simple. And I will promise you, anybody that’s listening or watching, the more times you do that, you will see a continual growth in your business over and over and over at every level.

Mike: Right. Let’s talk a little bit about market cycles and changes, and just the importance. So I’ve ultimately only been an investor for eight years. I’ve bought hundreds of houses, and I’m really . . . I’ve lived through a lot of the stuff, but I haven’t been around as long as you have and a lot of other people. I’m not saying you’re old, by the way.

Kent: [inaudible 00:11:34] What the hell was that?

Mike: If this camera did zoom in on my hair, you’d see it’s turning gray. Just talk a little bit about investors preparing for shifts in the market because there are people that have been saying we’re going to see a downturn for a couple years.” There are people that think there’s going to keep climbing so I can buy a little bit tighter because I think by the time I’m going to sell it, it’s going to be worth 5% more or whatever. But I think the biggest thing that people learn in the last downturn, people have been around for a while that learned is to always be a little bit cautious, but always be trying to look around the corner of what could or what’s going to happen instead of risking it all, and going through booms and busts.
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So always be a little bit cautious, but always be trying to look around the corner of what could or what’s going to happen instead of risking it all and going through booms and busts.

Kent: Well, here’s the best advice I can give everyone to come to your point. I’m 46. I . . .

Mike: You’re kind of old.

Kent: Yeah. I’ve been through a massive recession in the real estate business and I’m still one of the few that got on the other side of it and still here, thriving and going. Although, I came about as close as I’d ever want to come to losing it all again, for the second time. It didn’t happen. And I think part of the reason that didn’t happen is because I learned something through the first time in my life when I absolutely did lose everything. I lost an entire business a multi, multi $1.8-billion-dollar-business that just got flushed down the toilet.

Here’s what I’ve learned through all that, is just that you’re never as good as you think you are. And just remember that. We have amazing capacity as human beings to convince ourselves of just about anything and justify just about anything. And ironically, when you start believing your own BS is about the time that you’re going to get hurt.

So don’t go out, and I would never buy any property for a long-term hold that is not currently cash flowing. Period. You buy for today’s state. If it makes money today and in the process holding it, you’re making money day one, then that’s probably a sound investment. If you’re banking on some kind of appreciation of the market going up, and “Oh, but my market’s different,” those are all the things that broke people tell themselves and end up getting broke. That’s what happens.

When I was the greatest investor in the world, when I was down in Florida and buying on appreciation, you go see that movie and I was that guy. No qualifying, 100% mortgage on a piece of investment property, and literally would buy it and at market price, and inside of 30 days, it would increase in value by 10% because of the interest rate. And so I was the greatest investor in the world, just ask me.

And, unfortunately, what happens . . . and that’s what I’m saying. You could convince yourself of anything. Unfortunately, I got caught and I got caught in a really bad spot and the market tanked and the next thing I knew, I’m dumping property, sending properties into foreclosure, doing all kinds of stuff that I never thought I would do, basically grasping and holding on to it. And what I mean by “that’s all the stuff that broke people end up telling themselves,” is because that’s where you end up.

When you find yourself telling, you end up being broken. You end up being in a situation where you’re just grabbing on for dear life, hoping that all of these crazy decisions that you make don’t take down the entire ship. It’s really difficult to grow a business and run a business when you’re just trying to keep the business from dying. And so the big lesson in both of those cases is just you’re never as good as you think you are. Just buy based off current state, run a good cash flow business today that’s returning an investment each and every month and you’re going to be fine.

Mike: Yes. So there’s a case there, obviously, for keeping rental properties because if the cash run out today, you’re going to be fine as the market cycles up and down. Wholesalers usually don’t have to worry about stuff that much because they’re not holding onto a property for long enough for the market to tank. Rehabbers are the ones that usually get hurt in that instance because they’re holding it for a little bit longer. But any kind of key lessons there based on . . . mix in what you just talked about and exit strategies, and what you learned about . . . it was it like, “I should hold some more or . . .

Kent: I would definitely hold some more. There are only two things I would be focused on when you see this stuff going on. And again, this is just personal preference. This isn’t a shot against rehabbers or anything like that. Because there’s certainly a lot of money to be made there. But personally, I primarily wholesale and it’s because it made me extremely gun shy to go through all that and we figured out how to build a big business by quickly turning properties. If I were just turning one a month, or two a month, or whatever, we would be . . . I probably feel very differently.

The reality is when did you turn 10, 20, 30, 40, 50 a month, it’s a business now. And the exact same thing with rental properties. I buy rental properties every year, but the ones I’m buying are making money today. And I cannot tell you that I was doing that back in ’04,’05, ’06, ’07. I was buying properties and I was doing all the crazy stuff. Oh, 90% leverage on it, let me see if I can take a refi and get my money back out of it, and take a little money, I was going to do all the insane things because the market was just crazy.

And so as an older man now, I can tell you, speaking to some of the guys and gals out there that will eventually go through something like this, just remember you’re never as smart as you think you are. And the things that we were telling ourselves back then, which now you see in the movies and the books and the reporting and everything that’s [inaudible 00:17:44], we used to justify this by saying, “There’s no way they would give us this money, unless they knew what they’re doing. It’s a bank. It’s the government. They’ve got it, they know, and they come to find out they’re just as big a morons as we were.

Mike: Yeah they were just selling hot potatoes and other stuff like that.

Kent: Again, it’s amazing what you can justify and convince yourself of. And there’s no doubt the market’s going to turn. It will happen. Whether that’s in 10 years from now, or 15 years from now, or five years now. Who knows? And anybody who tells it that tells you that they know is just full of crap because you just don’t. But do yourself a favor and just focus on good cash flow businesses.

So in other words, if you have wholesaling that’s creating cash flow, and your rentals are creating cash flow, and then you’re peeling off one property here or there that you’re rehabbing, that one property, in all likelihood, is not going to take down the whole ship because the other sides of your business are cash flowing correctly. But if you’re not doing any wholesaling and all your rentals are basically buy and holds and I’m just going to wait it out for the next five years and that’s depreciation, you’re setting yourself up for sooner rather than later. You’re going to get hurt in that kind of business.

Mike: Yeah. Hey, Kent, I’ve got a question that I want to ask we got our Facebook. You’ve answered a little bit this already. So this is a question from Shawn Thompson. He asked . . . and he’s talking about competition too. He asks, “Investor competition is a major obstacle for many of us.” Could be a mindset we talked about right? “Are you seeing markets across the country that opportunities are greater than the number of investors able to take advantage of them?” So how do you identify less competitive and more competitive markets? And you’ve talked a little bit about virtual wholesaling type thing already, people operating in other markets. What are your thoughts on what you’re seeing out there?

Kent: Well, I don’t look at it . . .

Mike: Should people move to like less competitive markets? Should they . . .

Kent: It’s a personal preference. At the end of the day, everybody is going to do what they’re going to do. What I would tell you, based on the answer I gave before, is that there’s a lot of information that’s out there. If you did nothing more but just use one of our systems, specifically our cash buyer and private lender system, to just get the facts. And I guess you could use motivated sellers as well, but you could sit there and say, “Look, here’s exactly how many cash transactions are happening in my market. Here’s exactly how many vacant properties are sitting in my market.”

And it’s very easy just for a few numbers to establish what’s the opportunity, and what percentage of that opportunity are you getting on a consistent basis. What I have found time, and time, and time, and time again is that most of the time that people are asking me those types of questions, they are hardly scratching the surface. Meaning that they’ll come in they’ll say, “Oh, God. It’s so competitive I can’t get to it.” And then we go and do the due diligence, and like, “Okay. So you’re doing,” . . . like I said, “two deals a month and there were there were 700 done last month.” Okay. So you are significantly less than 1% of the market. I think there’s plenty of room for you.

And I would just say that just deal with the facts first. Now, when you’re dealing with the facts, if indeed you’re in a really competitive market. You’re doing 20 deals and there’s only 40 being done, and it’s getting tighter by the day, then look at neighboring markets and analyze in the exact same way I said. It’s going to be a lot easier, take it from us, from a lot of experience, where we moved an operation or we just set up an operation from Memphis to Dallas, and then Dallas to Houston.

And whatever you believe, the opportunities going to be and what your effort will be to take advantage of that opportunity, you can pretty much double it. At least in our experience. Again, we’re really, really, really good at what we do and we thought we had Dallas completely wired in, dialed in, we were going to go over there, and I know my brothers would tell you that it was a much larger undertaking that any of us ever had even imagined. And then we thought we had that figured out and decided to go do Houston and it was the same thing.

Now, in the end, did we end up being very successful at it? Yes, but we certainly underestimated, in every case, exactly in areas of what the actual effort was going to take. So all of the grass may look greener, there’s going to be a lot of effort and energy put in that. A mentor used to tell me all the time, “No matter where you go you’re still there.” If you’re running a business that’s not well organized and doesn’t have good processes and systems and all that, moving to a different market is not going to change that. You’re still going to have all the same issues that you have today. So I think you’ve just got to really, like I said, separate fact from fiction before taking those kinds of big steps.

Mike: Yeah. The grass always seems greener, but it’s always more complicated than you thought.

Kent: Oh, Amen brother! Amen!

Mike: Well, Kent, let’s jump into the taking action segment of the show, part two here, and I want to talk about maybe some tactics. Or let’s continue this conversation. So one thing that I’ve seen, I know people that have moved in other markets, and they’re like, they may say, “Hey, Mike, wherever I’m at,” I won’t name any specific cities, “but my advertising cost per buy basically I want to spend an advertising to get a good deal is like $5000 or 7,000,” but I go to this other market and it’s like $1000.

But what they have failed to miss sometimes is, “Hey, in that market, it might be much easier to buy, but then it’s harder to sell. Because it’s not as a robust of . . . so a market like Dallas, there’s a huge ecosystem of wholesalers, and rehabbers, and property managers. The whole ecosystem is there. It’s super-efficient or relative to what it might be in some other small market like Birmingham or somewhere else where they’re still buying houses at what we think are good deals off the MLS at those prices. So you’ve got to get in even deeper to pull in the wholesalers there.

Kent: Absolutely.

Mike: Any thoughts on kind of how your exit strategies have to change if you go into other markets?

Kent: That’s a good question. I don’t know that I really have a lot of thoughts about how your exit strategy is going to change, but I think you hit on a really good point that I think you have to fully appreciate the scope of the market you’re walking into. I think you nailed it on Dallas. And the end of the day, if you have the ability to plug into a market that has a lot of the economic factors working in your favor . . . So when we went into Dallas, and we were in analyzing on what we were going to do, we looked at it from a couple of different angles.

Was there some kind of partner network that we could potentially plug into? Would we be able to access wholesalers and bird dogs and realtors and network there that could bring these deals? Do our buyers want a bind in a market like that? What are the economic factors that are driving the demand for rental properties, and the demand for job growth? There are a lot of things that go into analyzing a market that have a lot more to do with the outcome of where you’re going . . . how you’re going to disposition a property, then just, “Oh, man, it looks good over there and my marketing cost is high over here. So let me go roll a dice and see what it is over and see if I can flip a property.”

Anybody that does that . . . and can you have success that way? Sure you can. Ready, fire, aim, but I just think it’s pretty careless and reckless, and ultimately you’re going to get burnt at some point. It might not be the first time or the second time, but at some point, that’s going to burn you because it’s just an expensive way to try to figure it out.

Mike: Yeah. Well, in terms of building networks, you talked a little bit about building networks. And I was going to ask you about just generally the turnkey model. You’ve got Memphis Invest. We recently started marketing arms for turnkey folks. There’s a lot of movement in that direction because rental properties are becoming more and more of a mainstream type asset class.

Maybe talk a bit about how wholesalers can work with turnkey providers and operators. Because in my experience, you guys do a lot in Memphis. I know that, but a lot of the turnkey type folks that want to . . . people want to work with them, buy from them for example. The challenge is always inventory. But there a lot of deals that are getting done outside of the turnkey operators. But maybe any thoughts on how wholesalers can work and align themselves with turnkey providers, or even consider that as an exit strategy?

Kent: Well, yeah. I would think that the turkey provider, if they’re of any size whatsoever, they’re probably going to be one of the largest buyers in the market if they’re actually providing a true service, not startup. So anybody that’s going to buy . . . I think in Dallas this year, we’re going to buy 300 houses. So anybody that has that kind of appetite, it’s the exact same philosophy that we have used time and time again with our cash buyer and reverse wholesaling strategy that we’ve shared so many times out there.
Just go align yourself with the biggest buyer. And then go help them acquire inventory. It’s that simple. It’s no different than a hedge fund, quite frankly. Somebody that has the deep pockets, they have the appetite, they can back you into exactly what they want to buy, the neighborhoods they want to buy, the bedrooms, the bath, the square footage, the price they’re willing to pay.

Just think about all of the brain damage that saves you as a wholesaler. There’s no crossing your fingers and hoping you’ve got a deal and throwing it against the wall and seeing if sticks. That’s just completely off the table. My big thing that I talk about over and over and over is just the element of time. At the end of the day, the one thing that none of us have to just throw away is time. It’s the one thing that’s ticking on all of us. And so suddenly, if you have a buyer that can save you massive, massive amounts of time, effort and energy and money, why wouldn’t you?

It would seem completely illogical to me to turn a blind eye to somebody, again, like a hedge fund or like a turnkey provider, anybody that has an appetite that you can come into. Because in most of the cases, at least in my experience, when an operation gets to a certain size . . . again, I would hate to compare a Memphis investor, even our operation to anyone near the size of like an institutional buyer like a bank. We’re not buying tens of thousands of houses a year. Any operation that size has its limitations. And in my experience, most of their limitations reveal themselves truly on the marketing inside.

In other words, they’re just not really good at going deep. They’re really good . . . and you’ve seen this in your own business as well. I mean they’re really good at going wide. Casting this really wide net and getting in a market just to bring a lot of stuff. And so your ability as a wholesaler to go deep, and go find a very specific property in a very specific scenario, at a very specific price range, it’s very . . . it’s unique. And you can suddenly turn around and create an automated process. Every time I get this scenario, this neighborhood, this price point, man, I just get it on, I got it on ring every time. The cash machine is going to get going.

Mike: Yeah. I would say it’s interesting because a couple conversations that I’ve had with you in the past and I think the last time you were on the show, which I told you at the beginning I forgot what number it was. It’s been so long ago. It’s been a while. But . . . and I can look it up, but I know we talked about . . . I know your philosophy, and I agree with it more than I ever have in the past. So the way I’ve been classically trained is to just buy deep and you’ll have no problem selling it, which is not a bad idea. You always want to buy deep.

Kent: It works. It works.

Mike: But the strategy of like, well if you have people lined up to buy from you, then you have a lot less risk because you know what you can pay and still make a respectable profit. So I think that’s where a lot of people, back to the mindset, a lot of people who have a struggle. A lot of classically trained wholesalers struggle in a shift like this because you have to pay more for houses than maybe you have in the past in a lot of instances, and it’s hard to stomach that, but it’s because you’re used to just buying deep and throwing it out there and you’ll find somebody instead of come after the other end of like, “Yeah, I’ve got to pay more, but I’ve got people lined up that are willing to pay more because of this market.”

Kent: Yeah. I get I get people ask me all the time, “Hey, what’s the MOA? Do you make offers at 67% or 61% of after repair value?” I’m like, “Dude, let me just help you. No.” I don’t do any of that. Literally what I do is I go out and I look in a database, and I see through public record. They cannot fake this. I go into public record and I see this is what people are paying in this neighborhood for this type of house, and this is what they’re paying cash. So if this is what they’re paying cash, that’s basically . . . nobody pays cash and pays retail.

I mean, that’s as discounted as it is out there right now. I engage people. I talk to those people, I figure out what their appetite is. Do they want to buy more or how much more do they want to buy? And I literally, because I can see the price they’re paying, I can talk to them and find out are they willing to pay the price, are they willing to pay more or whatever. I can back into my price because if I want to make $10,000 on a deal now, if I know they want to pay $110,000 and I want $10,000, then it’s pretty obvious the max I can pay is 100.

Anything less than $100,000 is just gravy over the top, but if I can buy a house in that neighborhood at that price, at $100,000, I got a deal. So all the other stuff is just pushed over to the side. Because at the end of the day, it doesn’t fit in that box, it doesn’t fit in that box. It’s just that simple. And I just think it’s a much smarter way, especially as a brand new investor . . . it’s much smarter for a brand new investor who’s so risk-averse and they don’t have any experience, they don’t know what they’re doing. They’re just trying to figure it out.

But even as a seasoned pro. A seasoned pro, this is the way to create, as I said . . . come on like an ATM. It’s like, here’s a way to churn out $50,000 a month on autopilot, do five deals at $10,000. This is so simple to do if you actually know what you’re doing because the market has told you everything. There’s no guessing.

If you talk to any hedge fund, or if you talked to any turnkey provider for sure, they will give you all that data. Like I can tell you 100%, we will come up in Dallas and say, “Here are the 25 zip code we want to buy in, here’s the price we want to pay, here’s the bedrooms, the baths, the amenities, the square footage, the schools, here it all is.” And so if somebody is willing to hand you a shopping list, why would you not just say, “Okay. I’m going to focus my efforts on getting this because this is a done deal. I don’t have to worry about the other side of the equation.” For me personally, it’s made perfect sense for us as a business and it’s every bit the reason why we’ve been able to grow as successfully as we have.

Mike: Yeah. Where do you guys go from here, Kent? What’s going to change over the next couple years? Where do you see things going for you guys, specifically?

Kent: I know we’re looking at new markets. We’re actively trying to see if there are any markets that are we feel like finally after three markets, we may have been able to just turn . . .

Mike: [inaudible 00:32:29] along the way?

Kent: Oh, yeah. Well, as the saying goes, “If you do it wrong enough long enough, you’ll figure it out.” We basically . . . we got . . .

Mike: I’m banking on that. I told you that’s a similar quote to this one I told you. “Success is buried on the other side of frustration.”

Kent: It’s one of those things.

Mike: I feel like I have been doing some things wrong for a while and I’m just about to crack the code on it.

Kent: Well, it’s funny because we were talking about this earlier, but you never quite fully learn this. There’s a fine line between confidence and cockiness. You’ve been doing it long enough, you understand what you need to do, you feel very confident, but you always flirt, even at some level, with “Man, I think I got this. I think I totally got this.” And now we’ve 100% got our arms all way around it and then it’s only when you go off and challenge yourself that you learn whether that’s true or not.

And so we always push the envelope and see, are we as good as we think we are? And inevitably, there’s always something that we’re nowhere near as good at that we think we are. Like I said, we’ve learned some stuff in the last two markets, but I think we feel as a team we’re better prepared now than ever to potentially take on some new markets. So we’re looking around.

Mike: Do you think that’s a curse for entrepreneurs Because sometimes I feel like I’m cursed. I see people that might feel like they’re cursed that you never get too comfortable. You always want to take on something else even if you don’t need it. I don’t need that to live on, but it’s like you want to conquer something. I don’t climb mountains but clearly [inaudible 00:33:54] people think? Why the hell would you ever climb mountains? There’s a good chance you’re going to die. So just stay home where you’re safe because it’s not going to make live longer, but it’s just this challenge.

Kent: I think it’s what makes us tick. It’s just in our DNA. At the end of the day, if as the saying goes, “There’s only one way to coast and that’s downhill.” If you’re taking your foot off the gas and you’re not pushing, and you’re not driving, you’re not getting up that hill, then, suddenly, you’re going in the wrong direction. And that’s just the way I feel about it. I’m sure you feel the same way.

Mike: That’s no fun.

Kent: I personally feel like that we have to continue to challenge ourselves. It doesn’t mean that we necessarily have go and do hundreds and hundreds of millions of dollars. Quite frankly, it’s rarely about the money anymore. It’s just about . . . it’s about legacy, it’s about . . .

Mike: Creating something?

Kent: Yeah. If it can be done and we’re capable of doing it, we can do this and bring it to the industry at large and help our clients and our customers, we’re going to do it. We’re going to go for it. And we’re willing . . . I think the other side of it is we’re perfectly willing to fail and fall down in the process. And I think that’s probably the biggest thing that I think new investors and new entrepreneurs struggle with. They don’t think guys like us fall down. And if they only knew half the truth. The reality was just we largely get judged. Flipnerd is very successful, our company is very successful. We largely get judged and success is projected on us because that’s what people see out in front. But behind the scenes, we’re getting our heads beat in just like everybody else. It’s just part of the process.

Mike: Yeah. Somebody said to me . . . it was the same day that our site went down recently, which was so frustrating. And I got this email like, “Man, you guys are killing it.” I was like, “It doesn’t feel like it. You apparently didn’t try to visit the site earlier.”

Kent: You know, it’s funny. Whenever my tech team wants to remind me of this because it doesn’t happen that often, but probably about nine months ago, our site went down for a few hours. And I mean literally, a week later Amazon went down for a couple of hours. And of course, they hit me and it was, “Oh, just [inaudible 00:35:59] the largest websites in the world went down as well. So we’re okay. It happens to everybody.

Mike: Cool, man. Well, any kind of final comments you want to share with people? This is . . . we call this the taking action segment. I know you’re big on taking action, but wrap it up here with a few final words on people that might feel like they’re struggling in this difficult . . . I said this difficult market, but a different market. It’s not necessarily difficult. You can thrive in any market, but maybe just share a few final words of wisdom there.

Kent: Yeah. Just stop listening to the media. Stop listening to the people around you. Stop listening to all the naysayers, the people that are . . . misery loves company. There’s a reason why that’s a cliché saying because it’s so many people just truly believe it. They love to hang out with people and moan and groan about what’s going on in their business. And the reality of it is to separate fact from fiction. Go truly do a deep dive into your business, into your market, understand what’s actually happening there. If your REI club is nothing but a bunch of donut eaters that aren’t actually doing any deals and they’re just standing around complaining about the business, then get out of there.

You can’t be a part of that. If you want to be successful, you have to surround yourself with very successful people. And that starts with being accountable to yourself. Believe in yourself enough to go actually do the real due diligence. Get into your market. Understand exactly what’s truly going on at the transactional level. If you do find out that the market’s a lot tighter, that you don’t feel like there’s an opportunity there, then absolutely surround yourself with mentors and training and masterminds.

Seek out the knowledge of the people that can help you to transition to maybe another exit strategy or another technique or strategy. Or even maybe another market. But don’t just sit there and wallow in misery and allow yourself to get beat up and ultimately beat yourself up because that doesn’t serve you at all.

We are in the white-hot real estate market. You and I both know people that are absolutely killing it that the biggest problem that some of the guys we know or are having is how can they take their foot off the gas? They’re basically like, “Man, I have so much business. I have so much opportunity. I’m making so much money, but I’m afraid to stop working so hard and so fast. And if I do that, if I do take my foot off the gas, then it’s all going to be gone. How can also have my family? How can I build this business?” And so . . .

Mike: It’s always feast or famine right?

Mike: Yeah. Things are tough all over. Everybody’s got their own issues, and we think people get trapped between their own two ears, and they just believe and it has a way of creating its own outcome. I would deal with facts. Get into the data. It’s absolutely there. We live in an amazing time where there is more data readily available to you than certainly was when I got involved in this business.

And you can easily establish, “Okay, yeah. This is what’s real, and this is what’s not.” And at the point that . . . I can tell you this, personally, that the moment I actually have the facts, for me, personally, it becomes very liberating. I just don’t have to think about any of the delusional crap anymore. Now it’s just like, “Okay. I know what’s really happening so now I can be holding myself accountable.” It means I’ve got to be a better marketer. It means I’ve got to be a better operator. I’ve got to do things better because the business is absolutely happening.

When you when you have that kind of epiphany, it just takes the whole unknown off the table. Now I can do what I need to do. And I think if people own it like that, they’re going to see, more times than not, success is just right around the corner.

Mike: Awesome, awesome. Kent, thanks for being with us today. If folks want to learn more about you or what you’ve got going on, where should they go?

Kent: They can go to Kentclothier.com or they can go to reww.com which is Real Estate Worldwide.

Mike: Awesome. We’ll add some links down below here. So thanks for spending some time with us, my friend.

Kent: You got it, brother. Thanks for having me.

Mike: Everybody that listening in, thanks for joining us today. Definitely appreciate your time, and we’re cranking these episodes out. Of course, Kent’s show right now is the best show ever. You have you have to continue to listen. It might not be as good as this one, but you’ve got to continue to listen. So thanks for spending some time with us, everybody. Have a great day.

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