This is episode #375, and today’s guest is my buddy Stan Gendlin.

Stan is the poster child for how to start and grow a real estate investing business, if you were to build out a blueprint. He started by learning the ropes working for someone else for a few years, then went out on his own. After he and his wife realized that their business was doing well…but THEY were doing everything, they built out a team which has allowed them to scale up. Building a team has allowed them to expand into new businesses like new construction, and commercial properties.

In today’s show, we’ll learn more about Stan’s evolution as an investor, and explained in a way where you can learn from his progression.

It’s a great discussion…and I’m glad you’re here to be a part of it!

Please help me welcome Stan Gendlin to the show.

Highlights of this show

  • Meet Stan Gendlin, real estate investor and developer.
  • Listen in as Stan shares the importance of identifying what you’re good at, and finding others to do the rest.
  • Join the discussion about how to determine the value of your time, and where to start outsourcing tasks.
  • Listen to Stan’s best advice on how to build a business over time.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike: This is the flipnerd.com Expert Real Estate Investing Show, the show for real estate investors, whether you’re a veteran or brand new. I’m your host, Mike Hambright, and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility, and taking control of your life and financial destiny, you’re in the right place.
This is episode number 375, and today’s guest is my pal, Stan Gendlin. Stan is the poster child for how to start and grow a real estate investing business if you were to build a blueprint. Now, he started by learning the ropes and working for someone else for a few years, then went out on his own, actually in a whole new market. After he and his wife realized that the business was doing well but they were doing everything, they built out a team which has allowed them to scale up.
Now, building the team does not only allow them to scale their existing fix and flip business and the wholesaling business, it’s allowed them to expand them new businesses like new construction, some development and commercial properties. In today’s show, we’re going to learn more about Stan’s evolution as an investor, and we’re going to explain it in a way to where you can learn from his progression and maybe apply it for your own situation. It’s a great discussion. Stan’s a great guy and I’m glad you’re here to be a part of it. Please help me welcome, Stan Gendlin to the show. Stan, welcome to the show.
Stan: Hey, excited to be here. Thanks for having me.
Mike: Yeah, great to see you. And I’m really excited to talk about this topic, too, because, you know, I teach . . . I’ve always taught a lot of new real estate investors and it’s funny because some people, they dive right in and they want to go from, like, you know, no experience and not even really know what they want to like on the top of the world like super fast. I appreciate that drive.
But if we talk about your kind of careers, your real estate investors so far and you’re a young guy, you’ve got tons of room for like opportunity and growth, it’s like if you had to draw like a stair step of how you start and then where you’ll be in a certain period of time, like, you are kind of the poster child for that going from, you know, we’re going to talk about from working for somebody else and learning the business, to going out on your own and starting your own market, doing things yourself, building a team, getting in the building eventually, and now trying to move away and kind of manage this whole, like, really incredible business that you’ve built from afar.
So it’s not that everybody wants to move out of a town they’re in, but I know you guys move specifically to where you’re at to build this business, right.
Stan: Yeah. I mean, we think to rebuilt specifically because we knew there was, you know, thousands and thousands of jobs coming here, and that always means that, you know, more people need a home. So it just kind of made sense that this area was going to get really attractive really quickly.
Mike: Yeah, yeah. Hey, before we kind of dive too much into this, why don’t you tell us little bit about your background for those who don’t know you and we can learn a little bit about you and then we’ll kind of dive into how you got started in real estate investing.
Stan: Yeah, sure. I’ve been investing since 2009, so about eight years now, eight full years and I started in Trenton, New Jersey. I was working for a couple other guys that were flipping short sales at the time which blew my mind because I was making a minimum wage straight out of college and thought flipping houses was like a late night TV scam. So in a show people were doing and guys, you know, in their mid-20s making, you know, $15,000-$20,000 a month just blew my mind at that time.
So I went to work for those guys for about two and a half years, and then after that, I had moved out to San Diego to work for another large investment company, and there, I learned how to buy and rehab houses on a very high level in one of the most competitive markets in the country and one of the most expensive. And then after another two and a half years, that’s when I met my wife. She encouraged me to, you know, I really needed to start my business, and she was really passionate about real estate. So we picked, rebuilt based on what we said before, moved here, kind of on a whim and just started building our business, kind of like everybody else from the beginning.
Mike: Well, let’s talk a little bit about working for somebody else, because I think a lot of real estate investors, I don’t know if it’s ego or what it is, but sometimes when they get started, they just want to go from. . . I’ve no experience, sometimes people don’t even want to coach or mentor. Like, I’ll just, you know, learn everything I can on YouTube or whatever.
Let’s be honest, the information is all out there, but kind of how it’s packaged and what you do when you just made an offer on a house and you’re scared to death and you have nobody to talk to. That’s where it’s different. But your path of specifically going to work for other people that knew what they were doing to learn the business, talk a about that a little bit and what your thoughts are on that, if you had to do it over again, I guess.
Stan: Yeah. I mean, I never intended to work for anybody with the idea that I was going to leave, take as much as I can and leave, do my own thing. It just kind of happen that way. I definitely feel like going to work for somebody and if . . . here’s a lot of great investors in most parts of the country where you can really grow inside that business and hit a lot of your goals without having to go ahead on your own.
But I think it makes a lot of sense when you’re first starting off if, you know, maybe can afford coaching or you can’t commit six months of your life and making very possibly very little income to kind of learn the business, to go work for someone that’s really, really experienced and then to be able to make a lot of money and learn the business with somebody. But you should always go with the intention, I think, that you’re going to add a lot of value for a good period of your time and not just go there and take as much as you can and leave.
So, I mean, I think I would probably not have done it any differently. I probably would’ve worked for someone just because I didn’t know anything. I couldn’t afford coaching. Everybody that was around me didn’t believe in this whole type of business. I don’t think I could’ve even gotten anyone to invest in coaching for me. It’s just no one understood at the time. So, I don’t think I would’ve done anything differently. I worked for a lot of really great people that added a lot of value to me.
And I definitely encourage people if you want to start and you don’t have the money or you just. . . it’s hard for you to give up a good portion of your time to do it on your own, if you have family support or whatever. There’s a lot of awesome investors in cities all around this country and it’s an awesome experience working with . . . I mean, you get to learn some really high level things that it might take you years and years to learn on your own.
Mike: Yeah, I mean, naturally, it’s going to, yeah. It’s interesting, because I’ve been thinking about it as we’ve been talking here, and, you know, I cannot . . . let me tell you this, I cannot count how many times people have asked me to come extract value from me. Like, can I buy you coffee and pick your brain for a couple of hours? Or, you know, stuff like that which early on, I just don’t have the time to do those things anymore. I did some of that early on, but over time, you kind of realized like, “Hey, I told the person a bunch of stuff and then they never even thanked me, and I never heard from him again.”
There’s so much of that and I would encourage people that are listening to this. If you want to learn . . . but let me kind of give you, on one hand, I can’t count how many people have asked, “Can I come take . . . just can you teach me everything you can in a short period of time and then I’m never going to hear from you again?” But I can remember on one or two fingers the number of times people said, “Is there any way I can come work for you or work with you and try to, like, add value that way?” Which is that’s what we’re talking about here, right? That’s such a great opportunity.
When I find people like that and they have a lot to give than I want to give more. And I don’t mind teaching people that might be my competitor someday. I mean, I’ve pretty much done that for the last 10 years. But we find ways to do deals together and stuff ultimately, so I don’t know.
Stan: Right. And especially with, like, new wholesalers, I mean, we do that all the time, like, “Hey, you know, you’re going to spend money on marketing? Why don’t you bring us all the deals? We’ll help you negotiate them, analyze them, maybe give us first dib to try to buy it from you so you can make money.” But I mean, I love doing that like you said, people that are trying to add value to you and not just taking it and then disappear.
Mike: So people that are listening to that, like, listen, you know, rewind that and listen to it again because there’s a lot of ways to learn this business and there are some great opportunities to learn it on somebody else’s dime. But you’ve got to do it in a way to where you’re adding value to them as well.
Stan: Absolutely.
Mike: Yep. So, you work for somebody else then you guys moved to Greenville, South Carolina and opened up. . . not only went on your own but you moved from San Diego, like, to the other side of the country in some land, far off land where you knew nobody. You were doing like the hardest way, like, you’re on your own in a new land, no family, no friends there, just starting from scratch, right?
Stan: Yeah, and I got to give it to my wife for trusting me because she told me when we were coming here, she was thinking it’s going to be several miles between each house. That’s kind of the area we’re moving to, and that was going to be like really, really rural. But it’s a beautiful city, we love it here.
But yeah, we picked this market just because jobs are coming and got here, just really started from scratch because after working for someone for several years in San Diego, I realized when I got here, maybe I should’ve paid attention to something more than what I was doing, because I knew how to buy houses. I had no clue how to rehab them, finance them, fix them up, sell them, run an actual rehabbing business. That was totally eye-opening that I did not pay attention to anything else but being great at acquisition.
Mike: Your function, yeah.
Stan: Right.
Mike: Yeah, and I think that’s where, I mean, let’s be honest, the most important role in a real estate investing business especially when you’re newer and smaller is acquisitions, like finding deals. But there’s so many other things that have to happen and a bunch of it you’re not . . . there’s no investor that likes to do all of it, like bookkeeping and tax preparation, like, nobody wants to do that, right? But it’s got to happen. You have employees, you got to do the payroll. Like, all those things you have to do, and I think a lot of times people just assume they can dive in and there’s all these aspects of the business, but they’re just focused on one.
So what would you do if you had to do it over again. I mean, a lot of times when you work for somebody else, you’re never going to learn all those aspects of the business, unless they were like grooming you to take over their business. I mean, it just doesn’t make sense to have like an internal rotation where you’re learning every role, but how would you encourage people if you had to do it over again to maybe get some more exposure experience to other areas inside of another company?
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But how would you encourage people if you had to do it over again to maybe get some more exposure, experience to other areas inside of another company?
Stan: Well, I mean, not only that, I’m thinking if I moved here and wanted to rehab properties just like we did when we got here, I probably should’ve partnered with some experienced investors and say, “Hey, I’ll bring the deal, I’ll bring the money. You renovate it. We’ll split profits.” But then I could’ve learned the whole way. Instead I kind of jumped in, was rehabbing these properties with my wife, neither of us knew how to rehab properties or knew the terminology, even on site. I had no clue what a soffit or fascia was. So it was a very difficult experience.
And then actually after that, about a year in, we partnered with someone and we were able to learn the process and, you know, build up some capital. I think if I were to go back, I probably wouldn’t try to be as, maybe not greedy because I didn’t know. I would’ve definitely partnered and at least, I would’ve made half of something instead of all of a very small piece that had ended up at [inaudible 00:12:39].
That’s a big piece of advice. There’s a lot of investors, if you can bring them a juicy deal, and all they have to do is rehab it. They don’t have to bring any capital. You take care of that. I mean, I do it in my market. People bring me deals, they’re bringing me the money, I’m doing all the work and I’m splitting profits with them. So, I guess that’s a great way to learn that side of the business, rehabbing, which is probably the most difficult and not have to try to do it on your own.
Mike: Yeah, yeah, I agree with that. And I’ve been doing a lot of that lately, too. By the way, if anybody’s is in DFW area and you’re listening to this, I don’t normally do a lot of plugs during the show, but we do more of that now. If people will find a deal, and that they would traditionally wholesale, and they could make more money, even getting 50% of a rehab. It’s like bring me the deal and we’ll basically fund it, rehab the whole thing, sell it, and send you a check and we’re done, like you never literally have to do anything again other than assigning it to me for a buck and, like, the rest kind of takes care of itself.
So, I mean, I think it’s a business maturity thing in this business where you start to get more experience like you have now, and you just start to realize that there’s a lot of JV opportunity or ways to work with other people that you might have historically viewed as your competition, right?
Stan: Correct. I think like we talked about in the last time I was on, I think that’s the best way to grow is to bring on experienced partners and you [inaudible 00:14:02] value. If you can master the one thing most people have the hardest time learning which is finding the opportunities. So you can be really good at finding opportunities. You can bring deals to builders, developers, rehabbers, office guys, multi-family guys, and you can get a piece of that action and learn along the way.
Mike: Yeah, absolutely, absolutely. Awesome. So you went from moving to a new market, and then I know when we were discussing this beforehand, the challenges that you were doing everything, or you and your wife were doing everything, right?
Stan: Everything, yeah, from bookkeeping to raising capital or rehabbing. I mean, I was going to Home Depot three or four times every day trying to figure out what the heck these materials were that we needed because I didn’t understand anything, finding deals, trying to sell them, plus I have a personal life and be a husband and wife as well. But when you’re starting out and the way we do, we bought like five houses in the first 30 days. And we completely ran out of money. It was super stressful. I would not encourage that to anybody.
So it’s definitely take your time, partner out, and then maybe just wholesale the first couple. You don’t need to make these giant checks, maybe do one rehab and wholesale four instead of five rehabs. I think that was probably what I would do differently if we started again.
Mike: Yeah. And then along the way, you kind of learned, right? And then I was like this, when we started early on, we were doing a lot more. Then you start to realize, the only way I can scale this, and the only way I can have, like, be an entrepreneur and not just I’m self-employed now, is to start to build a team. So talk a little bit about your kind of transition of where you realized that you guys can’t do it all yourself. It’s just not possible.
Stan: Yeah. I mean, I think about a one year into our business, we realized that we have about half the money that we came here with from San Diego after doing like a bunch of deals, like we realized we just spend all this money and we have less money at year end then we actually started with. And a lot of it was because we’re doing just everything ourselves and we’re doing a poor job at it. So that’s when we realized we’re going to need more deals.
We have to have partnerships as well as having help to do just the basic day-to-day things that we can hire out like admin stuff, filing paperwork, calling, utilities, garbage cans, calling for toilets. I mean, I would spend an hour every time to turn the electric on at a house. It was just a very bad use of time. And that’s when we had the kind of aha moment that we need to basically build the team if we’re going to grow, otherwise, I felt like we weren’t going anywhere.
Mike: Yeah, yeah. And there’s a . . . it’s unfortunate but in this business, there’s a ton of that lower level administrative stuff that it just has to happen. If you can’t get the utilities turned on somewhere or little things like that, then you can’t move forward, but it’s just not the best use of your time if you’re taking the time away from finding more deals or hiring a key person or things like that.
Stan: Yeah. And I would say also, I mean, your first hire usually should be an admin to help you with a lot of that stuff. But I would say your next hire after that, if you’re building a team, it doesn’t have to be acquisitions or rehab or just . . . I would do it to wherever that you’re not as passionate about. Like, I just was not passionate about the rehabbing process.
So we had got a partner to help us with that because we just weren’t good at it. I didn’t enjoy it. We didn’t have any systems for it, but some people might love that and be great at that, and they just don’t enjoy the acquisition process, the negotiating, the follow-up and all that that goes into it, or the marketing. So I would recommend your next hire after some admin is whatever you’re just not passionate about.
Mike: Sure, sure, yeah. Talk a little bit about, because you said you were like a year into it when you started realizing you guys were overworked, you’re doing everything. You’ve got less money than you started with. Probably a bunch of it tied up in deals, I’m guessing. But then you have this challenge of even in your mind if you know, well, I need to hire somebody, and then you’re thinking, “Well, how am I going to pay for him?”
A lot of times as real estate investors, we’re used to buying stuff at discounts. We’re used to, like, using more sweat equity especially early on than actual cash. And so it’s a tough decision to say, “I’m going to add to my overhead.” Especially when you’re newer in your business. So talk about . . . I guess talk about what you did but then maybe more importantly share if you had to do over again or you were talking to somebody on a podcast that thousands and thousands of people are going to listen to you for example, what you would maybe advise them to do to cross that bridge, because this is a difficult decision, right?
Stan: Yeah. I mean, when we were first getting started, we needed to bring on help. I mean, we brought on, I think, one of the only people that would do it at such a low discounted rate and add that much value and that was my mom. So she was helping out a lot, and definitely having family help out in a business like this is I see it always a popular choice. And it depends if you do it right it can work out or may not work out.
But again, if you need to bring on help, I would just consider maybe wholesaling the next two or three deals instead of taking them on. And I would say for anybody that’s wanting to rehab, one of the realizations I had early on was the cost that you have to or count for when it comes to buying and rehabbing property especially once you’re getting started and using hard money which a lot of people do. You typically have to put down at least 20% which in most markets, it’s anywhere from 20,000 to 40,000. So let’s just say 20,000.
When you’re talking about points, closing costs and your down payment, you have 20,000 out of pocket. Then typically, a lot of hard money lenders will refund you the rehab funds after you’ve spent like 20,000 per property. So you have to spend another 20,000 just to get that. Then you have your monthly interest payments, insurance, utilities. So I would say you need to allocate anywhere from $40,000 to $45,000 per property for each project. And that’s something I didn’t realize. I thought I’m only putting like 20% down and that’s all, but not realizing the whole rehab money that has to be floated back and all the other costs that go in it.
Mike: Yeah. Talk a little bit about the justification, though. It’s easy to justify now but for investors that are struggling to add overhead in terms of people because a lot of times, you’re used to doing everything yourself, “I’ll just do it, I’ll just do it, I’ll just do it.” And you’re like, “Okay. Well, I’m going to bring on a $40,000 a year admin now.” So that’s another, with taxes and everything, if they’re an employee. So four to five grand a month, that you don’t have before because you were doing it.
But you know after you get them up and running, it makes your life like a ton easier. But there needs to be like a business case for it, like you want to say, “Okay. This is going to help me. You know, I’m going to pay $40,000 a year but if it helps me make another $100,000 a year,” or whatever the number is, but just talk about, because a lot of real estate investors that they know they need to do that, but they don’t do it because they’re too cheap to do it, even though they know in the long-term it might be the best thing. But just talk about kind of how you balance that.
Stan: Oh yeah, and we would basically look at like, you know, if I had 40 more hours per week, because when you’re starting out on this business, you’re not spending 40 hours a week. You’re easily spending 100 which I definitely did. Seven days a week, sometimes 3 a.m. to 10:00, 11:00, 12:00. So just having those 40 hours back, I mean, if you’re good at acquisitions, which you probably would be before hiring this person, I mean, you can easily wholesale another one to two properties per month. And usually, that translates to at least, you know, $10,000 per property. So, you should be able to add another 20 to 40, and maybe even one rehab project. If you can get one more rehab project in a whole year of having that person, then that will pay for that person right there.
So I think it’s really easy to justify in most markets, and that’s kind of how we looked at when we hired our project manager who, I mean, he’s getting about a $50,000 salary. And for us on a lot of projects, it’s one single project. Plus he’s getting a lot of bonuses, but I think that’s the easy way to look at it is looking at your market and see how much you make per project on wholesales or rehabs and see how many more can you do if you brought that person on. And a lot of times, it’s usually like one or two more projects or wholesales that will justify bringing that person on. So, it’s a pretty easy way to look at it that way.
Mike: Yeah. And some advice I would give to people, too. I didn’t look at it like this early on when I got some advice along the way, that basically said, “Hey, even if you bring on a person that’s not typically a . . . they’re more of an expense center than a revenue center, you know, like an administrative role. Find ways or I have VAs and stuff. Just try to find ways for them to help generate revenue as well. Like, it could be teach them how to do some things in lead generation so that you could potentially bring more revenue and instead of they’re just kind of managing stuff that you’re already paying for, right?
Stan: Well, I mean, I would agree with that but also, I mean, if they’re doing work that somebody else was doing, usually it’s the owner and the owner is the, yeah, it’s the money generator. So really, they are a money generating position because they’re afraid you have massive amounts of time for you to generate money. So, that’s how we kind of justify it.
Mike: Yeah. And then so along the way, I know you started to do some building as well. But also, I just want to talk about just the realization of, you probably are wholesaling, fixing, flipping . . . there’s some decent money coming in. And then you realize that, “Hey, I’m only as good as my last deal, right?” I sold that deal and never made any money from it again, and you need to build long-term wealth through rentals or other things. So kind of talk about where you got to that point in your business?
Stan: Yeah. So, I mean, the main driver for starting to acquire rental properties besides being long-term wealth is realizing at some point in the next couple of years, there’s going to be a downturn. And during that downturn, a lot of investors who are just overleveraging or not preparing are going to have to let their teams go or stop doing what they’re doing. And we love our team. You know, we don’t want to have to do that, and we thought, “Hey, if we have this much money coming in every single month, then we can weather that storm, not have to let anybody go. We can keep our company going.”
So a big part of that was, you know, to maintain our lifestyle as well as make sure our team and their family is can maintain their lifestyle and not have to let everybody go and just hold it in. So I was really thinking about, how do we sustain the business in case there’s a downturn or just we make couple of mistakes and have a couple bad months. We didn’t want to let anybody go because we love our teams. So that was kind of a driving factor but also at the same time, it is to start up every month in the black whereas if you were just fixing and flipping and wholesaling, you start every month in the red.
Mike: Yeah, it’s important to me. I would argue that most of us got in this business to make more money but then you realize that if you don’t go . . . when you get to a point to where you can . . . I always hesitate to call stuff rentals passive because it depends on how you’re dealing with them but there’s still work involved, right?
Now, you have to . . . it’s nice when there’s money coming in and you didn’t do anything like yesterday for it. You don’t have to go work really hard to get money coming in. And with rental properties, I mean, you might buy properties that are cash flowing initially. You should buy properties that are cash flowing initially. But it really takes time and a larger portfolio to realize that, “Wow, this can really add up.”
Stan: Oh, yeah. I mean, I think we’re about three dozen properties in. I’m still waiting to make some money on one.
Mike: Yeah, yeah. When you’ve got like your first five or even ten, you’re like, “What is everybody talking about these things for? This is a pain in the butt.” Over time, when you just have a large enough portfolio or something really bad happens but you’re still cash flow positive because you had a portfolio to offset that, and you start to pay down debt and it depends on your strategy. We try to pay off a lot of our debt because we want to cash flow more in the future. So we’re pretty aggressive on that. But when you start to see it add up, you’re like, “Wow, this is . . . I get it now.”
Stan: Yeah. And I don’t know a lot of people that have become wealthy through flipping properties. If you rehab properties or wholesale, you know that money goes out as fast as it comes in especially when you’re spending 20,000, 30,000, 40,000 a month on rental . . . oh, I’m sorry, on marketing. You’re putting those big down payments down, paying all those utility costs, insurance costs.
I mean, that money goes as fast as it comes in. So, like, the only way you can actually retire or build wealth is through rental properties, cash flow, and multi-family commercial. And I feel like rehabbing wholesale is the means to do that. It’s not the end game.
Mike: Yeah. It enables you to keep some. I mean, that’s what I always teach people is like, there are some people that are just . . . they just want to buy rentals. And if you only buy rentals, well, you have to . . . if you have some overhead, you start to cover that cost which is hard to do through just rentals.
So, I’ve always used, like, the fact that I’m an active investor at wholesaling, rehabbing to allow me to come across opportunities that I just cherry pick and put one away, put one away when I can afford to. But if you’re not doing that, it’s like, you have to have some other business or be already well off or have a job that pays really well that allows you to, like, bear any expense you’re going to have associated with that, right?
Stan: Yeah. I mean, it’s going to take me years and years of buying rental properties before you can just live on them. And I feel like we have 35 or 36 at this point. I mean, I don’t think I could live on them at this point, just because if you’re actively buying them, you’re always going to have issues that come up, your money is going to have to keep being rolled into them and I feel like you have to get a couple dozen. You get them all stabilized, rehabbed, and then stop buying, and then pay down that debt like you said. Otherwise, you can’t just do that.
Mike: Yeah, yeah, awesome. So then you evolved into taking on some new construction, right?
Stan: Yeah.
Mike: Yeah. And it’s a natural fit for a lot of rehabbers. I actually have never done any new construction, but I’m intrigued by it, especially in a market where it’s difficult like this and it seems like the market where I’m at, Dallas-Fort Worth, is just on fire in terms of . . . there’s a lot of building going on but there’s not a lot of . . . well, there probably is a lot of infill type building. I mean, that’s what I would probably do. I know you’re doing some bigger developments, but talk about kind of that transition in because, I mean, maybe share it, like, why you did it.
Stan: Well, the first ones, the first new construction we did were almost by accident where we were just marketing for houses to flip and one of the sellers called us and they were on a four-acre piece of land in a prime part of town. And our builder partner at that time on that project said he can get about 25-27 homes on this piece of land.
And that’s how it really started. It kind of opened up my eyes, like I’m thinking really small every time a house comes in. I’m not even looking how big is the land, how many houses can you get on them. I’m just looking at here is what the house is worth. Here’s what it’s worth to fix up based on square footage of the house, and that’s when I realized, like, there are so many double lots and extra lots or houses that you can knock down and build two or three.
And that’s a really great way to look at it because people love new construction inventories, record low all over the country. And there are some really big margins you could make on it especially when you buy a house, you chop off a lot, you sell the house, break even on the house. Now you got a free piece of land and a lot of times you can make six figures on building a new house and it’s a lot easier to build a new house than it is to rehab a house. So that was another big realization. I mean, our builder is awesome and he’s building these things in 75 to 90 days. That’s almost as fast, if not faster than some of our rehabs.
Mike: Yeah, yeah. That’s awesome. Yeah. I mean, I have this realization early on and again, I haven’t done any new build stuff but then ultimately, I’m in the opportunity business, right? I’m trying to find ways to arbitrage between somebody wants to buy and somebody that wants to sell. And so, I think that that . . . I mean, it’s an interesting observation that a lot of people don’t . . . I’m not saying my observations are very interesting.
But I’m saying, at the end of the day, we are in the opportunity business and I think probably that opportunity that you’re talking about that you’ve done more than a lot of things is that people should not try to take that on themselves if they’ve never done it before. You can spend so much time with permitting and authorization to build all sorts of stuff, grading, that’s a whole other business, right? I mean, that’s one where you definitely need to find somebody that you can partner with or work together with, right?
Stan: Oh yeah, and there are so many builders that would love for you to bring them money and a piece of land, and hey, build me a house, we’ll split our profits and they don’t have to actually . . . they don’t have to bring any money. I mean, they love doing it and in almost every major market, it’d be so easy to find a builder to do that. You don’t even have to partner with them. You could just say, “Hey, build me a house. I’ll pay you this much per square foot,” and you know what the house will sell per square foot and you make your profit in between. So it’s a really easy business. It’s actually easier than rehabbing.
Mike: Yeah. Yeah. Awesome, awesome. So now, you’re going for the granddaddy of all things. You go and moved across the country, built up a business that’s doing really well. And now you’re going to move back across the country back to San Diego and manage your business from afar. So kind of share . . . I mean, I know that there’s a lot of personal reasons. You liked being in San Diego. You have a lot of friends there, have a lot of relationships there and probably was your intention was to move back at some point before you even moved away, right?
Stan: Yeah. And I mean, my wife and I have always said we’re going to be kind of nomads probably most of our life. And we were talking about where we’re going to move to after San Diego. So, we’re just going to move around. But yeah, that was kind of . . . we’re moving back mostly for personal decisions, but I think it’s a good test for anybody that wants to run their business and not have to be there on a day-to-day basis to be able to go on vacation for a month or two. And one of my mentors he says, “If you can go on vacation and you have more money in the bank than when you left, you have a business. If not, then you have a job.”
Mike: And you guys just did that, right? Didn’t you guys just go like around the country for a long period of time, right?
Stan: I mean, it seems like right now, we’re traveling every week. Like, we’re going to Haiti this week, then we’re going to Boston the following week and then San Diego. We have a lot of traveling. So we’re kind of enjoying the perks of building a business and spending so much time. I mean, that’s kind of what having that safety in the rentals, having and building the team, and being diverse in different kinds of business allows you to do. And that’s why we’re also getting right now into commercial buildings and multi-family to continue to take the next step of evolution and get some bigger, bigger properties.
Mike: Yeah, that’s fantastic, yeah. And we got to emphasize the importance of having a good team to do that, right? I mean, because, you know, things could fall apart really easy if you don’t have the right people in place. And they don’t . . . we talked about this a little bit before we started recording of having a team that they need to understand just how important their role is, right? Like, they need to be given the authority to kind of make decisions and do things on your behalf for the kind of greater good of the company and not just . . . I’ve kind of felt like that before.
Like, I come into the office and I was like, I think I cause my team more work when I come into the office sometimes. I know it creates more work for me, so truthfully, I work from a coffee shop like almost every morning for a couple hours because it just allows me to get stuff done. And most of my team, we all like each other. We like to talk to each other.
Sometimes, we stand around talking too much, like, “Oh, we got to get some work done. You guys, let’s stop talking.” But, yeah, I think it’s important to have the right people in place that understand kind of their role in the overall business. Kind of share your thoughts on how to build a team that can enable to kind of run without you while you’re there.
Stan: Yeah, I mean, number one mistake I see a lot of people make is when they’re hiring people they’re trying to go for the cheapest possible person they can find that can do that job. And, it’s kind of like with anything where you’re buying something, and you get what you pay for if you buy something very low quality. The person has no experience. They’re not really that motivated but they’re willing to do what you want for 10 bucks an hour. You’re going to get someone that might not be there a long time or just not as enthusiastic day-to-day where most of our team right now are in six-figure positions and we love that.
We’ve gotten to a point where, after making a certain amount of money just don’t get excited about making much more. So we’re always thinking how do we help our team achieve their goals? How do we help our investors achieve their goals? And you have to generally want to care to help your team grow not just always be thinking about yourself making more money or your company making more money. So we generally care about our team and making sure they hit their goals. And that’s probably one of the biggest things to retain them long-term is to make sure, you’re asking them what the goals are and helping them achieve their goals.
So a lot of them have similar goals to getting rental properties and building their wealth, and you really need to know that and focus on that, too. You can’t just be all about you. So I think that coupled with, I mean, hiring best people you can find rather than the cheapest is, I mean, two of the best ways you can retain people long-term.
Mike: Yeah, absolutely, absolutely. And I think I’ve gone through that same thing where I didn’t . . . I was just . . . especially from an admin standpoint, like admin is really . . . I was just like, it’s kind of a necessary evil. I just need somebody to answer the phones and do stuff to saying, you know, “Well, what is it that you want?” You start to kind of ask questions of what they want. Sometimes it’s not money, sometimes it is.
And then thinking more about kind of building a team to where you . . . you’re kind of surrounded by people that you truly care about. Like, I’m worried about you. I’m worried about your well-being. How’s your family doing and what’s going on there? And it just makes everything better because we work hard and you don’t want to look up and have your legacy be that you treated people like they were just expendable all the time and you got what you wanted but they didn’t.
Stan: Yeah. I mean, even like an admin, I think, you know, the way we created structured deals, like our rentals for example, I can probably help our admin buy one rental property every couple of months. And, I mean, that’s not a six-figure position in our company yet but they can continue to build their wealth and build large amounts of money just like the rest of us. And that’s something we actively talk to them about. And that’s why also company culture is pretty important.
So people understand how everyone should operate, how they should perform on a day-to-day basis. And a lot of times, that starts with you as a company owner, so I’m on the phone with them every single day checking in, seeing what they need help with, asking them about . . . making sure they take vacations and that’s how one of our company policies is you have unlimited vacation time and you have to take at least two weeks a year.
Mike: Oh, wow.
Stan: So I don’t care how often people go on vacation as long as they’re getting all their work done and we’re hitting our goals.
Mike: Yeah. Wow, that’s awesome. Are you hiring?
Stan: Yeah, we’re always hiring.
Mike: Yeah, awesome. Well, Stan, if folks want to learn more about you or get in touch with you somehow, where should they go?
Stan: Yeah, they can find me on Facebook, that’s Stan Gendlin or on Instagram at Stan Gendlin. And then I’ll be speaking in Phoenix in January at the Find and Flip Summit. I’m really excited about that. It’s going to add a lot of value. But I’ll be also putting in a lot of free content online on my Facebook page and I’ll probably be creating a business page to continue to add that content online.
Mike: Cool, cool. Well, I have some links down below for folks to find you. So, thanks for spending some time with us today, my friend.
Stan: Yeah, I always love being here. You’re a cool guy. You’ve helped me a lot over the years, too.
Mike: I appreciate that, I appreciate that. I always enjoy talking to you. So, everybody, this was episode number 375. Every time I . . . I’m proud of myself, every time I say the number, that’s a lot of shows.
Stan: Awesome. Yeah.
Mike: There’s a lot of shows. But truthfully, I could never keep this going without having guys like you on or guests like you on, Stan, so I appreciate your time today.
Stan: Absolutely. Thank you so much for having me.
Mike: Awesome. Really quick, everybody. If you can go out on iTunes, Stitcher, Google Play, anywhere you watch podcasts or listen, and give us a rating and review. I appreciate it. That’s the fuel that kind of keeps us going here. So, we appreciate you doing that. It’s really easy for me to say it, and it’s easy for you to think, “Yeah, I’ll get to that,” but please just stop what you’re doing, pull over on the side of the road or I don’t know, be safe. But we’d love to get ratings, so I appreciate everybody. And I’ll see you on another upcoming episode. Take care, everybody. Have a great day.
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