Rehab Like a Professional

[00:00:00] Mike: [00:00:00] Professional real estate investors are a different breed.

We’re not afraid to go all in and take educated risks to build stronger businesses and help our families live better lives. This is the FlipNerd professional real estate investor show. And I’m your host Mike Hambright each week. I host a new episode live and bring you America’s top real estate investors as guests.

Let’s start today’s show.

Hey everybody. So this is the first show. Of a, this is the first day of your new life, actually. So this is the first show in the series, a, the new series that we call the professor. Sure. Real estate investor show on FlipNerd. So we’ve been recorded over over 1500 podcasts over the past six and a half years.

And, uh, I’ve interviewed tons of great people. Honestly, having this podcast has changed my life, just the relationships I’ve been able to make and the network I’ve been able to build, and the people have been able to help. And not just me, like my friends that are coming and helping me well, too, and hopefully changing lives and real estate.

I’m excited to launch this new show for you. [00:01:00] We actually film it live. We syndicated across our FlipNerd channels and so you can get it anywhere. But if you want to watch it live and be able to ask some questions and engage a little bit, make sure you join the professional real estate or network Facebook group.

That’s a mouthful, but just go to flipper.com/professional redirected to that group. And you can request access. Yeah. If you an experienced investor, if you’re a new investor, Um, we, uh, we’re just not going to let you into the group, honestly, cause I have a soft spot for new people. I want to help you get started.

But, uh, this group is, uh, is basically reserved just for professional investors that are helping one another out, kind of a little bit of a network there. So appreciate you guys. A bunch of excited to have my buddy Rotty. Join us today, Rotty. How are you? My friend.

Ryan “Rotty”: [00:01:38] Good, bro. I’m good. I swear to God is like a deja VU and we just do this.

Mike: [00:01:42] Yeah, I think we might have, it feels like we did, to me, it seems so the inside joke there for use it. Those of you are watching this after the fact, but, uh, yeah, something to do with friggin hit the record button or something, but,

Ryan “Rotty”: [00:01:52] uh,

Mike: [00:01:53] That’s cool, buddy. So we’re talking about right before we, uh, right before we started recording, we were talking about, [00:02:00] uh, just this evolution of getting educated on being a better rehabber because a lot of folks have just done it, including me.

I mean, hundreds of rehabs and lots of mistakes and lots of expensive mistakes. And that’s part of the problem, I think, is a. When you have big margins, like sometimes it, you know, you’re like, wow, I was supposed to make 40 and ended up being 30. And you’re like, and everybody’s like, Boohoo, you only made 30 grand.

Right. But you know, a $10,000 mistake made over and over again, $10,000 one time, that’s an expensive mistake. Um, but you could save yourself a lot of money by doing this stuff. Right, right.

Ryan “Rotty”: [00:02:32] The analogy, right. Your $10,000 mistake could easily be a $10,000 change order report. So a loss, but you grow and you learn.

Mike: [00:02:40] Yeah. Yeah. And it’s weird how a lot of us, you know, as real estate investors, we were talking about this a bit ago, you know, you’re willing to make this several $100,000 investment. Often. It’s not even your money, you’re borrowing from somebody else, but either way, you’re still responsible for those funds.

Right? You have to be a good steward of that. And, and we’re just throwing a couple hundred thousand dollar investment and hoping it all [00:03:00] works out. And somebody told me about a contractor, but I’d never worked with this guy or whatever it might be like, we’re so eager to build better lives and build better businesses that we take these, they don’t seem like risks, but if you were to explain it, anybody else, like, yeah, I’m going to take up a hundred thousand dollars.

I’m gonna hire this guy I’ve never met before. And he’s hopefully going to do a good job for me. And hopefully I’m going to make money. Most people think that’s. F and nuts. Right?

Ryan “Rotty”: [00:03:24] I don’t think people realize, I mean, at the end of day, it’s all risks. Right. But at the end of the day, think of yourself as just a consumer, right.

Mike and his wife in your home. And you want to do a basement remodel, your dream basement, or you want to do your dream kitchen for the wifey. Right? What do you know. It’s so different, just cause you’re real estate investor doesn’t mean that you, you know, like none of this translates over and you think, okay, I’m going to go on Google or Angie’s list or whatever.

And I’m a find out on a level contract to come out and do their thing. And you like everybody else has the competence that presumably that individual is going to do what they say they’re going to do. Right. So even at the retail level, contractors make mistakes. It’s not a perfect industry by [00:04:00] any means.

Construction’s hard. And it’s challenging. It’s very much like medicine, you are diagnosing and your prognosis thing. And you’re, you know, you’re tinkering away at things to make them function again. And that’s what construction’s all about. You know, remodel goes up until you go to structure when you hit structure becomes renovation.

So there’s different levels to it. Different contractors handle different types of projects, just because you’re a GC doesn’t mean you can go build a skyscraper there’s different types of GCs for that. Right. So, I mean, that’s just knowing a lot of basics, I guess what I’ve learned with all these different investments, I’ve helped thousands over the years and the highest levels to the, to the novice.

It’s really no different. If you don’t know how to rehab, you just don’t know how to rehab. And it starts with contracting understanding how contracting works and then how you prepare for contracting and how contractors make money. It’s not so much as where do I find a contractor? Um, it’s more about, do you even set it up?

They have you considered about, you have to plan. Like anything, you know, you, you, when you did this, this whole thing, right? The professional real estate investor network, you plan that you thought [00:05:00] about that you cultivated, that you thought about a day in, day out, how it should be, who should be in it and why.

You plan for that, this call, you realize you didn’t record the earlier part. No, we went back, but we did that because you didn’t plan for that, but that’s how that’s how easy is it is to make these mistakes. I mean, it doesn’t matter how big and bad you are, how new you are, mistakes are gonna happen. I make mistakes all the time, you know, but at the end of the day, I continue to evolve because I’m studying construction all the time yesterday, I was consulting a client.

We have out of New York. We have to really work on his entire business model, not just rehabbing because construction division is a piece of the investment company. As a whole. I was looking at some of these deals and I said, you know where I think we’re missing. I said, I think you might be buying wrong, not terribly wrong, but maybe your buyer should know how to estimate.

I’m like, do they have any construction background? No, most buyers don’t I know that. And I said, well, why don’t you give me three training sessions with them? I said, let me talk to the buyers. And I created a whole model and process for them and teach them, how do we evaluate a property? They can actually ask good [00:06:00] construction type questions.

We’ll get Intel out of the seller, right? And let the seller keep blabbing away and sharing information. And I started teaching him how systems work, but when the plumbing does this, this, this, and this, and when the electric does this, this, this, and when the HVAC does this, this and this, so that they’re listening for the seller to keep giving them more Intel.

If they know how the HVAC system works, they make making presume. Okay. I need to replace it repair to certify it. Right. You make that note, jot that down because everything you do right. As you know, everything, you know, you’d have to do the more work you have to do in the rehab. The deeper you got to go in the deal, right.

But that’s your leverage to go deeper in the deal, or you gotta do the roof and the windows and the mechanicals will shit. You gotta go deep as hell. But if you teach the buyers that way, And that’s why, just to my point, I’m like, it’s all about understanding that rehabbing doesn’t just affect construction.

Of course it does, but it affects the entire business. And if you can create, we had a business where any new staff, anytime 99, anybody you bring in as you grow, if they have the ability, that least learn a little bit about rehab function, [00:07:00] it will help their position in their SOP. Be that much stronger. And, you know, training buyers or something, it’s brand new to us.

We just started doing that this year and it’s making an impact because now these buyers can call me and text me and say, Hey man, I’d love to look at this deal. Can I send it to you? Absolutely. Send it to me. I’ll look at it and say, ask questions that are revolve around the foundation. I see cracks and leaks everywhere.

Make sure you get Intel on that because that’s going to be a hidden problem. It’s going to add a lot of money. And it’s going to kill the rehab later and helping them create levels of rehab. So when they’re going through their checklist, they’re like, is this a hotel? Is it kind of get this out for 10 grand?

Is it level two, going to 20 at level three, going to 30 and so on. And we create levels for them and with them. So they know that, listen, you’re only doing $50,000 rehab. That’s the margin after that, you lose. Right. So you’re not, you can’t buy properties if it’s more than 50,000. So let’s create what 50,000 looks like.

What does one to 10 look like? What does 10 to 20 look like? And so on, so forth and all of a sudden the buyer’s like, yeah, you know, it’s making sense now. And all that does is make them better at negotiating because they [00:08:00] have leverage now and they have the construction leverage to buy better, go deeper.

And then when that happens, that property will flow through the process of your company until it gets ready for production and goes to project manager and all the other good stuff. And knowing that you bought right, it gives you the advantage to rehab, right? You can’t reverse that.

Mike: [00:08:16] Yeah. If you don’t buy your house, right.

You’re screwed from the beginning. Right? So I think, you know, one of the things that, that I appreciate about you and everything you’re doing and helping the community, and there’s a number of other people in this space, John Martinez, Donald Ross, like a lot of people that have been big givers sharing their knowledge.

It’s like, that’s one of the biggest evolutions I’ve had in my career over, over the last 12 or 13 years now is. Initially, I tried to do everything myself, try to be cheap, which is inherent in real estate investors. Like we’re trying to buy cheap. We’re trying to rehab cheap. We’re trying to go in to look at seconds and surplus to see if we could get a discount at toilet.

Like all kinds of crap

Ryan “Rotty”: [00:08:49] without really

Mike: [00:08:51] honestly, early on for a lot of people. And if you’re listening to this and you resonate with this, like learn from this is your time is very important. It’s very valuable. [00:09:00] You can be doing more deals at that time, or God forbid enjoying your life. So

Ryan “Rotty”: [00:09:04] educate yourself,

Mike: [00:09:05] educate your team.

Build a team like build a team, educate yourself. Like, otherwise you’re just in this job and you’re in this rat race just, you’re never going to get out of, if you don’t learn how to do things better and you don’t surround yourself with the right people that know how to take it, your business to the next level and learn from

Ryan “Rotty”: [00:09:19] then

Mike: [00:09:19] you’re at serious disadvantage and best case scenario you have, even if you’re doing well, you have a high paying job, right.

Ryan “Rotty”: [00:09:26] A hundred percent, a hundred percent, but you hit, you hit the key thing. It’s about time, man. You know, as we evolve, I realized I don’t want my time back. You know, I’ve put in that the first 10 years it was 24, seven, three 65. I mean, even my wife and a lot of people that are going with this call that are in this, at this level, understand the dynamic between the marriage.

We weren’t married at this time period. We were together though. And she’s like, I don’t know, my wife’s sitting there on the couch. I’m being real right now. She’s like, is this, is this, what is this what it is? And I looked at, I said, what does that mean? And she’s like, is this what it is? She’s like, you’re here, but you’re not here.

She’s like, you’re here physically, but you’re not here mentally. You’re always working. [00:10:00] And I said, I’m building something. I’m like, I know where I’m going. I say, give me time. I’m building something. And she did, obviously we’re married. We’re happy. Everything’s great. But at that time period, she was. Helping me realize I’m infatuated with this.

Right. But I wasn’t spending time for myself. I would’ve taken care of myself a little and take care of anybody else. Right. So I’m glad though, that all of that happened then. Cause that was before the kids and it was before we got married, but it opened my eyes to say, okay, if I do have an objective here, which was, I always wanted to start consulting in helping you guys be investors, I was, I want to help you guys.

It’s not even close to fair. We’re playing two different games on two different fields. It’s not even fair across the country. Right? And I said, well, now’s the time. And when she had told me, she’s like, Oh, guess what? I’m pregnant, blah, blah, blah. I said, this is the time. And we launched literally why, while she’s pregnant with our twins, that’s when we launched the rehab Depot.

And I went all out, I went all out. I left the multimillion dollar construction company, closed it. And I said, I’m going to become a consultant. And my wife’s like, are you fucking, [00:11:00] yeah, I am. This is what I do, right. And I went after it and I didn’t know the first thing about consulting, let alone coaching, let alone putting curriculum, letting them building an Academy, let alone running a bootcamp.

But I was committed to wanting my time back. And that’s when I said, if I can build this and I’m on it, it’s almost like stopping and saying that you’ve heard that old saying people put that meme out where like, if you spend the next six months grinding to spend the next 60 years chilling. And I kept saying to myself, I spend the next six months grinding.

I’ve got this and it worked. But I stayed, I stayed focused. I said, by the time these kids are born, this has gotta be making money. I had such an and I had a, what? That’s nine months. So I was like, I have a, I have a timeline. I have a quote up that I have to hit and God bless us all. It works. Right. But time is everything.

You hit that on the head. It was all about time. And if you know how to rehab, you know, at 11 your time,

Mike: [00:11:52] if you’re listening to this and you’re an investor, I mean, Roddy has a, has a couple different businesses. I have a couple different businesses. Um, if you’re, if you’re just a straight up investor and that’s [00:12:00] all you do, and that’s great.

And that’s where a lot of you are gonna, that’s where a lot of you are, right. Is. Your version of that is building a team because ultimately if you’re, it’s like, it’s almost like if you had a job, if you had the regular job, you’re you work and you get paid, you’re working, you get paid, you work in Cuba.

There’s no residual. Right. The only way you can get a residual when you’re an entrepreneur. Well, I guess you could create some product that you get royalties on and you sell it forever. Right. But for most of us just building a team that even if you take a day, they offer a week off or you’re not there.

The business is still running and you’re still making money from that. So, yeah. Sounds like Rodney, would you just explain it to your, you, you, you had a kind of a leap off point of when, when your kids were coming and you kind of knew that, okay, this is the time to jump off, but for a lot of you, like, don’t wait for some life thing to get, to come up.

Like kids, marriage, health issues, God forbid any of those things, right? Like be pushing hard right now every day to say, am I building something that I could step out of it. Right. Right. And you know, let’s be honest, like, I’m not saying [00:13:00] to some that you could walk away from and you’re gone for a year and your company is still making money and all that stuff, but I’m not sure.

That’s that is, that is an awesome goal to have. It’s not as realistic as like being able to go have lunch with your family, watch your kid’s sports. Like do all those things, walk away for a week or two, whatever that that’s like, get there first and then worry about being able to step out of your business completely because sometimes the goal is so big that you’re just going to give up before you get there.

But you know, you got to build something that allows you to make money without it being sweat off of your back

Ryan “Rotty”: [00:13:29] every single day. And to that point, you got to go from being content with being good, wanting to be great, to get your time back, to get your life back to automate things, to have your, I guess, company on autopilot, so to speak, right?

Yeah. You gotta go from good to being great. You have to be great at something. Honestly, you have to be. And I’m a big advocate for that because we all know tons of coaches who give their time and their expertise that are actually very legit. They deserve to do that. They had a great following and they deserve that as well.

And they’re impacting lives. They’re changing [00:14:00] lives, which is the whole idea. And then there’s a handful that aren’t, but you have to truly be singularly good at great at something good is just not good enough. Right. And that’s why I always stay in my lane. Rehabbing is what I do. I went from good to great.

Right. And I made sure that I put myself in the line of fire all the time. I’ve lost hundreds of thousands of dollars. I’ve been sued. I’ve been to court. I’ve had all of it. As you grow as an entrepreneur. If you haven’t had any of this stuff, you’re not trying hard enough. Right. And I’m not saying you have to get sued to be successful.

Not saying that at all, what I’m saying is I was willing to go through whatever it took. To get me here because I had an objective that I want my life back. So I’m going to become great at this being good. Gave me the lifestyle, being great, sets me free and that’s well, I look at it and that’s how I coach our students and investors.

I say you’re so good. Dude, we can plus this. I always say Disney. I studied all Walt Disney’s books and he has that same called plus it it’s good, but it’s not great. We need to plus this plus, you know, Pinocchio, EDA plus the [00:15:00] lion club, you know, that kind of thing. And I looked at that in my life, man. I’m like, I got, this is good.

This, this looks good. I got a plaster. So how can I plus this? Because when I plus it, I’m getting my life back. I’m getting time back. And, and that’s kinda how I correlate that. And that’s why when I’m training these investors on rehabbing, I’m like, if you, if you really become great at rehabbing, you’re plussing it.

You’re getting your life back because now your business on autopilot, there’s a few things we got to tweak was a few people we might have to add to the team. There might be a couple people got to take away from the team or cross train, or they’re in the wrong position to begin with, you know, and. A lot of times, often, as you were saying, you know, and I’m speaking as an entrepreneur, a lot of entrepreneurs get in their own way because you, sometimes you do see everything and then you zero in and get that tunnel, vision something, and you stay there too long.

That’s all it is. You just stayed in that tunnel too long. And as soon as you got to pull you back and said, really, you totally missed that opportunity. That’s like all you and you. And you’re like, Oh my God, it happens. I’m guilty of that as well. When I’m, when I’m hell bent on [00:16:00] something I’m like up all night burning that candle.

That’s my thing. And that’s when I do my best thinking, I literally will wake up out of bed, come downstairs, write something on the whiteboard, but I don’t want to forget that shit. And I’m like, I

Mike: [00:16:10] know. Yup. Yup. Now that’s how, that’s how you move ahead. Right? You, you, you, you don’t just move day to day.

You’re like, you’re always thinking of what can I do to leapfrog, like where I’m at. Right. And take whether it’s the fix and flipping business education, business, whatever it is you need to be thinking about. Like, how is your life going to get better? How do you grow? How do you get yourself out of a job?

A little more than a year in and out each and every day, each and every week you got to think bigger, right? And sometimes that means getting, sometimes it means getting training, right? Like what you train people and you’ve got an event coming up here soon. I want you to tell us about that. And sometimes it means it’s just surrounding yourself.

Like you’re a member of our investor, fuel mastermind, and a lot of people come there and it helps them up their game because they get around people that are talking about thinking bigger.

Ryan “Rotty”: [00:16:53] And how do they, how do they move ahead?

Mike: [00:16:55] And it’s kind of like an accountability group too. It forces you to, like, I paid to come to some training are [00:17:00] paid to be a part of this group and it forces you to just think bigger.

Cause you’re like, I gotta get, I gotta get a return on this investment. Right. So I need to really learn something here. And I’ve kind of found if you don’t pull yourself out of the day to day, right? Every once in a while. And just use that as a chance to think bigger than sometimes months and years go by and you have an advanced

Ryan “Rotty”: [00:17:18] right.

I

Mike: [00:17:20] agree. I agree. Okay. The bootcamp that’s coming up, uh, coming up here and, uh,

Ryan “Rotty”: [00:17:26] this was a camp that we were supposed to do in April. And I had booked it. It’s called the boathouse. It’s beautiful. It’s in Disney Springs in Orlando and it’s probably my favorite restaurant in Orlando. Right. It’s great. Right.

So anyway, bottom line is we had it booked in April Colbert happened. So I, we got rid of that. And then, um, you know, first one I started opening up. It is what it is. So I called down there and I said, I was just down there about a month and a half ago. And I said, yeah, I went in there for lunch. And I said, is there any way to still do an event here?

And they’re like, well, yeah. So I kinda went through the whole, you know, Production process of setting that up and I’m like, you know, let’s go for it. Cause we could still make it virtual [00:18:00] at the same time we could live stream it. Right. That’s not a big deal. I mean, you did it with the last mastermind, so yeah, it’s very, very doable.

Uh, you can still two breakout sessions, you know, for those who don’t, who are still kind of wishy washy, cause there’s a lot of coaches that are gonna watch this, that or wishy washy about should I do virtual though? I say, shoot for a physical and do virtual at the same time. Uh, you know, at the end of the day and just give it a shot.

I mean, you know, one of the things that we have a challenge with that when you and I were talking about offline is that I only have a max of 50 in the venue because I’ve got to share the venue with the venue. So the venue is actually open while I have a private dining space. So, which is cool. You know, we cap it at 50 physically, but there’s no cap virtually.

So we have what we were obviously really well known for that project management camp. We’ve been teaching that for years and. We’ve always worked with like, uh, I would say those types of camps are usually for seasoned investors. Um, you know, look, he’s not going to understand what, how to project manage.

They don’t even understand how to acquire property. So why would I say, Hey, I’ve you should just come to camp. I’m not that guy. And I often screen people and say, you’re not [00:19:00] ready for bootcamp. Why don’t you go learn how to real estate invest and then come to me in a year, I’ll be there to help you all day long and I’ll make recommendations, say he’s got a good program or she’s got a good program, which go check them out.

Um, if you have any questions, reach out to me when you’re ready kind of thing. But yeah. And that’s one of the reasons I like you kind of shut away from the, the rookies at that time period, because we really were focusing on investors that were doing at least 20 deals a year. And then, you know, our group, our boot camps and Academy would make sense to them because now they know what they need.

They’re experienced enough to know where they’re making mistakes. So the bootcamp we’re putting together for November is the advanced project manager cap. And this is going to be a camp where we’re breaking down what the construction model looks like for any investor who’s doing more than 20 deals.

What each person is, how many people you need on staff, what their SOP is off of that staff. What are the KPIs for each individual person on that staff? And then what kind of CRM systems need to be built in? And basically how does a construction company work? Right? Because oftentimes, especially when I consult clients, I know I see firsthand that they’re [00:20:00] really good at the acquisitions.

And they’re really good with private funding or funding is not even an issue. And they actually analyze deals pretty well. And then that property is purchased and they just wait. And oftentimes I’ve seen some of our clients will wait. 30 40 days before they even start rehab. And I’m like, what are you doing?

You’re wasting too much time. Time is money. And they really are dependent on like the contractor to get their process start. And I said, no, no, no, no, no, sure. House, you have to start the process. This is your company. And what, first thing we say is what’s your construction division look like? And like, we don’t really have one.

And that’s what this camp is all about is we’re going to map process the entire business. And it’s really a financial camp. We’re going to talk about drama management, percentages, things of that nature, how to make sure your books make sense. So it is for the season and a rookie would be way too much for them.

They’re not even at that level yet. You know, trying to get a deal here. That’s what they need.

Mike: [00:20:49] This is more for just, this sounds like this is more for owners or if somebody was bringing somebody on to be

Ryan “Rotty”: [00:20:54] the project manager for company teams, So, if you have a project manager, you bring your project manager.

If you have a construction [00:21:00] coroner and a project manager and a bookkeeper bring the company, this is one of those camps where as a company, it’s like, I’m going to do two days something for 50 companies, plus whoever’s online, but we’re really going to tell it, tell you guys, and we’re going to break it down.

And everybody who shows up to camp is going to come up and share as well. What is your current model? And it’s going to be an open, like, like a mastermind is gonna be an open dialogue. Like we’re going to break this down together. And I want everybody else to see that you’re not alone. They, all of you are extremely close and you’re just making simple mistakes.

Cause nobody really is in construction. Unless you obviously came from construction. That’s different. There’s a lot of GCs that became investors. Like I did not a big deal. Uh, but this is mainly for the investors who need to learn what GCs do and how construction actually operates for them to say, Oh, and the greatest room in the world is when they had that aha moment, their head goes back and you, and I’ll call him on it.

And I said, Okay. What was that go with that? Is that because something’s happening right now on this project or your last project, or you didn’t do this yet? And it’s always all the above, like, yeah, dude, I got a phone call to make it go out in the [00:22:00] hallway and they do their thing. And that’s what it’s all about.

It’s actionable device that you do. Now. This isn’t something you just read a book and say, okay, good luck. Next flip. It’s like, no, dude, your flips need this. Now your company needs this. Now your bottom line is bleeding now. So those are the types of camps that we run. I mean, that’s, it’s all about now. We had the online Academy.

That’s really for the rookies who want to learn on their own it’s e-learning you log in, you get your credentials, take your time. You have any questions? I have a private project manager tool that they can just text us with all the students can. And I can answer questions for them here and there, but that’s more than now this route, but our camps are extremely elite camps.

I mean, you are sitting there and you’re going, I have a headache for two days and I tell people, bring Advil. You gonna have a headache because unfortunately, unfortunately you to think, you know, we have an exercise where I hit them with a timeline. I said, we go on the board. I write this huge time. I said, I want all of you to take five minutes, go on your laptop.

Sponge your most problematic flip. You recently done this complete. And I say, I want all the numbers on your timeline from the moment you got the lead to the month, you made the sale for moments under contract to them. I [00:23:00] want you close to the mommy started construction for mommy. Did punch system punches to go all, all the way out.

And we’re going to put days in between everything. Somebody should realize they had a project, 150 days, 190 days. 97 days and the rehab budget was 30 K. Yeah. And then they sit there and go, okay. And they started seeing where they’re missing. Where’s the problem, which section of this process is your problem.

And it’s always in setting up the job on time. It’s not even getting the job started, it’s setting it up. So that project management is 10 times easier. Right. All the things you deal with as a rehabber that are problem attic is because you didn’t plan for them and then rehabbing and all the construction, not just really in construction, you have to be predictive and proactive, not reactive.

You’re reacting. It’s costing you time and money. And that’s one of your key KPIs, right? So you have to be predictive and proactive, and the only way to predict your problems, if you plan, if you do the risk real shit, I think it’s still behind me. You have to look at the risk on every single project and say, okay, what are my challenges here?

And attack those [00:24:00] before demo day one so that you could predict when that hurdle comes. There’s so much to it. There really, really is. And. I enjoy doing it and I learn every flip. I still do. I I’m learning. I’m like, Hmm. I can’t believe I missed that.

Mike: [00:24:13] Yeah. Mean, there’s a couple of things. I think you, you would probably agree.

There’s so here’s, what’s coming guys for those of you that have been around for a couple of cycles, like Roddy and I have, there’s really a couple of things. I. True Tripoli. Almost every house I’ve done for the last five or six years has been much my, my biggest strategy extra than wholesale. Right. It’s worked really well, but it works really well in a seller’s market.

Okay. So when the market starts to shift or inventory on the market, now, you know, right now, if you have inventory, there’s so little inventory on the market that. You don’t, it doesn’t have to be a perfect house. It doesn’t have to be, you can get more for it than even if it’s perfect. Right. But when the market shifts inventory starts to build up, what happens is you need to shift more to quality, like prices, not.

Uh, price is not as, it’s not as easy to sell based on price [00:25:00] or, you know, imperfect houses. Now, when you have a lot, basically when you have more competition, you have to find a way to stand out and that’s going to be through putting out a nicer product, ultimately. So your rehabs are probably going to get, I

Ryan “Rotty”: [00:25:09] see.

So you said that that was key, right? They’re putting out a nicer product. Very rarely does an investor actually sit in that back to me. I usually say that to them and I’ll go into people’s markets. I’ll walk their properties with them and I’ll sit there and go. So this is I go show me what your average rehab is.

Oh, we do 35,000 or a hundred thousand. It’s a great show me one that’s recently done. So I want to see what a hundred thousand looks like. I’m not passing judgment, I’m there to help. So look at it. I walked the house. I look at the quality, right? I look at the quality chosen materials. I look at the design, look, I look at lot of things and I realized.

You’re a hundred looks like garbage. Your a hundred looks like you put 30 cane to this thing. And that’s another piece to rehabbing is quality. You have to have a quality standard and that’s across the board. And quality is another KPI in construction, right? The KPIs in construction to change all these budgets, timeframe is quality and sub inventory.

And there’s a little six one that highs that [00:26:00] no one pays attention to called safety, and you have to understand it all six of those affects every single project you do and you have to account for them. How does a major piece of the element. Everybody’s like, well, I got this, I got an awesome deal. I’m I’m going to make a hundred.

Yeah. It’s $5,000 on this deal. The ARB is five 50, six, 50, whatever. And I’m like, then the quality better be there. You know, you’re used to doing a $50,000 rehab. You just got, you just hit a gold mine with this, this acquisition. Good job. Awesome. But you’d step it up now because this rehab needs you to step it up.

You can’t do the same rehab you’ve been doing this one needs to be a little bit better, more quality materials. Better craftsmanship, quality install and some of the shit you let fly before you can’t let fly here. Cause it won’t get purchased. And it’s interesting because if you, if you as an individual, yeah.

I’m talking about an entrepreneur again. If they’re meant to do it, the investment, if you don’t have self quality standards for what you do, you’ll never be elite. Cause he leads his excellence. That means you just, you’re just, this is what I do and I want to with anything else, right? You have to have that quality standard about yourself and the [00:27:00] way you live for that to translate into your business and how you do business.

Right. If you have an expectation of yourself, you’re going to have the expectation of other people, but you can’t have it the other way around. I can’t expect Mike to be great. And I suck, right. I can’t cut corners, but expect you not to cut corners. That’s what leadership’s all about. So when you have that excellence in your mind and you have a process and you have this quality standard that will translate extremely well into your business.

And oftentimes I tell investors, consider it this way. Let’s say you say, Hey Rodney, can you invest? Give me any 50 grand. We got funded something private. When you come in, I’ll give you whatever. And I said, okay, show me your deliverables. What am I investing in? Think of it that way, if you can’t show me anything, right.

That’s one thing. If you show me this and it’s, and you said this a hundred rehab and it looks like a 35,000 a year, I’m not giving you 50 K right? I’m like, dude, your standard is sorry, man. I love you. But I don’t like what you’re doing here, man. I don’t want to put my money there. I don’t, I’m not, I don’t, I’m not comfortable with this.

Yeah, because you don’t have a quality [00:28:00] standard. So does everything I said makes sense. I mean, that’s just how

Mike: [00:28:02] I today I think for sure. I think that’s, that’s, uh, insightful for sure. And I think where we’re going in the market, like, I don’t know how fast we’re going to get there, but. There, the market’s turning.

There’s no doubt about it. Right? So once the government stops, subsidizing everything, like eventually people are gonna start to lose their houses. Like things are gonna happen. Or truthfully, I don’t think it’s even going to be as bad as it was on the last answered. I don’t know what you think. No, none of it.

Nobody has a crystal ball, but I’ll say this. A lot of people have a lot more equity now going into this next downturn and they can still sell maybe at a discount and get out and still have made some decent money over there. My point is, is when you go into a market shift and it becomes more of a buyer’s market, you know, you’re going to have to put up better quality product because you’re going to have a lot more competition.

And I’ll say this, even for, for wholesalers out there, really two things. One is, um, wholesaling. It gets harder in a buyer’s market. And the reason is, is when the market shifts and you’ve seen it here through the coping stuff, you [00:29:00] know, a lot of credit eyes up so hard, money’s harder to get or other money’s already to get, but FHA loans and other homeowners up because the government props all that stuff up and they probably always will, is still easy to get.

There’s still demand for homes to live in, right. Instead of investment properties necessarily. And even if you’re continuing to wholesale, I’ll tell you what, there’s nothing worse than you guys know this. Then a wholesaler that puts out bullshit numbers and they don’t even know, like, I think the best wholesalers are the ones that understand how to rehab because they know who their client is.

They know what their client expects. They know how to evaluate a rehab properly. Right. They’re not just like, ah, you know, I estimated 12 bucks a square foot or some, some number they just pulled out of their ear or whatever

Ryan “Rotty”: [00:29:41] on your, we call that Coolo. What does that mean? Your ass. Oh,

Mike: [00:29:47] okay. Anyway, go fast.

So we were talking about your, we were talking about your, um,

Ryan “Rotty”: [00:29:55] your

Mike: [00:29:55] bootcamp coming up. So it’s, uh, November 12th and 13th. Right? How do people, how do people find out [00:30:00] more about that?

Ryan “Rotty”: [00:30:01] Oh, that’s easy, man. They can go to our website. Here, I’ll type it in if you want, but

Mike: [00:30:07] say it on the show too. Cause most people will be listed in after

Ryan “Rotty”: [00:30:09] the fact.

Okay. So it’s www that the rehab depot.com forward slash rehab Academy or both, you’re just so many different pages, but just go there, you’ll see the length, the rehab depot.com. And you’ll see our bootcamps sign up for it. That’d be good for everybody to continue learning that this is the time for you to get prepared for 2021.

I was talking about a couple of our lenders that we have partnerships with here as a company and their data showing that come March next year. That’s when some of the foreclose are finally gonna meet the market. Um, so that’s the case. You got two quarters to get ready. It’s I look at it. And construction does take time to evolve.

It’s not something you just mastered today. It takes time. You’ve got to cultivate that. I mean, and that’s another reason why, you know, with us, I tell, I tell people all the time, um, you, people are like, why don’t you have sales reps and look, cause we don’t sell w we’re here for life. You come to us whenever you need us, because it’s based on where you’re at in your career, [00:31:00] when you’re ready for us, you know who to go to over here.

And that’s, that’s the beauty of our business model. If you ever need any help, you’re over here in the corner, just let us know.

Mike: [00:31:09] Yeah, well, but the good thing is there’s, there’s basically some limited opportunities to get to and learn for your academies now. So I don’t know if you even know when your next one is.

And clearly this one is a reschedule from April because of all the Kobe crap. So, you know, if you guys have been waiting, I know a lot of people have been waiting to. To have to have a good event to go to. Right. People gearing up. Now I know, literally yesterday I booked like three flights. I’m just like, we’ve been kind of tamed and I’m like, man, I’m going here.

I’m doing this, doing that. Like, let’s go. And I’m like, I’m ready to just get out. I know a lot of you are ready for that too. I’m not saying be stupid about it. Still be safe, all that stuff. But make sure you don’t miss out on some quality events, folks like radi, uh, folks like, you know, our investor fuel mastermind, people that are having events and high quality stuff like

Ryan “Rotty”: [00:31:54] through

Mike: [00:31:55] this process.

I promise you, one thing that we’ve been thinking about is how do we take it to another level and make [00:32:00] things better, better, better. So I think you’re gonna, uh, you’re gonna any of these types of events you go to through folks like Roddy, um, you know, he’s stepping up his game because that’s how evolution works.

Like we’ve part of this process was. Not just like, I’ll have to sit around and wait until I can teach again. It’s like, how do I make this so good that it’s on deniable that anybody should come. Right.

Ryan “Rotty”: [00:32:22] Cool. And that’s exactly what it is. It’s not, like I said, when we started working with the buyers this year, that was something that we never thought of six years ago.

It’s just the evolution of what’s happening, you know? And you start looking at the. The averages of all the challenges that you keep hearing about. And you’re like, all right, we got to put something together for that. And that takes time as well as, you know, to put together some kind of course or curriculum, and then be able to teach on that.

You know, what we do is very real when I say we, I mean, all coaches and, you know, it takes really some time to say, I know how to do this, but how can I convey it and teach it? That’s a challenge. And it takes time. And we put a lot of effort in, and like I said, it’s usually burning that midnight oil is when I’m putting in my effort.

[00:33:00] Mike: [00:33:02] Hey, you just got muted, buddy. Somehow

Ryan “Rotty”: [00:33:07] you will. So that it makes sense. You got to dumb it down still. Yeah. Yeah.

Mike: [00:33:12] Cool buddy. Well, thanks for joining me today. Good. Good to see you as always.

Ryan “Rotty”: [00:33:15] Thank you. Oh, fun. It was fun. Learning how to, it was fun watching you try to learn how to go live late in it. You stayed in your career.

Mike: [00:33:25] Well, Hey, it’s new new technology.

So that’s an inside joke for those of you that didn’t realize that I forgot to hit record for the first 10 minutes of the show. But, um, so guys, this is, uh, this is what we’re going to do. Going forward. We have this, uh, professional real estate investor show. Uh, we host them on flipnerd.com and we go live in the.

A professional real estate investor, Facebook group, which you can find by going to flippa.com/professional. If you’re not already a member of the group, we’re going to be doing these live on average. Once a week, sometimes we might double up and do a couple of a week to catch up on inventory. That’s kind of, that’s one of the challenges with live is, [00:34:00] you know, when you’re not live, you can record four shows in a day and do it all, all that stuff.

When you’re alive, we try to make it as predictable as possible. But if you’re a member of the group, there’s a lot of great discussion going on here and we’re trying to take it to another level. Still just getting started with people that are already actively doing deals, helping one another. And there’s so many Facebook groups, this is never going to be a Facebook group with a hundred thousand people in it that every day somebody is asking where the light switch is like, this is people that are experienced and seasoned and helping one another.

And, uh, what were you gonna say, Roddy?

Ryan “Rotty”: [00:34:31] I was gonna say, actually I enjoyed the, I liked being on calls like this, where it’s conversational, you know, you, sometimes you got people’s podcasts, it’s podcasts, right. But being in the group that this has meant for. We all, we all have earned the right to do, be in the group, so to speak, right?

So this is the kind of thing. I like the dialogue. Let’s just talk openly about what’s going on because I know I can relate to a lot and other people can relate to me. And we were all in this at the end of the day together. And that’s why I enjoy this type of conversation. Cause it is a podcast, but you know what?

It’s actually just a live [00:35:00] conversation, which I liked. I liked that vibe. Yep.

Mike: [00:35:02] Yep. Cool. So everybody, thanks for joining us on this first episode of the professional real estate investor group. Again, you can find all these shows. We have, we’re running three shows right now. You have the Flipgrid real estate investing secrets, which is evolved a lot over the years.

That’s my first show that I started six and a half years ago. That was more of an interview style like this it’s evolved into me sharing more quick tips or some thoughts or things that are on my mind and things I’ve experienced the real, the, uh, um, investor fuel mastermind show, where I interviewed members of my.

A investor pupil mastermind rod. He’s actually a member of the investor fuel mastermind as well. And you haven’t yet checked out an [email protected]. It’s just an amazing group of caring people. And then this show, the professional real estate investor share where we’re interviewing a lot of other people in the industry to kind of bring to you.

What’s working now. What’s not working, hopefully learn and grow together so she can find all of them on flipnerd.com though. flipper.com/shows. Appreciate you guys a bunch. See on the [00:36:00] next

Ryan “Rotty”: [00:36:00] show. Love you guys.

Mike: [00:36:02] Thanks for joining me. On today’s episode, there are three ways I help successful real estate investors take their businesses and their lives to the next level.

First, if you’re in search of a community of successful real estate investors that help one another, take their businesses to the next level and a life changing community of lifelong friends. Please learn more about my investor fuel real estate mastermind. By visiting investor, fuel.com.

Ryan “Rotty”: [00:36:32] If

Mike: [00:36:33] you’d like a cutting edge solution for the very best

Ryan “Rotty”: [00:36:36] done for you

Mike: [00:36:37] lead generation on the planet where we’re handling the lead generation.

For many of America’s top real estate investors, please learn [email protected]. And lastly, if you’re interested in a free online community of professional real estate investors that isn’t full of spam solicitations and newbie questions, [00:37:00] please join my free professional real estate investor Facebook group by visiting flipnerd.com/professional.