Show Summary

Sometimes when you wish for success, you get what you asked for! Sometimes when you get what you asked for, it was more than you bargained for. Blake Yarborough is a successful real estate investor, has a great lending business in multiple Texas markets, is an owner of a HomeVestors franchise, manages his rapidly growing rental portfolio, and recetnly purchased a Remax franchise. By all measures, Blake is doing great…though many of us come to a point where we value our time more than anything else. Join us in this FlipNerd.com Flip Show, as we discuss the importance of finding balance in your life and work.

Highlights of this show

  • Meet Blake Yarborough, veteran real estate investor and lender.
  • Learn Blake’s strategies for building a rental property portfolio.
  • Join our discussion on ‘when is enough, enough?’, and how to have work life balance.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike Hambright: Welcome to the FlipNerd.com podcast. This is your host, Mike Hambright, and on this show, I will introduce you to V.I.P.s in the real estate investing industry, as well as other interesting entrepreneurs whose stories and experiences can help you take your businesses to the next level. We have three new shows each week, which are available in the iTunes store, or by visiting FlipNerd.com. So without further ado, let’s get started.

Hey, it’s Mike Hambright, and welcome back for another Flip Nerd V.I.P. interview show. Today, I have with me a good friend of mine, Blake Yarborough, out of Houston. He’s a mortgage broker, a hard money lender. He’s a HomeVestors franchisee, owns over 100 rentals, and just bought a Remax franchise. He’s got a lot of irons in the fire. We’re gonna learn how he does it all, how he manages it all, and learn a little bit more about Blake. Before we get started, let’s take a second to recognize our featured sponsors.

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Please note, the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions as real estate investing can be risky.

Mike Hambright: Hey Blake, welcome to the show.

Blake Yarborough: Hey Mike! How are you doing, sir?

Mike Hambright: Good, good. So we’ve been talking a little bit before we started recording here about all the stuff you’ve got going on. As a fellow franchisee, we’ve talked a number of times. I’ve always been impressed with your operation, and I know you’ve got a lot of different things going on. For folks that don’t know you, why don’t you introduce yourself and tell us a little bit about all your operations.

Blake Yarborough: Well, hello. I’m Blake Yarborough. I come from the finance background. I’ve owned Capital Concepts. It’s a mortgage lender, and I’ve had that company for 16 years. From a financial planning background, I still have my license as a certified financial planner. That’s why I have a weird company name for a mortgage company. Over the years, I’ve really taken to real estate investment, and my niche became real estate investor loans. The last eight years, I’ve been financing investor loans, primarily. I started hiring some good people and have gotten to the point where I had about 60 rental units. A guy by the name of Ricky Williams, which I know well, he kept on saying, “Hey Blake, when are you gonna be Blake Trump instead of Blake Chump?” He was trying to get me to join HomeVestors. I had a little more free time because the mortgage company was running well. I’ve got two offices, one in Los Colinas and one here.

Finally, I signed the dotted line and became a HomeVestor franchisee. I’ve had that for about two years now. I’ve increased my portfolio from about 61 rentals to 117 right now. I’ve been building that up. Like you said, I started that with Remax. Basically, me and my wife will get free time, somebody watches the kids, and we’ll start driving around looking at real estate. That’s all we do, from buying real estate, renting real estate, financing real estate to selling real estate. It kind of consumed us. It’d be time to go to bed and we’d watch Flip This House or Love It Or List It.

Mike Hambright: You’re not watching Flip Nerd interviews at night? Come on. Get yourself an Apple T.V., you can watch us on YouTube.

Black Yarborough: There you go. For the last five or six years, since I’ve been building my rental portfolio, it’s pretty much consumed us. We’ve built a heck of a portfolio, it’s greatly increased in net worth and it’s provided wonderful things. The kids are in top schools, we’ve got second homes, we live in a great neighborhood. Now, it’s getting time to where I want to start backing off a little bit. I’ve accomplished enough. Now I’m starting to get to the point where I want to start before it’s too late, because my kids are eight and six. I want to start spending more time with them before I miss their whole childhood, so to speak.

Mike Hambright: We were talking a little bit before we started here, for folks that are watching. Blake and I are probably going through some of the same things. What are we doing this all for? What do you work so hard for? Maybe we’re going through a midlife crisis at the same, Blake. We need to do something crazy. I think there’s a lot of real estate investors that, as you start to become successful, it makes sense to start opening up other business that are bolt-ons.
I know you wanted to get more rentals, so you bought the HomeVestors franchise. You see leads you can’t buy, so why not list them through your Remax business? A lot of entrepreneurs are either laser focused or they decide to have a bunch of different irons in the fire. I think in real estate investing, it’s not such a bad thing to have other irons in the fire. As the markets change, you probably have one business that doesn’t do so well, but the other ones offset it. Talk a little bit about how you justified that, and why you bolted things on over the years?

Blake Yarborough: To me, everything has its place. With my different entities that I have, each one has a purpose. The mortgage company is my income. The HomeVestors is a means of providing the properties for my wealth – as in, my rental portfolio. I’m maximizing the dollars that I’m spending on those leads, and I’ve had my real estate license for 19 years and been a broker for 15 years. I’ve been on interviews where I recognize that the brand would help me out.

So I made a decision to buy that other Remax franchise to maximize some of the other business that was coming in. Then it could also feed my mortgage company. The Remax, I look at as additional income above the mortgage. I’m blessed. I have the income, and I’m able to leave the money alone and let it build for my rental portfolio and stuff like that.

Mike Hambright: It’s like more pieces of the puzzle. You start to see something might be missing. I can accomplish that by hiring someone to help with that, or adding a business or a franchise to use the brand.

Blake Yarborough: That’s what’s been going with me. The main thing with the mortgage company is, I’ve got a key person that came on board a couple years ago. I’ve got a key guy in Dallas as well, Los Colinas. The one here in Houston, Sean, he manages better without me. Hiring the right people and paying them well is something that’s really opened me up and really let me start blossoming in my businesses, and it’s freed me up. I don’t have to do everything.

Mike Hambright: Personally, I can say it’s so tough to let go, and it’s tough to find the right person. When you’re in the types of businesses we’re in, you’re very thrifty, right? We buy cheap, ugly houses, everything we want at a discount. It’s very different when you go to hire someone. You probably don’t want a discount, cut-rate person, just like you don’t want half price lasic surgery. No, give me the full price one because I don’t want to take any risk.

It’s so hard to do as an entrepreneur because you want to be thrifty, you want to be smart with your money. At the same time, on many levels, you get what you pay for with people. How did you get over that hump?

Blake Yarborough: I’ve always been real poor at hiring people, and I’m trying to use some of the personality profile testing and stuff like that. Your inclination is to hire people more like you. I don’t want to hire people like me because I’m not detail oriented. I need the opposite around me because I’m aggressive. I need somebody behind me to get the pieces. For a sales job or something like that, that’s absolutely fine, but for more admin-type or accounting-type people, I don’t want someone that I can sit here and talk with for days because that’s probably not the person I need to hire. I’m improving.

Mike Hambright: You have to, right?

Blake Yarborough: That’s where we are. I’m getting some good people around me, paying for them, and trying to build from there.

Mike Hambright: This is probably pretty different on the lending side, but in my core home buying business and administrative roles, in my mind I try to look for people who don’t have any real estate investing experience. Whenever I have, they come in when this preconceived notions. “Here’s how we did it at this place. Here’s how you do that.” You aren’t able to mold them. The trade-off is that you’re starting from scratch each time. What are your thoughts on industry experience or levels of expertise in your specific businesses?

Blake Yarborough: Certain roles, like a processor, you need somebody that has experience. Something I was debating on doing recently was trying to hire somebody new in real estate, just getting their license. If you went and worked at a regular Remax or a Keller WIlliams and just learned how to be a real estate agent, or if you came to work for somebody like me or you who does every aspect of it. That learning curve would be so much greater for that person, and they become an expert so much faster.

They would know from buying, selling, rehabbing, renting, they would know the game. I think there’s a lot of value to that. Like you said, sometimes people go to work for different places and they believe that’s the best way to do it when, in fact, they’re probably missing a lot of opportunity around it.

Mike Hambright: We were talking a little bit about how you have made some logical steps to add on to your businesses that make sense. They make a lot of sense, it’s hard to say they don’t. Of course, that comes at a burden for you, your life and balance. Talk about how you deal with the balance side. I deal with that all the time. I’m a self-professed workaholic. A lot of times, I tend to think that I can do it better than anyone else. Subconsciously, I’m thinking that. “Let me just take care of it.”
I tell people sometimes if I was at McDonald’s, nobody would be able to fry the fries as good as me but that’s just not the highest and best use of my time. I think that’s a plague of a lot of entrepreneurs.

Blake Yarborough: Let me go back about 15 years. I was dating my wife, and a mortgage guy rolled into the office about 10. She was working a dialysis clinic and getting up at 4 to go. I probably didn’t have the right work ethic. I was a little less than 30 years old. She said, “If you’re gonna be with me, you’re gonna get off and be at work before 8. You need to do this.” She let me know what she felt. Now, she kind of created a monster because now I’m a workaholic. If it’s not this, then we’re going over here.

There’s been times she’s afraid to call me. “Blake, it’s during the day, and I know you’re too busy.” Something hit me recently where I’m missing my life. If I never buy another asset again, I’m okay. I’m ahead of the game. Like I said, my daughter is eight and my son is six. I’ve got a handful of years until their early teens and they want to be with their friends at all times. These are development years. These will be the years they remember.

I’m starting to want to figure out how to structure things to where it’s a little bit less of me. For you, not so much, but for me, the S word. Systems. I’m not a big systems guy, but you know what? I’m learning that I need to put some things in place so it’s not always me. If it is a system, I can plug people, in, say here’s these few tests and go over and over again and you’ll be successful or you’ll be able to do what I ask you to do to.

If I can get this done like I’m starting to, cut some of the accessibility out and plug in some people and put them on tasks that take less of me where my kids get more of me. That’s what life’s supposed to be all about. I feel that when I get home at 5:30 or 6 and it’s about 7:30, not even 8, I feel like I’ve been with the kids all day. It’s an excessively long time, not in a bad way. It just feels special, I’ve been home a long time. Then you look at that differently. Man, that’s kind of crappy. Why don’t I do this everyday?

Those are the moments. You want to work, work, work, and make sure you provide for your family. A buddy of mine asked me a few months ago, “Blake, what drives you?” My first reaction was fear. Back in ’09, when the DOW dropped about 6,500, my mortgage company lost money, peers were going out of business left and right, I had a three year old and one year old. My daughter had given up her nursing career. I flat out didn’t have enough money in the bank. Then you start having the fear of a failure, as a man.

What am I gonna do? My family’s become accustomed to a certain lifestyle. That’s what’s driven me, building this rental portfolio over the last five years. Now it’s time to start slowing down. I’m okay. I’ve got enough stuff. Now, let me start concentrating on my family and spend time with them.

Mike Hambright: Like I said, I think we’re going through a lot of the same things. I’ve been blessed and fortunate that we live well below our means, so we have savings, we have a rental portfolio, we have businesses that some things run without us. Some don’t. I think you get to a point where you just start to question what it’s all for, why you’re working this hard, and if you’re living for the day.

Blake Yarborough: What’s that old saying? Has a man on his death bed ever wished he worked more hours? That’s kind of where I’m coming from.

Mike Hambright: I think in real estate, for a lot of folks, this tends to be a feast or famine business. Everybody’s always worried. Everybody always feasts while they can because they’re worried about the famine. If you’re structured right, maybe it never comes or doesn’t have as big of an impact on you. You’re right. It’s hard to say no to opportunity for people who are blessed with opportunity.

Blake Yarborough: I kept a lot of properties last year. As we talked earlier off camera about me paying off this brand new house I just bought. If I pay this off, I can’t find a reason not to because I’ll still have plenty of investments. My wife wouldn’t be stressed, I wouldn’t be stressed, I wouldn’t have to bring in as much every month. Like I said, my goal next month is to take at least a month off away from my businesses and stuff like that. I was thinking about a couple weeks, but that’s not extraordinary.

What’s that old saying? I know it’s impossible, but if we could, what it would like? If I can get that paid off or sell some of the things, then the quality of life would just turn. I’ll never retire. Yes, I have more than enough real estate for most people to retire, but I like to buy things, I like to do things, and I don’t want to be encumbered by not having enough. Me having no mortgage payment, my overall expenses would be just a few thousand a month, and I’ve got well more than that coming in for rentals and real estate.
I don’t know. How do I do that? Quality people. Pay them, and hopefully I’ll get all that in place. Right now, I like the way it’s starting move forward and what’s starting to develop.

Mike Hambright: I’d say for myself, personally, some of the things that you talked about in terms of trying to hire the right people and have good people, it’s just as important. There’s a guy that you know, Ernie Hughes. I don’t know if this is his line or if he stole it from someone else, but related to hiring, he’s always had this line. Hire slow, fire fast. I’ve caught myself several times. One of the challenges in a small business is, you don’t have redundancy. You don’t have a back up.

Sometimes, you subconsciously start to make a decision that the pain of getting rid of the wrong person is more than the pain of hiring the right person and going through that person. I’m sorry, that it’s less. So you start to justify it. “Maybe they just need a little coaching. Maybe they just had a bad week.” It’s tough because there’s no room for error with weak links and people who aren’t committed.

Blake Yarborough: Like I said, I’m trying to use this personality profile thing lately, and it’s kept me from hiring a few people. It’s the four strengths profile, which you’re well aware of. As I’m finally learning more and more about it and how to read them, maybe I should have kept one or two of those people I passed on a month ago, but it’s all a process. I have just realized that I’m not good at hiring people, so I’ll have Sean or someone else try to interview them as well to have another set of eyes on them.

You touched on the Ernie thing. When they’re already in the office with you, when you’ve already invested all this time with them, and deep down you know they’re not the right person. Then you don’t want to let them go, and it’s really a struggle. Then it’s another burden on you, and it’s something else that makes you lose sleep at night.

Mike Hambright: Sometimes, it’s to realize that if they’re not the right fit for you, you’re probably not the right fit for them either. I don’t mean to say this in a way to make it easier for you, but you’re kind of doing them a disservice by not allowing them to go out and find something that’s a better fit. In the short term, they may not see it that way and you might not see it that way. If you’ve ever been in a relationship where you broke up and it wasn’t your decision to break up, you say life is over and you can’t live without that person.

Years down the road you realize that’s the best thing that ever happened to you because you would have never met your wife or whatever. Not that anybody in the world has ever broken up with me, but that’s what I hear. I think, as an entrepreneur, you have to look past the short term pain with hiring decisions to get to the people who can make your life easier and be good for them, good for your business, and everything.

Blake Yarborough: Spending weekends away from work and with the kids, now they’re all in sports. I’m bad about coming home on time, but I’m trying to be real good about that. I’ve never played soccer in my life, but I’m my son’s head soccer coach. He’s six years old, so I can get away with it. I tried to help out and assist at tee ball last year and this year. Basketball rolls around, I’m 5’9″, 240. I don’t really look like a basketball player. I look more like a basketball. I’m working on that though. I saw some emails go by where no other fathers stepped up, so I said, “Honey, I’m gonna do it”. “Blake, do you have time?”

So I ended up being head basketball coach again. I’m trying to participate there. Spending the time in the evenings or whenever. On a Sunday, about a week or two ago, I hated to do it but I needed to go somewhere related to an inspection on a house. My son said, “Mom, why does daddy always work? He never has time to spend with us.” Ouch. It makes you want to tear up a little bit.

My wife, I don’t know if she was speaking from the heart or just trying to save me, she said, “Blake, to be honest with you, if he had you 23 hours a day, he’d still be crying if he didn’t have you 24”. But it hits you. I’ve got six basic steps I’ve gotta do to knock that house out to relieve that off my shoulders to run out of excuses on why I have to make X amount of dollars amount. Right now, that’s my struggle. That’s what I’m going after. The kids need us, and I’ve got some other things. Of course, when I pay it off, I want to take on more debt, which drives my wife nuts.

I want to buy some land where we can go out there and get away from the city and have good, clean fun with the kids while they’re still young enough. That’s my big “why” right now, why I’m trying to change things up a little bit to be with the kids. My wife says, “Blake, we don’t want you to die”. I say that’s a good thing. She don’t will you to die. I remember Sean and Jeff at the mortgage company, one day about a year ago. They were talking.

“Well, if Blake dies, all the warehouse lines and everything are in his name. What are we gonna do?” I thought that at the same time. My wife’s worried about my health as well. Everybody’s trying to kick me off. Maybe I was being oblivious to it. I wasn’t taking care of myself. I don’t know if I was 270 then, but I was too heavy. I was obviously too high of a stressful situation in my life where I looked like a candidate for a heart attack. Everybody else around me knew it except me. I wasn’t paying enough attention to it. Hopefully that won’t be me. That’s another reason to change.

Mike Hambright: Awesome, man. The good thing is, you recognized you need to make some of those changes. You just gotta stick to it.

Blake Yarborough: Yep. Anyway, that’s where we are. That’s what I’m starting to do, and that’s how I’m doing it.

Mike Hambright: Awesome, Blake. I appreciate you sharing a personal side of you there. I think it’s a great learning experience for other people. Some people work so hard to get to a point where they’re even a fraction of where you are, and it’s so easy to get caught up in that’s how life has to be from here on out. The question is, do you look back and regret that at some point? Most people probably do.

Blake Yarborough: That’s my little mantra during the last handful of years. This is my heistas . This is my chance to really make some money. But how much is enough? One thing I’m proud of is that I don’t have any partners on anything that I do. I am a going to say it’s because of me. I’m gonna be steering the boat. Now I’m finally getting to the place where – I don’t want to come across as bragging – but I do have enough. Now, I think it’s time to simplify.

Mike Hambright: I think one of the key learning’s there is that it was done through real estate. There’s no doubt that those rental properties and assets are gonna continue to pay dividends for a long period of time. I don’t have as many rental properties as you, but we have a pretty nice portfolio. I always wish I had more, but the one thing I’m happy about is that it is where it is. We could probably live off our rental property for the rest of my life and I wouldn’t have to work again. Like you, that’s not enough for me.

I’m not looking to survive, I want to thrive. There was a time in my life, even six years ago before I got into real estate investing when I had no rental properties. Just that portfolio alone makes a world of difference when it comes down to having some security.

Blake Yarborough: Absolutely. I always look at every house I buy. One, it’s a car payment. Depends on the car. The other thing is, it’s a safe as a bank. If I get in a pinch, I could sell it. When I first started buying houses, right when everything dipped, I thought I was gonna have to close the mortgage company down. I said, “Well, I still have some money in credit”. No matter what, if I bought a bunch of houses – and I think I bought 10 properties within a six month period – I knew I could sell them and make some money off of them.

Each one I kept a certain amount of equity in. That’s how I still look at my rental portfolio. One thing about real estate, especially single family real estate, that a lot of people don’t think about compared to multi-family, is there’s a certain amount of liquidity there. You can sell one off at a time. If it’s a 100-unit apartment complex, and you’re short on money, you can’t quite get it. Banks don’t lend money when you need it, right? With a single family house, you can owner finance it, you can sell it, there’s a bunch of different things you can do. That’s one of the ways I look at things.

Mike Hambright: Awesome. Blake, thanks for sharing your story and letting us learn a little more about you today. I enjoyed it.

Blake Yarborough: I’ll see you here in a couple months.

Mike Hambright: Alright, Blake. Thanks for joining us today.

Blake Yarborough: Yes, sir.

Mike Hambright: Bye bye.

Thanks for joining us on today’s FlipNerd.com podcast. To listen to more of our shows and hear from incredible guests, please access all of our podcasts on the iTunes store. You can also watch the video versions of our shows by visiting us at FlipNerd.com.