Using Boots on the Ground to Expand in New Markets (025)
Transcript:
Steven: Steve and Jill here.
jill: Happy Friday.
Steven: Welcome to the House Academy Show, entertaining real estate investment talk, I’m Steven Jack Butala.
jill: I’m Jill Dewitt broadcasting from sunny southern California.
Steven: Today Jill and I talk about using the boots on the ground to expand in the new markets. So if you haven’t been with us this week, all week we’ve had our friends and professional colleagues here from Phoenix, our Phoenix boots on the ground, explaining how this whole process works. It wasn’t by accident because the number one question we get in House Academy, no maybe not the number one, it’s in the top five for sure is, what the heck is it with this boots on the ground thing that you guys keep talking about? Please explain it. So we decided to do a whole week on it. So, if you haven’t seen the earlier episodes this week, check them out.
jill: Mm-hmm (affirmative). It’s good. This is Ken and Kristie [Mah 00:00:49], I wanted to just introduce them in case you just found us today and you’re trying to figure this all out. I love two … one of the things to piggy back on that, with Land Academy this is a program that we are and will expand. It’s so many of our members, provably even more so now with House Academy because you really know what’s going on, that if you think this is a good fit and you’re in a city that we could all work together, we want to do this, too. I know we’re going to talk about that here.
Steven: Yeah, that’s really what this show is about. Before we get into though, let’s take a question posted by one of our members on the HouseAcademy.com forum, it’s free.
jill: Mark asks, what is your biggest challenge flipping houses?
Steven: Perfect, I mean-
jill: Yeah, what is your biggest challenge?
Steven: Coming up, I’ll tell you what-
kristine: We should all do one.
Steven: Okay.
jill: That’s good. All right, you want to start?
kristine: Okay.
jill: Think of a biggest challenge.
Steven: My biggest challenge flipping houses is finding quality boots on the ground. That’s the truth.
jill: Oh.
Steven: Here’s the exact opposite, I know exactly how much mail to send out to generate exactly how many deals. I’ve got that down to a science. I know where it’s going to work, where it might not work, where the pricing needs to be and all every last detail. It’s a very big… We have all the money we could ever use. The issue is getting quality people to understand how to complete these transactions at the boots on the ground level.
jill: Cool. My biggest challenge is I’m impatient, once we own it to when we sell. It. I want to make that little window even smaller. I want it to be hours, man.
kristine: Now my biggest challenge is when you acquire a property and you know the return on investment for the buyer side. And so it’s like, “Okay. If we just … For us, as investors, if we just invest maybe 20 or 30 grand, I could feel this even more.”
jill: Right. You want to keep it.
kristine: But then, when I have Jill, it’s like, “No. We’ve got a short window. We’ve got to get rid of it.” And it seems like, “No. Here’s the numbers.” So, I think it’s my biggest challenge is just like knowing that, you know, potentially leaving one on the table. But at the same time, you’re looking at volume wise. So, it’s the right decision to do. So … yeah.
jill: Exactly.
ken: I think mine is the unknowns of what we’re acquiring from the seller. You know? Things that we’ve all experienced.
Steven: Like cracked foundation.
ken: Yeah. Stops. Yeah, solar. Just any hiccup, stuff that we may not catch until we’re into the transaction of it.
Steven: That’s a good. I like this.
jill: Mm-hmm (affirmative).
Steven: I didn’t know that. With you guys, I didn’t know that at all. I never knew that. So, yours is a … Is it all physical plan stuff? Are you worried about chain of title or any paper driven?
ken: Not so much that. I feel like, once again … I mean, there’s a little bit of unknown there for sure, right? But I think it’s just more of, you know, when you think you’ve seen it all, you get that curve ball. And it’s like we started, we had the solar one, then the HOA stuff. You know, there’s always kind of something. It’s just that nuance. So, that’s the kind of stuff.
Steven: You know, that’s exactly why I don’t want to renovate houses, [inaudible 00:04:00] your thing, because of that unknown things that you find. And it’s not because you opened a wall up and found something there. It’s … The houses that we’ve renovated, and we don’t do it anymore ever, is because …
Steven: It all starts like, “Well, if we move that wall and we put a chandelier over there, then maybe we could ask for this.” And it’s all this nebulous unknown non draft map driven what the hell. So, we could retail some houses.
jill: We should do that once a month because I personally enjoy that. Could you imagine? You two toss Kristine and I one and let us have a little fun over here.
kristine: Yeah.
ken: And then, how many wholesale deals would we miss in that time period?
jill: No no no. Everything else still goes on as norma.
kristine: We got this.
jill: We got this.
ken: Oh. So you guys want another job.
jill: Yes!
kristine: A pet project. We could have another project, a little pet project.
ken: So you want another job? Then okay.
jill: Yeah. We got this.
kristine: And then, in the return, we’ll just go directly to the CNI.
jill: That’s right. Hey! That can be a whole nother show.
kristine: Whoa!
Steven: This is exactly how renovations go. Oh yeah, and we should buy a bank too.
kristine: Okay. We’re just kind of talking, right?
jill: Right. Right.
kristine: Here we go.
Steven: Today’s topic, using the boots on the ground to expand into new markets. This is why you’re listening.
jill: Or new products.
kristine: Right.
jill: Or new shows. Or new projects.
ken: The greatest thing, and it was a total unintended consequence when we started this, is … We will ask and haven’t asked them yet to find and train other boots on the ground. And so, I never anticipated that. Did you?
kristine: Oh yeah.
ken: Because I don’t even feel qualified sitting next to them for me to go train new boots on the ground. They just have a knack for it, like in the line of fire.
kristine: Oh, I was never questioning it.
ken: I never questioned it either. But I just assumed we would have to train in like let’s say we go into Minnesota or wherever the next market is.
kristine: Well, who better?
ken: Yeah.
kristine: They’ve been through it all. That’s the thing. You guys can really sit down and you will be a valuable resource for future boots on the ground when they go, “What the heck do I do now?” And you’re going to go, “What tools are you carrying?”
ken: So, new markets for us, the theory is we have this running functioning operating business in Phoenix with these guys. It’s very simple for us to get another one in Las Vegas. Our investors that might be behind us … us, as investors and data people have access to all the data in the whole country. So, it’s just squeezing one out. Like I said earlier, the only thing that’s stopping us is quality people that are representing us in that local market.
kristine: Right.
ken: So, that’s how … My job is to look at it that way at the 35,000 foot level and say, “We could make this times ten pretty quickly, pretty easily, without a lot of more additional work on our part, leveraging our time and our talent.” It gets even better if you guys can train ’em.
jill: I’m excited.
kristine: Absolutely.
jill: I think this is the value of House Academy. We watch this happen with Land Academy. We watch. We’re now doing deals together. And we could all do more. And I know as House Academy gets built up and growing, we have more members, they’re going to come to us with DLs. It’s going to be big in other cities, and I’m excited.
Steven: I knew this would be a short episode. No. Actually, do you guys have any good advice for … there’s a lot of people that … House Academy is a month old. Probably 50 percent of the new members that we have taken on are also Land Academy members. And I know you guys are familiar with Baltic. Do you have any advice for new Land Academy members?
jill: For House Academy members.
Steven: I mean, sorry, House Academy members.
jill: Go ahead. You go first.
kristine: I love talking.
jill: That’s good.
kristine: It’s my strength.
ken: I depend on you to talk.
kristine: Oh, very good.
ken: That’s the secret.
jill: There we go. One thing is get a talker, have a good … well, I’ll say partners, partners.
ken: I mean, learning data. What’s the role of that versus … I don’t know. What we teach in the program is you really should be your own boots on the ground for the first few deals in a market that you really know so that you can understand, like you guys understand. And we did that. I mean, we’ve bought and sold houses in the Phoenix market, several of them. All of them we renovated by the way. So, that’s my advice is do your own deals for a while so you can teach it.
ken: Definitely, I mean … you know, we had a great day yesterday examining a ton of data. And it’s such a confidence booster even just sending your mailers out and so forth. You feel confident in what you’re … you know, you’re excited about what’s going to come in because you feel like you just can’t … you can’t lose, I think. But as far as …
ken: You know, Kristine and I, we’ve bought and sold houses throughout our lives. And we have different experiences. It helps to just keep an open head. And you never know what you’re going to run into in these deals. But just be prepared, you know? Be prepared.
Steven: Is there any question your mind that this works or that it’s-
ken: Oh not at all.
kristine: Not at all.
ken: Yeah, not at all.
Steven: Me too. Because that was a big challenge for us when we started Land Academy. The challenge was, “Who the hell are you guys?” Sending these … it was very foreign. We spent a year trying to … this works, it works, it works. So, that no longer is an issue in any way. It’s not. And so, at House Academy, there’s no question whether or not this works, I don’t think, with anybody. I don’t get that question, “Does this work?”
Steven: The questions we get are, “How do we raise enough capital to do it?”
jill: Right. That’s it, exactly.
Steven: The pricing issue has been removed entirely. That’s stopped.
kristine: Yeah. I think for … Kind of stepping back, looking in from the outside, the transition between Land trans … or excuse me, yeah, the transition between a land transaction and a home transaction is that, I’m sure everyone can attest, 99 percent of the time, you don’t have a human aspect as far as somebody living there. It totally changes it up for you. And again, your approach … tailoring your approach, it’s there’s not a one size fits all. So, just create yourself a cheat sheet of [inaudible 00:10:40] that you’ve experienced. And then, here’s all the gotchas that you’ve experienced, and continue to build your confidence, leverage resources locally, to help you understand.
kristine: At a very minimum, if you were to walk into a property or if your boots on the ground was to go to see a property, what are the key things they should look out for? So, you don’t have to have all this experience in home building and home construction. You could just … What are the key things that you need to look out for that anybody off the streets can go right in and quickly assess, “Is this a good transaction or not for you?”
jill: Like if I step over a gap like this to the front door from on the foundation, that would trigger something.
kristine: Yes. If that home, by the way, is only three years old and it’s got gap that big-
jill: Yep. There, it triggers a no.
kristine: Versus something that’s 30 years old, that’s totally different.
jill: Yes.
kristine: Yeah, so creating a checklist for yourself.
Steven: One of the things that we’ve never had issues with with you guys is having you try to convince us to do a deal that’s bad, because … And that’s … I talk about it in the program, but I have never talked about it with us. You guys aren’t putting a dollar in. So, every single deal that we would send to you, that we do send to you, that comes in from a mailer, you have a lot of motivation to just get it done like a real estate agent does, like, “Yeah. It’s a terrible deal. But I’m going to get my six percent.” You know? “Yeah. It’s a terrible deal. But I’m going to get 20 or 30 percent of it.”
Steven: So, that’s good. It’s hard to find people that aren’t going to behave that way. We have a deal funding, Jill and I have a deal funding effort out of both companies. So, we get deals every day to get funded. And once in a while, people throw in deals that are on the MLS just because they want to get a cut of it. They don’t have to pay any money. They have nothing to lose. And it destroys … like they get put on to this blacklist. Really. We have a blacklist. It’s like if you’re so short sided and so … you know, we just don’t have any of those issues with you guys. So, it’s hard … I would assume it’s hard.
Steven: We knew you guys before this fall, so we trusted each other before then.
jill: Yeah.
Steven: So, it’s good. Join us next time for another interesting episode. And … oh!.
jill: And we answer your questions as posted on our online community, found it, Healthacademy.com, it is free.
Steven: You are not alone in your real estate ambition.
jill: Okay. Double announcement. Check out parcel fact. So, just a nice little thing. If you haven’t seen it before, go check it out. Fact, F-A-C-T dot come. You can get in there. You can zero in on a property, see every last detail about that property, click on all the neighboring properties, and just update it with version 2.0. My team want to make sure that everybody knows about this. So, make sure you check it out. It is awesome. And wherever you’re watching … wherever you’re listening, please subscribe and rate us there. We are Steve and Jill
Steven: We are Steve and Jill. Information.
jill: And inspiration.
Steven: To buy undervalued property. Thanks guys.
jill: Thank you. Good week. Awesome.
Steven: Let’s have some fun now.
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