I don’t care what you hear on social media (or the ‘news’), we are coming into the BEST time to be a real estate investor in many years! “Down Markets” are my jam! We just released my show with Beau Hollis where we discuss how to THRIVE in this market, and what’s happening in both Acquisitions and Dispositions.
Resources and Links from this show:
- Investor Fuel Real Estate Mastermind
- FlipNerd Real Estate Investor Facebook Group: Join for Free!
- Investor Machine Real Estate Lead Generation
- Beau Hollis on YouTube
- Beau Hollis on Instagram
Listen to the Audio Version of this Episode
FlipNerd Show Transcript:
Mike: Welcome to FlipNerd Live discussions with and training from America’s very best real estate investing professionals. We meet live twice a month to discuss what’s working now and get your questions answered. We broadcast live inside of a private online community, which you can join for free by visiting flip nerd.com/live.
Let’s start today’s. What’s up everybody? Hey, welcome to the show. Really excited to have my friend, uh, Bo Hollis join us today. We’re gonna be talking about, uh, what’s going on in the marketplace right now. And honestly, we think this is one of the best times to get involved. Uh, if you’re new or certainly if you’re, if, if you’ve been around for a while, like this is a great time.
And I think a lot of folks that haven’t really been through a market cycle before, haven’t been around a long time, are a little bit afraid about the pullback, but the reality is this is a great. To get into the business and I won’t steal any thunder. We’re gonna talk about that a bit, but Bo, what’s up my friend?
Beau: What’s up Mike? Glad to be here, man.
Mike: Yeah, glad to see you. And it was, obviously you and I have known each other for a number of years, but it was great to get to know you a little bit better. Recently. You spoke at our, uh, million Dollar meeting event, and so I learned more about you and your story. And honestly, that’s one of the reasons that I’ve always, I’ve been doing podcast for, uh, since 2013 actually, is uh, That’s awesome.
That it gives me a chance to get to know people better. Like social media can only take you so far and, uh, and is for as much as you know, people will be getting to know you today that don’t know you right now. I’m sure there’s some plenty that are watching that do know you. Um, it’s a chance for me to get to know you a little bit better as well as to get to know each other.
So definitely a relationship guy. I know you are too, so. Absolutely. So tell us a little bit about your background. Um, you know, just kind of high level, like what got you into the.
Beau: Yeah. So, uh, my, my background quickly is that I was a lifelong, seemed like a college student forever, Uh, was going, My goal was to get my PhD in, um, anatomy, physiology, and biochemistry.
That was my real original goal in life. Wow. It seemed like, um, and I was on my way to, um, you know, go to school forever and well, life happened and we ended up having a baby, and I realized that being a college student forever was not gonna pay the bills. And so right after college I got recruited to sell life insurance.
And that was a unique experience because I just didn’t, I didn’t have any desire to do that at all. I just know I needed to make money. And they were like, Hey, you can, you can make a thousand bucks a week, you know? And I thought at the time I was like, Man, and. I was like, Man, that’s pretty good money. I was like, I could, I could do this and maybe even make more than that.
And so I did life insurance sales and it was door to door life insurance. So we went and knocked on doors and we sold life insurance door to door where we took our lead cards and we would go knock on doors and people had no idea that we were coming and we would go just. Door knocking. And we did that every day of the week.
Uh, and I did that for three years and it was one of the hardest sales in the world. You know, it’s, you have to sell something to somebody that they necessarily don’t want. They have to pay for it their entire life, and they have to die to use it. That’s right. It is hope to build thick. Right? Oh my gosh.
It, it was absolutely outta control. I mean, people would say the most incredible things you. People say cold calling is tough. You know, door knocking is really tough because they’re looking you directly in the face rejecting you. And, uh, that’s where I learned how to come overcome objections. I just, I learned how to smile through, um, people acting absolutely psycho.
And that just made me, uh, a better salesperson and a better lover of people, uh, for. For all it
Mike: is. Right? What a great, what a great, uh, training ground for, you know, any sort of sales if you can do that. I mean, you would know this, like there’s, there’s a, there’s a high level of people, high percentage of people that get into any sort of door to door sales, and they, they quit after the first day, right?
Beau: very fast. I cannot tell you how many people I put in my car and trained them and they had gone, They had went through all of their life insurance training. They had to get licensed by the state. They went through all their training and months of training to only get in my car, and they didn’t last a week.
They would put ’em in there and they would maybe last a week, they had just quit. I had trained people almost every single day of the year, and about 10% of people stuck in that business because it was so hard, and like the people who were really awesome lasted a. And
Mike: now a word from our sponsor.
Investor Fuel is America’s number one mastermind community for professional real estate investors, where hundreds of the top investors from across the country come together to build stronger businesses and stronger lives. Our community is about giving and transformation. If you’re ready to take your business to a whole new level.
Please learn more and schedule a call with us [email protected]. Investor machine is the nation’s number one done for you. Lead source for professional real estate investors serving many of the highest performing and most respected real estate investors in America. We use a unique approach to data that is tru.
Unlike anything else on the market, then execute your direct mail and skip tracing campaigns for you. Markets are filling up quickly. If you’d like to learn more about our world class service, please visit investor machine.com. Find out why over 7,000 real estate investors and agents have chosen Carrot to build their website to attract and.
More online motivated seller leads visit flipper.com/carrot to learn more about how Carrot can help you. Yeah. And that says a lot about you, my friend. You’re able to do that for a long time. And, and, and really honestly, you know, I, I think about this a lot cause I, I have some that’s 15 and we, you know, like my wife and I went to college.
We went to grad school and we really believed in education. I don. You know, I could knock it. And I think it forced you to learn a lot about yourself, right? Yeah. But at the end of the day, it’s not about, whether it’s formal or informal education, it’s about building up skills that you can parlay into other things.
And importantly, I think that they’re transferable into other things cuz there’s industries that come and go. Right? And there’s people that we know that have a ton of education in the technology space and then technology changed. And they got left behind. But sales skills are something that’s like super transferable and being able to learn that one way or another is, is, is gonna, you know, obviously it’s gonna help you for the rest of your.
Beau: It’s so important, man. And I really think that, uh, especially that is a door knocking and selling life insurance door to door that way, um, is a very fan. It’s a fantastic skill and I wouldn’t trade it for the world because I would never be sitting in this chair without that, without doing, just going through that.
Um, so, you know, we, we did that for a couple years and, um, that was, it was an interesting piece. And then one day, um, I was mowing grass at my, at my dad’s church. My dad is a pastor. And, uh, I was mowing grass, 15 acres, and I owed it every single week, even when I worked and I was mowing grass and I, I was at a point my youngest son had had open heart surgery and um, I was mowing this grass and I was listening to Rich Dad, Poor Dad.
The audio book while I was mowing this grass and I got to the end of the book and I only had known one person in, uh, real estate and I would say like a creative style, wholesale style real estate, not traditional. Uh, I only knew one person and I ended up calling this person being like, I need to quit my job.
I just listened to Rich Dad Port Dead and I don’t know what to do. And so he’s all, his advice was, was get online and listen to these podcasts cuz there’s some good podcasts out there. I did and I just decided Right then I, I quit my job in my head and I said, I’m just gonna do this if these people can do it.
Not in an ego way. Right. Just a, a way of like, Hey, this seems like a normal. Uh, I can do it too. And it turned out that that was a, a true thought.
Mike: Yeah. There’s no doubt. Once you set your mind to something, it just happens. Right? I mean, I, I, I, I don’t, I’ve talked about it, I guess, a little bit. I’ve made a couple posts on social media and stuff lately, but I’ve recently lost like 45 pounds.
Right. And it, and it’s not, it’s not like I didn’t know what to do five years ago or 10 years ago or whatever. It’s just I finally made the decision. That I’m gonna do this. Right. And I think it’s the same thing. Everybody that I know that’s successful in real estate was the same thing. They have different stories than you, uh, but something similar, right?
They just were tired of doing whatever else they were doing, or it wasn’t working or whatever. And their back was against the wall in one way or another, summer, way worse than others. Um, and they just committed to it. And that’s it. And so that, that’s one of the things I know we’re gonna talk about today, is like, this is a great time to get either get started or take your business to the next level.
I I, I was reading. Actually, what’s it called? Oh, a Grant Cardone book, uh, recently, and it’s if you’re not first year, last, like a 10 year old book, but initially enough it was written during the last downturn, and he talks about how, you know, there’s like four different, four different responses that companies have during the downturn.
And like basically three of the four were some version of. I can’t control this. The mar, it’s the market. What am I gonna do or lick my wounds or whatever. And then the fourth one is the people that say, this is the opportunity to go all in and double down and steal market share. Because I don’t have that mindset of I’m a victim here.
Like I’m gonna use this opportunity to go forward. And I, I’m just telling you, and you know this too, some of the best real estate investors are gonna leapfrog a whole bunch of other people during this market. It, that opportunity exists. It’s just in your mind whether you can overcome some of the challenges or not.
Beau: Absolutely. It’s just figuring out how to, how do you do it? Yeah. Just figure out how to overcome the things that we’re facing now, because in 10 years you’re gonna be like, Man, if I would’ve only bought every property Yeah. During this time. Yeah.
Mike: And I know you know this, we talked a little bit ahead of time and I know you’re, at the end of the day, you know, you talked about with your door knocking, it allows you to overcome people’s objections and really focus on helping people.
At the end of the day, this business about helping people with problems and, uh, as you know, the types of problems that we help people. Are not writing the, the changes in the market, right? Death, divorce, inheritance, people tearing up, rental properties, losing their jobs, financial problems, all those things.
Those happen in good and bad markets, and it has nothing to do with what’s going on on Wall
Beau: Street, right? Yeah, absolutely. People are gonna, you know, this is a, a sad fact, but people are gonna pass away whether it’s a good market or a bad market, whether the real estate market is hot or it’s not. Hot houses are sitting on the, on the market, you know, two hours or you.
90 days, you know, that does not, it is irrelevant to what is happening in people’s lives. Yeah, Right. People are, their life issues are going to happen regardless of anything that’s happening in the market. Yeah. It does not, it does not matter. They need a
Mike: solution. Right. They need a solution to solve those problems and, um, and so there’s folks like us think that are able to help them, Right?
Beau: Oh yeah. AB absolutely. The, I, I just talked to a seller legit today. I asked the lady, I was like, So this sounds like a decent property. Why are, why in the world are you gonna sell it? And she goes, Can I just vent to you for a second? And I was like, Of course, absolutely vent. And we were laughing. She was like, Oh my God, thank you.
And she was like, I’m at work. Let me shut the door. So she shuts the door and she was like, I literally, I’m only gonna sell this house because I have. My kid, my grown kids are living with me. My, my cousin Bobby’s living with me and his kids. He’s like, I have all these people and I’m sick and tired of it.
I want my space back. I’m gonna downsize and I’m gonna kick all these fools outta here. People’s issues are, they do not matter. They, it does not matter what’s happening in the market. And so she’s gonna sell the house at a discount to us, uh, because of her financial, her situation that she’s doing with her family.
And so who cares what the market’s doing? She knows, she knows what’s up. Yeah.
Mike: And, and, and arguably those things, and probably not really, arguably, those things get worse in a down market. I’m not saying it’s a down market, but we’re, you know, it’s. A little more challenging than it has been, right? And so, um, but you know, people lose their jobs more.
Obviously there’s all this inflation going on. Things are getting more expensive. People are, you know, the average American. I’ve seen this stat before. It’s like the average American has less than a thousand dollars in their savings account or something Crazy, right? Crazy. But it’s like, it doesn’t take much for some inflation or a medical bill or something to happen where people go from getting by to not getting by real fast.
Right. And so, not that we wish those things on anybody, you know, but people just, people are generally unprepared for life and I think, um, ultimately they have to, they have to move fast sometimes and, and sell.
Beau: Yeah, that was me for a long time. I was the person with less than a thousand dollars in my account.
Um, that was who, that’s how I lived for a long time until real estate investing got in there and, uh, started making it happen.
Mike: Yeah. Well, let’s talk about some of the changes that you’re, that you’re seeing. And, and by the way, while we’re going here, we’re, we’re live recording this right now. So for folks that are watching right now, uh, tell us where you’re from and what you see going on in your market.
And if you have any questions along the way here, just chat ’em in and we’ll, We’ll try to hit ’em if we can. Awesome. Um, and if you’re, if you’re watching this and you’ve recorded, if you wanna watch our shows in the, in the Future Live, just go to flipper.com/group flipper.com/g R OUP P and we’ll get you on the list.
We’ll notify you when we go live the next time. I, we’ve been doing the Flip Different Flip Nerd shows for, uh, I think nine years now. It’s 2013. Yeah. And, um, Most of them have not been live, but we’re recording these live. And so if you wanna participate in the live show, we, we wanna know if you wanna be notified.
So, so, but let’s talk a little bit about, um, what you’re seeing from an acquisition standpoint. So I know you’re, you’re just a killer acquisitions guy and it’s because you care about people and you really want, really wanna help people in their problems with their problems. So talk about what you’re seeing differently in this market shift so far about.
Anything you’re seeing different from an acquisition standpoint?
Beau: So, uh, well, let’s back up maybe about a year just so we can give kind of context for this statement. Yeah. Um, probably about, as most people know, maybe you don’t know, but if, if you, if you’ve been in the business at all over the last year, uh, a year ago it was just hot in sellers knew it was hot, that they knew that they were sitting on a little pile of gold.
And it didn’t matter if the house had. Running water or it had, it needed all new flooring or paint and there was holes in the walls. They thought their house was literally, uh, the best house in the world. And that was everybody’s mindset was that I know what it’s worth and I want 50,000 more than that.
Well, Marcus changed, right? And interest rates have gone up a little bit. And it’s taking the time, uh, from about a year ago until now, for the sellers to actually realize that they’re not sitting on gold as much anymore as it was a year ago. Right. And so it’s taking time for sellers to catch up to the market cycle, and that is what we are currently seeing now, which is sellers realizing that.
They might need to sell or they should have taken that offer that they were offered, you know, 120 days ago. So they’re just now catching up with what we’re doing. And that’s a good thing in our, in our, in our sense and on the investing side of things, that sellers are, they’re coming down off their high horse and their prices and they’re starting to say, Okay, I’m gonna sell now.
And people are starting to sell at a, at a better, What I will say is that all the investors out there listening to this, whether you’re new or you’re, you’re seasoned, um, go back and make, make, adjust your offers and make lower offers. Don’t keep making offers that what it was four or five months ago, like adjust those
Mike: offers you’re gonna get squeeze.
There’s a comment here about somebody saying that they’re wholesale margins are slimmer. And that doesn’t have to be the case if you, if you
Beau: buy them. Right? Right. Yeah. Start making your offers lower and because we had to adjust for the higher, you know, prices, right? Just like it was like a car market, like you traded in your car in a dealership and then offer you more.
It’s the same concept is that we started making higher offers. Now we just have to go back and start making lower offers and say that, that the market has shifted and just tell people the truth. And I think that when you’re sitting down with a seller and walking them through step by step, like of what’s going on.
In the marketplace and just say, Hey, can I be honest with you? And just be real with them and tell them, Hey, I’m in this business to make money. And I tell everybody this, I’m just in, in this business to make money. We do, we buy houses one of three ways. We, we buy it and flip it. We buy it and, and hold it.
Fix it up as a rental property and you know, flip it like it’s on TV show and or we keep it as a rental or one of our partners. And we’re in this business to make money and let ’em know right off the bat that you’re gonna need to make money from flipping this property. Yeah. You’re not a retail buyer, right?
Yeah. I just tell ’em, I just am really honest with people and they like that. It’s like a breath of fresh air. Like you’re not some shark to come in here and just steal all their equity and, uh, you’re a real guy and a real girl wherever you are. And just tell him. Hey, I’m here to, to help you out here, but this is how it’s probably gonna work.
And yeah, people are catching up. It’s, it’s catching up to, we’re starting to see much better deals in discounts because people do not wanna sit around and wait for another interest rate hike to go buy their new house. Right? Uh, they want to, they want to buy, they want to buy and sell right away quickly.
So they’re starting to feel the pinch. And it takes it’s
Mike: conditioning, right? It takes time. Cause a lot of, a lot of folks that sell houses to folks like us sit around and watch the news or maybe still read a traditional newspaper and. For years, they were seeing how hot everything was and now they see that the market’s slowing down, the stock market’s slowing down.
Like all these things are slowing down and it maybe it takes them a couple months to come to terms with, Oh, this is gonna impact me. And then of course there’s some people that. Get to a point to where they’re fearful that it’s gonna continue to fall. Uh, and it may or may not, depends on what markets you’re in, but it’s just the mindset of like, I better, I better sell this before it gets any worse.
Right. And yeah, it’s not, you should never go in and, and put fear into people’s minds, but if you can educate ’em, Honestly, probably every market in America right now, you could get some MLS data or just from your local newspaper. Literally just print those things out and take ’em with you. Like you see that the, that the real estate market is slowed down and I mean there’s, we all have, You could Google it in any market in America and find proof that you could use to educate people of like, Look what things are slowing down.
They’re sitting on the market longer than they were now. Truthfully, we’ve come from. Really unrealistic time as well. Like that’s not normal. A hundred percent sure. We’re really getting back to more of a normal time. Um, but there’s facts that you could share with people to educate them a little bit on their situation, right.
Beau: Yeah, cuz we were paying, we were overpaying for properties. Right? Right. And so now we’re coming much back to a much normal time, and I don’t think we can relate this to 2008 necessarily. I think that we, we are normalizing pricing and, and it’s not necessarily a bad thing. I think that we’re coming back to a, a realistic price and, you know, we’re marrying the properties and dating the interest rates.
Right. Yep, yep, yep. I saw someone say that recently and I thought that was a really powerful. Yeah. And the good,
Mike: the good thing is, is, um, you know, for sellers, like during the last downturn, 2008 ish when I was there, a lot of people that just didn’t have equity in their house, they had lost a lot of it.
Right? And they maybe if they’d bought it in the past couple years, they just didn’t have a lot of equity. But coming out of this market cycle, there’s people, unless they refinanced in the past, like two or three years, there’s people that might be a little more desperate to sell, uh, for one reason or another, but they have a lot of equity in their house, right?
and so they can still walk away with a lot more money than what they paid for the house. For sure.
Beau: Absolutely. And especially those, especially the, uh, people who are aging out of properties and they’re just selling rental properties off, there’s always that, that group of people who are just selling properties at a discount because it’s a, um, messed up property from at tenants or whoever else may have lived there.
Mike: Yep. And for the folks that are like worried about, like if you’re, if you’re newer to the business or honestly, I find this even with myself sometimes, like I have a ton of experience, but something will get in my head and I’ll start to like tell myself that something’s not working well and I just gotta get out.
I just gotta get it outta my head, right? And so if you’ve been around for a long time, even if you’ve been in this business for 10 years, um, and you haven’t seen a down market, it could be that situation, but this is a great time. To double down on the business. I mean, if you, if you follow me on social media at all, I’ve been talking a lot about that.
Like the businesses that are sitting on the sidelines waiting to see what happens right now are gonna get absolutely leapfrogged by those that are like the market is down. But I’m leaning into it. I’m gonna, I’m gonna hire people, I’m gonna raise my marketing budget. I’m gonna, you know, build up my team.
I’m gonna build up our knowledge, whatever it is, Like this is the time to level up or move forward, not to pull back. And you, I’ve seen it over a long periods of time. People that just crush it in any business, honestly, lean in to down times because. That’s, that’s when most people are scared. You’ve heard like Warren Buffet that say, I’m not gonna, I’m gonna screw this quote up, is like, you know, basically be greedy when others are fearful and that there’s, there’s so much truth in that you agree with.
Beau: Oh, a hundred percent right now is the time to be when everybody else is afraid. Go in, go in deep. You know, I literally, right before this call, I was talking to another investor in my local market and he had gone through all his leads that were just like barely warm leads, like Luke warm leads and just started making 20 phone calls a day to, to these guys and pulled out deals out of old leads from.
You know, four, six months ago that were like, Nah, maybe we’ll sell someday. We’re we know what we got. Kind of an attitude. Yeah. Boom. They’re selling, they’re selling left and right. Yeah. To leads that were once cold, kind of luke warm. Now they’re under contract on a, in a wholesale prices.
Mike: Yeah. That’s awesome.
So let’s talk, let’s kinda slip, flip over to the dispo side. What you’re seeing different, I mean, obviously what gets a lot of media attention. Really what’s going on in the retail market. I know you sell to a lot of, you know, hedge funds and, and, uh, buy and hold guys and stuff like that. And, and those guys are just as hungry as ever, Of course.
Depends on how they’re financing it, cuz interest rates have changed. But let’s, let’s kind of dive into dispo, maybe first talk about your model traditionally. Mm-hmm. , um, just for context and then let’s talk about kinda what you’re seeing that’s.
Beau: So what we’ve done, um, on our disposition side of our business is that when I first started, I was just selling to mom and pop investors, just your average landlord people, some flippers here and there, but mainly our market of Louisville, Kentucky is, is a landlord heavy city.
We do have a lot of flippers here, but we have a lot of landlords because of, we’re a very blue collar city, we. Like the World hub for ups, we have big Ford plans, major general electric stuff, so Blue collar usa so there’s lots of landlords, Lot of affordable housing, right? Yes. Affordable housing is a thing here.
You can get 1% rents off the MLS almost. Uh, it’s very. It’s a very landlord friendly city with a lot of up and coming new areas of gentrification and flips. But I really focused on the landlord side of things and was just focused on getting a deal and then selling that deal for a little bit more to landlords because I knew that they paid cash and they were always, I was always told that they’re the highest paying cash buyers.
And I, I didn’t know what that meant or why it was a thing and, but I just followed that advice was sell to landlords. Sell to landlords, they’re gonna pay you the most. Yeah. And. Then I learned about this thing called, you know, the rent to purchase ratio and figured out why they could pay them more, uh, the bigger price.
And so I was just focused on that and over time I started focusing on, uh, hedge funds who could, are the biggest landlords and they are paying the most money. Mm-hmm. . Over the last several years, they’re just buying up as many properties as they could get, spending millions of dollars, uh, acquiring these portfolios and houses and building portfolios.
And so that’s what we’ve done in the past is small time landlords to the biggest landlords. And that really has you just say just a
Mike: minute and just talk, just talk to folks about why landlords are typically willing to pay more. Then Okay, great. A fix and let’s say a fix and flip investor.
Beau: Yeah, absolutely.
So, um, we’ll break down those two things. Landlord versus a fix and flip investor. A fix and flip investor. They need bigger spreads because they’re very market dependent and say that they’re holding a property right now in the feds raise interest rate. Well, that changes who their buyer is gonna be and how that’s gonna affect the pricing of their home.
So they need a much deeper, Discount, which then on our side, on the wholesale side of thing, we would have to get that property at a much cheaper price to then relay that cheaper price to the flipper. Yeah. So they can put in their rehab costs and then give their retail buyer, uh, and holding costs. They have to calculate all that stuff in.
Right. Well, your landlord. When they’re buying it, they’re not, they’re not looking at the value of today’s dollars really. They’re looking at the future of appreciation and rent ca, like how much will rent play into their purchase price, right? And they’ll work in some rehab costs as well, but they’re mainly viewing it over a 15 to 30 year period and most of them on a 30 year long vision.
So they can almost pay like an average deal Today it’s gonna be an awesome deal. For them in 30 years. And that’s where a lot of landlords view deals. So they’ll buy their area that they really, really like. They’ll marry the area, and they’re willing to sometimes overpay for properties today knowing that they’re gonna dominate a certain area because that they just, they’re not thinking necessarily about today’s money.
It’s all about. Future
Mike: value. And they certainly don’t care about today’s market value necessarily, right? Cause they were taking about today’s, today’s market rents, right? And they, and they’re factoring a rent appreciation, but they’re not worried about like a, like a wholesale or a flipper. You know? They need to know what today’s ARV is.
What, what am I gonna be able to sell this thing for within 90 from now? Right. And a landlord has a much longer, uh, horizon. And they, they, they know. I mean, I’m sure you have some too. I have properties that I bought. 2000 8, 9, 10 that I kept as rentals that are, that are worth like literally 10 x what I paid for.
I’m not just kind of crazy. Um, and it’s wild. It takes, it takes time to really understand that. But now in hindsight, it’s like, and I, I ask myself all this, this all the time now, it’s like properties seem like they’re have been overpriced recently, but I’m like, what will we be saying in 10 years from now?
Will we, will we wish, go back and, and scoop ’em all up probably right.
Beau: Oh yeah, I’m sure you know, I have friends who are like some really big, big, uh, landlords in town and they are just, they love buying properties and they’ll almost pay full price just because they know the future value of, of their investments over in 30 years.
And so they, that’s the reason why landlords are really, really important when in your wholesaling, because number one, they can, a lot of times they can pay cash. and uh, big landlords can typically pay cash and they don’t really care about the interest rates cuz they’ll just refi later. Yeah. So it doesn’t really matter.
So on the
Mike: dispo side, two, two more. Uh, topics to talk about. One is what you’re seeing with hedge funds. Cause I know you’ve sold a lot to hedge funds and mm-hmm. people are getting mixed signals all over saying that they’re pulling back or they’re out and they’re obviously not all out. It’s gonna market specific and certainly hedge funds specific.
And then two is, I know you’re very big on the relationship side with selling as well, not just buying and building long term relations people. So kind of get into maybe what’s going with hedge funds and then maybe share some tips for how to build solid relationships with people, uh, that you’re
Yeah, absolutely. So over the past couple years, we’ve really built some good relationships with some funds and I learned about the fund, the market and how they, how they work. So one of the things that over the last year I’ve seen a lot of, you know, funds coming in and I’ll rate these like, you know, we have.
You know, d class funds, you know, c, b, and A, you know, so we have, I would call them four, the four different classes of funds. And there’s more different, uh, types in there, but a lot of times you’ll see people talk on the internet about, Oh, the funds are done, they’re stopping. Um, which may or may. Not be true, uh, depending if that person has something to sell you or not.
Who’s saying that? Um, but there are some funds who could be pausing acquisitions because they need to do, uh, vacancy absorption. They need to absorb vacancies in their, in their properties, right? They go and they buy a hundred properties in the market and they’re sitting on a hundred vacant houses. They need to pause acquisitions.
And so that could be happening and there could be some small, small time funds that just, they couldn’t compete with some of the bigger funds. They may stopped completely. So I think that might be happening in some markets. But what I think is the, the long term outlook is that just like, and like we’ve just been talking think through like what we’re talking about is that we are waiting as small time investors.
In comparison, right? In comparison to Wall Street, right, we are small time investors compared to them, right? If we are waiting for downturns and we are waiting for things to slow down in houses that get cheaper, wouldn’t we think that the funds are doing the exact same thing? That they’re waiting to pounce with their hundred million and billion dollar funds that they’re waiting to pounce on America.
And the answer’s absolutely, they, they’re absolutely waiting in the wings with their money, and they’re gonna come in and they’re gonna buy single family, uh, single family residents real estate in America. They, I’m, I’m a hundred percent convinced. We have conversations all the time and new funds are moving into our market and they’re doing, the smaller funds are doing.
One thing, uh, like the B and c class funds, they’re doing one thing is called portfolio acquisitions And they will build a portfolio, uh, to there, stabilize those assets inside of that portfolio and they may get 50 or a hundred houses and they will turn around and sell it to the big boys for a spread.
That’s what they will do. And so that’s happening all across America, and I think it’s gonna even grow over the next two to three years. And they have econo, they have economists working for ’em. They, they have people telling them what’s gonna happen and how to pivot and shift and change their strategies to make sure they’re not gonna lose money.
Long term. So Boeing to these people and building these relationships right now for when things go a little bit more south in the market, uh, that way you can buy the properties and just wholesale to them cuz they’re always gonna be the biggest paying buyer in every market that they’re in. They’re gonna be a big paying buyers and selling to them and building those relationships with these kind of acquisition humongous acquisitions companies and is happening from East Coast to West Coast and it’s gonna continue to happen.
Really? I. Q1 of 23 is gonna be a huge, uh, buy fest for them. Yeah. And the only, I have one coming in literally in two weeks, uh, where they’re flying into, into Louisville, Kentucky. We’re going to dinner and they’re, they said they have $50 million ready to buy in my city. Yeah.
Mike: Sometimes we forget. We, we, we basically say everybody is the same, is the same.
Right. They all have different objectives. I mean, there could be hedge funds that we’re buying in Dallas and you know, These hedge funds are, they’re all, they’re just investors, right? And they have more resources. They usually, um, have some talent to analyze things like you said, economists or whatever that are looking.
And on some level they’re like, they’re going after appreciation, which probably is gonna slow down here on some level, there’s, uh, investors institutional level that are only focused on cash flow. That’s all they care about, or some mixture of in between. And. Let’s be honest, some of these guys are just shifting markets.
They’re like, Hey, Dallas is gonna slow down from an appreciation standpoint, and we’re gonna focus just on cash flow. So we’re gonna go into markets like yours that might have better cash flow, right? And so these guys are, it’s not, They’re not just in or out of the market. They’re shifting around and have other strategies
Beau: as well.
Yeah, they’re, they’ll go from like, um, a place like Dallas or, or even like a Utah, where it’s the cheapest house is $400,000. And then they’ll pivot and shift to like a Memphis or a Louisville or Indianapolis where they can, their purchased to rent ratios are incredibly better and they’re just gonna go stack stacking these places.
Mike: Yeah. So those watch right now, maybe chat in if you’re listening right. Live chat in, you know, what you’re seeing on the dispo side. We’ve got some folks that commented on what you’re seeing on the acquisition side. Maybe tell us what you’re seeing on the dispo side. Yeah, I
Beau: think it’s gonna be great.
I really do. I think over the next little bit, it’s gonna be very good for, um, very good for this, this kinda market like wholesaling. I think it’s gonna be really good. And this the quick flip investor, if
Mike: you’re a wholesaler, let’s be honest, and I, I don’t most people understand this, but not everybody does.
It’s like a day trader. Like it doesn’t really matter where the market’s at. You’re only gonna hold it for a short period of time. Really, if you’re assigned, you’re not holding it at all, but you’re just trying to manage this margin in the middle of where you buy and sell it, right? And so, Yep. There’s still gonna people that are selling their house always, there’s always gonna, people that are buying.
You’re just making a market is all you’re doing. So you just have to anticipate not getting squeezed in the middle, um, and, and buying it a little bit better than what you have in the past. Cuz market, the, the market value has come down and whoever you’re selling it to, you know, like we said, landlords care a little bit less about it, but they still care like what they think the market value is today versus, you know, three or four months ago versus where it’s going.
Beau: Yeah, I think it’s a trader. Yeah, we’re just traders and if it, if it starts going south, then we just need to buy cheaper, right? We need to make lower offers. You may have to make more of those lower offers to get a deal, but we just have to make those lower offers and then be able to pass on that value to the next buyer, right?
The, the landlord.
Mike: Yep. Absolutely simple. So talk a little bit more about, uh, let’s continue on the dispo side about just the, the importance of the relationship side, and not just with hedge funds, but individual, you know, landlords or rehabers or whoever’s in your market. And maybe give some tips. I mean, I know you’ve done excellent at this.
You care a lot about it. Just tips for how people can build better relationships. Cause the days are gone where you post something and you. I’m gonna have this dog and pony show. I’m gonna take the highest invest. I think a lot of honestly, buyers that bought from those folks are just turned off by that whole experience.
Like, totally, Somebody’s gonna pay more than me if you don’t care about the relationship. And it’s, it’s all about price. Um, then I’m not gonna come out and look at the house, right?
Beau: Absolutely. I think the days of, um, and I couldn’t stand this to begin with because I felt like I was lying, uh, was that come out here and you have an hour to walk through this property and, uh, I’m, I’m gonna take a highest and best offer.
This is my deal. When every buyer knows that you’re totally broke, you can’t perform in the contract. Um, more times than not that. You are broke and they’re just gonna wait you out. Right? If you can’t do and build, get this house sold, right? They’re just gonna wait you out, right? Because you can’t perform anyways.
So I think that whole model is done. Uh, I never liked it anyways, but, uh, building out your relationships with buyers, and I think the quickest way to start doing this is letting yourself be known in your marketplace is getting out there, networking and going to networking events. In your city, in your market and letting people know that what you do and start finding out what they do face to face, real old school networking where you have Rs.
I mean, there’s amazing RS all over the place and I’m sure if you’re in Dallas, you there’s a R every day of the week, like there’s a meetup or something. Almost every day that you can go to and start meeting buyers and get on the phone with buyers, actually get on the phone and start talking to them.
Find out what they’re looking for. And the way I view this is once you start talking to these people and they say, Yeah, I’m a buyer, I’m a cash buyer. I’m a landlord, or I’m a flipper. Get on the phone and find out what they’re looking. Like it’s a grocery list from your wife going to the store. Like you want to know exactly what they want and don’t wanna say, Oh, just send me a deal.
No. Like tell me how many bedrooms and bathrooms and what was your last deal like that you bought. Why was that a good deal? What made it a good deal? Where did you get your funding from? Like find out. Why the buyers are buying. That way you can reverse engineer the process. And once you go look at a house, you know that, Oh man, I know Mike loves this kind of deal in this neighborhood that way.
You can call it Mike. Hey Mike, I’m going to look at this deal on this street. And Mike’s like, Man, I own four on that street. Yeah, let me know. Let me know. I want it like that Is the relationship that you want to be able to call Mike, uh, and say, I got a deal on this history I’m gonna look at, and then you.
Kind of pre-sold a little bit going into it. And that only happens by knowing your buyers really, really well. And that in turn they’re gonna know you and they’re gonna trust you. And they may pull you outta deals that you maybe shouldn’t have got into at the beginning. And you know, like they may just really love you.
And that has happened a lot of times too, when I just didn’t have the experience I needed that I built my relationships with my buyers and they’re like, Man, let’s keep doing deals.
Mike: Yeah. Well, any, any tips on, from a side, from a relationship side, um, how to maintain those relationships? Cuz it’s so easy to build up a big list of people that you have in some sort of crm.
Like any, any quick tips you could share on, um, maintaining those relationships
Beau: over time? Yeah, so one of the things I think is really, really powerful is once you build out your buyer’s list locally is starting a. It’s starting a meetup. Uh, it could be as simple as free meetup.com. It’s not a dating site.
Uh, it is a real, a real place for meetings to happen, you know, and, uh, you know, so I would start a meetup. I would absolutely, I don’t care if you’re brand new, uh, or you’re seasoned, start a local meetup where people who are followers of you. Want to know what you’re doing, where it could be at a barbecue restaurant, it could be anywhere.
Just a free local thing where you guys can network, people can go and get a beer or whatever they’re doing and they can have fun and you can go pat ’em on the back and you can do that once a month where they’re, it’s face to face and you’re just all hanging out, having a great time. And you can invite other people to come maybe and speak at your meet up about a certain topic.
It’s just keeping. Um, you in front and center of letting know, Hey, I’m still in business. I’m still doing stuff. Then you’re meeting them and talking to ’em, and then asking ’em what they’re doing. You’re walking around like a big, you know, shaking hands and kissing babies kind of a thing. Yeah. It’s, it’s really the most powerful thing that you could do and that will continue to build your buyer list and your people who wanna work with you, they wanna work with somebody who’s doing things.
Mike: Yeah, Yeah. Building relationships has changed my life and, and, and I, I. You know, we’re talking about doing it now from a dispo standpoint, but the reality is, is when you’re building relationships, um, you may have an objective of, this is what I wanna accomplish by building these relationships. But if you’re in, in this business for a long period of time, or any business, honestly, what happens is, Other opportunities will arise from that relationship that you never could have predicted or expected, right?
But it’s just like doing right by people, being a good person. And I think taking the time to build relationships with people, uh, outside of social media, which honestly is very shallow these days where we have thousands of friends, but we don’t really know any of them. Um, and so take, taking those efforts to build relationships with people, like real relationships will create opportunities that you just can’t predict at the time you’re.
Beau: Absolutely go to lunch, go to coffee, get, get a cup of water with somebody every day of the week. Go plan, I mean, for like a year. What I did is I would go to lunch at least three days a week or four days a week with somebody different and say, Hey, you wanna go to lunch? Get on my schedule. Let’s, let’s go hang out.
And we’d go, Quick coffee, quick lunch. If you can afford that, go and do that. Invest in those relationships and go find out what houses that they’re doing, go see their properties with them and really go above and beyond what no one else is gonna do. Like do the real hard stuff that is inconvenient that you have to get out from behind our computers and go out and be around people.
It’s so powerful.
Mike: Absolutely, absolutely. Awesome. But if folks wanted to connect with you, uh, you got a lot of stuff going on, where do they go to, to learn more about you or get in?
Beau: Yeah. Uh, YouTube is probably one of the best ways we are, um, building out some fun stuff on YouTube. And it’s just my name, Bo Hollis, um, on YouTube.
And we’re gonna, we kind of are crafting and sharing stories that we’ve come across in the, in the real estate business and sharing our stories through a, um, Fun, humorous, educational way, which I, I like humor. That’s something that’s really fun to me. And just keeping it lighthearted in this business because sometimes we can come across crazy stuff and I wanna share all those crazy things on YouTube through storytelling that way.
And that’s a great way. And then also, uh, on Instagram, at just my name at Instagram and I share, um, family stuff and BB. On Instagram, I am a huge barbecue fan. Yeah. Awesome.
Mike: Awesome. Well, we’ll, uh, we’ll add in the recording, We’ll add the down in the show notes, We’ll add some links to your profiles here.
And, and thanks for, thanks for sharing your insights and your experiences
Beau: with us today. Oh, man, it’s a, it’s a pleasure. Thanks for having me on. I’m, I’m so happy to be here, man. Yeah.
Mike: Glad, glad you, glad you are, and for everybody that’s watching us today. Thanks for listening in. If you’re live or you’re watching the recording, really appreciate you.
If you wanna be notified. The future, um, Flipper live shows that we’re doing, just go to flipper.com/group and you can opt in and that way we’ll be able to notify you of when we go live and we really do aspire to interact and answer questions and stuff like that. So that’s, you have to do that live actually.
So, uh, both, thanks again for your time today. Really appreciate you. Thanks,
Beau: Mike. I really appreciate it, man. Yeah, and
Mike: everybody, thanks for joining us today. We’ll see you on the next show. Thanks for joining me on today’s Flip Nerd Live. To get access to our upcoming interviews with experts and get your questions answered and join our free online community, please visit flip nerd.com/live.
Thanks again to our sponsor. Investor Fuel is America’s number one mastermind community for professional real estate investors, where hundreds of the top investors from across the country come together to build stronger businesses and stronger lives. Our community is about giving and transformation. If you’re ready to take your business to a whole new level.
Please learn more and schedule a call with us [email protected]. Investor machine is the nation’s number one done for you. Lead source for professional real estate investors serving many of the highest performing and most respected real estate investors in America. We use a unique approach to data that is true unlike anything else on the market, then execute your direct mail and skip tracing campaigns for you. Markets are filling up quickly. If you’d like to learn more about our world class service, please visit investor machine.com. Find out why over 7,000 real estate investors and agents have chosen Carrot to build their website to attract and.
More online motivated seller leads. Visit FlipNerd.com/carrot to learn more about how Carrot can help you. We look forward to seeing you on the next FlipNerd Live real estate investor training. Please make sure to join our free community so you can join us live at FlipNerd.com/live.