200+ Deals in the First Four Years with Ryan Pineda

This is the BiggerPockets podcast show 292.

To like build you that relationship because if you just one of these guys who sends us an offer, they don’t know who you are, it’s just a piece of paper, but if you’re actually speaking with them, you could feel them out and be like, ‘all right, you know, where do I need to be to get this deal done?’ Like what’s the seller’s motivation? You know, what can we do other than price that will make them want to do the deal? Do they want to rent back? We’ll buy it as is. When do they want to close? Like, you can talk about these things when you can contact them directly like that.

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Brandon: What’s going on everyone? This is Brandon Turner, today’s host of the BiggerPockets podcast here with my co-host Mr. David Greene. What’s up, buddy?

David: What is going on with you, dude?

Brandon: I asked you first.

David: Yeah, you did and you called me petty so I should answer that. Actually, I just got off the phone with my contractor. I have a deal that I closed on a couple of weeks ago and we put the finishing touches on the rehab that we’re going to be doing and we got everything all squared away, so wiring over the money today and we should be starting that soon and I should have an update for you every week on how that’s going.

Brandon: Fancy smancy! Well, cool. Anyway, well let’s move on because I don’t want to talk about myself at all. Today’s show, well, let me talk about the today show real quick. Today’s show, I said this at the end of the show after we’re done recording, look at the variant. I said like this was one of the most fun episodes I’ve had recording the show in a long, long time. Today’s guest is just incredibly a high level, I mean, just crushing it, I mean over 100 deals he’ll do this year alone, but he’s got such a good way of explaining it and like looking at his business in a very cool way. So you guys are going to love that a lot, so stay tuned for that for an interview with Ryan, but before we get to that, get a little bit of housekeeping to get through. First of all, it’s today’s quick tip.

David: Alright, today’s quick tip is the right way to approach a mentor. Let’s start with the wrong way. Do not come up to someone you don’t know and say, will you be my mentor? It reminds me of a book that I read as a kid called, will you be my mother?

Brandon: I read it all the time.

David: Rosie likes that one?

Brandon: He loves that one.

David: Yeah. Nobody wants to hear it. Will you be my mentor? Will you be my mentor because we don’t know you yet and you might not be a good fit for our personality or you might just not be a good person, it’s hard to tell. So, what we’ve decided is when people approach us and ask for help, guidance, mentorship, whatever, the first question we’re going to ask is, have you read my book? Now, this is not because we’re egotistical people who want to make everybody go buy our books. Maybe you, Brandon is, but I really don’t care about that a whole lot, but I’m also not the prolific author that Brandon is. So, I can’t.

What I would say is when I approach somebody who’s a couple levels ahead of me and I want to move ahead, I will say to them, I’d love to talk with you about something specific, fill in the blank, I read your book and I loved these three things that we’re in it, right. Now, that person I’m talking to knows I’m not wasting their time, I’ve already invested some of my time and energy so I have some skin into the game of this relationship and there’s a very specific thing we want to talk about.

When someone says, can I pick your brain? That is an open ended question that may never end. It may turn into three hours of you wanting to just ask us questions and learn everything you can because you’re too lazy to go read a blog post or do some research yourself. So, building relationships is a huge part of today’s show and you’re going to see just how profitable relationships can be. Brandon and I want to help people who want to start doing that. One of the best ways is if you’re approaching someone and you’re interested in them, read their book first and open the dialogue with, I read your book and I loved specific bullet points that are in it. Then make your pitch on how you’d like to get to know that person or what you’re proposing.

Brandon: Wow. That was a very long, quick tip. I liked it, yeah, very, very important. Building mentorships is so valuable. I was reading a book the other day, I don’t remember what it was called, but in there they talked about one of the things that separate successful people from non. So, the topic I’m fascinated by is that they have mentorship, like there was a scientific study done that you have somebody that you can look up to and talk to, and so it is valuable and we’re not talking about paid $50,000 mentors, I’m talking about people you can trust and talk to and anyway, there you go. All right, and we do talk about relationships a lot on today’s show. In fact, I would say that’s a secret to Ryan’s success. And, before we get to your interview with Ryan, let’s hear a quick word from today’s show sponsor.

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Brandon: All right guys, before we get on with the show one last piece of housekeeping here as I want to invite you to a live webinar. That might be the most important webinar you’ll ever attend. It’s called ‘How to retire early through real estate investing.’ This is going to be a massive, huge event put on by pockets hosted by me. And so it’s coming up this coming week. Sign up at biggerpockets.com/webinar, if you want to learn the best strategies for retiring early, getting that early financial independence. I mean live the life that you’ve always wanted to. Again, biggerpockets.com/Webinar and that’s pretty much all we got today so, yeah.

Why don’t we get to today’s interview? So today’s guest is Ryan Pineda. It’s fantastic. Like I said, one of my favourite episodes that we’ve done in a long time, one of my favourite podcast episodes ever, super inspiring guy, a young guy doing over a hundred flips this year. You guys are going to love it. So, we talk a lot about deal finding, a lot about building relationships, working with the MLS wholesalers, all that. So, without further ado, let’s get-

David: If they like Ryan’s episode, which they will because Ryan is awesome, he actually wrote a book called ‘Flip your future’ and I would highly recommend looking into that because when you guys hear this guy talk, you’re going to see exactly what Brandon and I like this guy so much. He’s got it together and he’s got a system that anybody could follow.

Brandon:  Yeah, we’ll put a link to his book. He’s got a new book out. We’ll put a link in the show notes or just go to Amazon and type in, ‘Flip your future’ and pick it up. So with that, let’s get to the show with Ryan. Alright Ryan, welcome to the BiggerPockets podcast. Good to have you here.

Ryan: Hey, I’m happy to be here.

Brandon: So, you and I have been Facebook friends for quite some time. I don’t know if I requested you or you requested  me, but we have been Facebook buddies for awhile, but I don’t actually know much about you other than I constantly see like buying a new deal. “Look at this thing. Look at this awesome thing. Hey, I wrote a book like all these cool things” that I’m like, ‘we got to get this guy on the show and figure out what’s going on.’ So, that’s what we’re doing today. So, why don’t we start at the beginning?

Where’d you come from? What’d you do before real estate? How’d you get into this game?

Ryan: Alright man, from the beginning. So my mom was a realtor ever since I was alive, man. So I kind of grew up in the game and you know, she wasn’t much of an investor, just mainly on the realtor side. So I mean just to cut everything to the chase, like I was a baseball player growing up, I had no ambitions to be a realtor, to be an investor. Like, I was just going to play in the big leagues and that was it. And so I, you know, I got drafted, I got drafted by the Oakland A’s and everything was going according to plan and I realized real quick that minor league baseball players don’t get paid anything. Like, I was making 1200 bucks a month and I was like, well, I need to figure out another job.

So, I got licensed and I was 21 years old at the time and that was my first job back in 2010, just being a realtor in the off season and then playing baseball during the season. And so it was a tough time back in 2010, especially in Vegas because, you know, we had just hit the recession and prices were like so cheap. So, even if you sold a house, it was like, you know, what are you going to make? So, you know, I just was a realtor and you know, I kind of struggled for awhile because it just, I wasn’t good at it. I didn’t really know what I was doing.

I didn’t have a mentor or anything. So long story short, me and my cousin ended up buying our first house in 2011. I’m a year later and it was just a little bachelor pad, man. Like, I just remember we had so many good times at it and we’re just, you know, being 21 and 22 year old kids and a couple of years later we sold it and it was like, whoa, we just made a lot of money.
I don’t even think we bought it right. You know, we just, we got appreciation, we bought it really low and then I was like, man, I need to do that again. Like, I just made way more than I did as a realtor selling this house. So, I bought another one and, you know, I rented it out. I ended up going to play baseball, so, you know, I was just chilling, letting you know, getting some income and then a few months later the tenant was like, “Hey, I want to buy this.” I was like, all right, make me an offer. And sure enough they made me an offer. I sold it, you know, made like 25 grand off of it. I was like, man, I made way more than a baseball player then as a realtor, I’m like, I got to figure out how to do this so you know, it’s 2014 and I’m married.

Me and my wife we’re celebrating our one year anniversary and we’d bought our new house for her and I to live in. And I’m like, man, I really want to sell this house. But I mean, I know you’re married Brandon. Are you married David?

David: No, sir.

Ryan: Okay so, married to the game, the game, man. So, you know, after we bought our house I wanted to, I was thinking about selling it because, you know, I’m seeing the money and I’m like man, we could cash out, get some money, and she’s like, no, and so I’m like, okay, well, you know, my house flipping career’s over because I didn’t know any other way to buy a house other than a 30 year loan. And so, we struggled, man, she was in college and I was only making 1200 bucks a month as a baseball player.
I wasn’t a very good realtor and, you know, I couldn’t flip the house. And so, I started flipping couches, man. I started flipping appliances. Actual like-

Brandon: Wow, how does that work?

Ryan: [Inaudible] [10:44] So, I bought a bunch of storage units or I rented them. It’s a little 10 by 30 units. And we ended up just buying and selling couches on craigslist for like a couple of years. I bought a truck on craigslist to do it and do it. I mean, it wasn’t bad money, you know, it was just a hustle though. Now-

Brandon: David thinks this is really funny.

And would you like to buy them wholesale and then sell them like retail? Or are you’re talking about you buy from one guy who was, I got pee stained couch and you go and sell it?

Ryan: That’s simple, I would be on craigslist every day,  I would find a couch like 100 bucks I take into my storage unit, take all the covers off, go wash them, take another picture of it the next day, sell it for 300 bucks, like it was like clockwork.

David: That’s awesome. That’s what’s so funny is I’m picturing you like I’m looking for distressed couches. If you know anyone with the distress couch to sell, we buy distressed house couches, trade-marking couch, flip, hash-tag couch flipper and you’re like, it doesn’t matter the condition that homeless people are fine. Bring us any pee stained, fully invested couch; the worse, the better.

David: And I’ve got a special rehab team that can upholster anything that is just hilarious to me that you were a couch flipper, but not only that, like that just speaks to the drive that you have, you know? If I knew nothing about you and I heard that you were doing that, I’d be like, that’s somebody who’s going to succeed because he’s doing something new that no one’s done before. You actually said you made money at it. So you found them a way to make it work. You learned these fundamentals that then you went and actually applied to houses where you’re making great money now. And it kind of reminds me of your career in baseball where you started off in the minor leagues. You, you learn the fundamentals and you never made it to the big leagues, but you did that exact same thing with house flipping instead.

Ryan: Yeah, 100%. And so like, you know, the couch flipping thing, you know, it provided a living and it was cool. But you know who wants to flip couches rest of their life? Like, there’s no purpose or fulfilment in it other than just making a buck. And so, I had this revelation on our one year anniversary and I’m watching TV, we’re, we’re over in New Orleans watching the packers play or my team and-

David: Come on, come on.

Brandon: Who’s your team?

Ryan: [Inaudible] [12:50] So, I ended up watching this video commercial for this guru. I’m not going to say who, and I was like, man, I know this is a scam. You know, I’m just, I’m always skeptical of everything and I was like, you know what, I’m going to just research it. So, I just get on Google, I type in ‘seminar scam’ and the first thing that pops up is BiggerPockets. And I’m like what? What is BiggerPockets? And so, I started typing is BiggerPockets a scam? I was like I don’t know what this is. And so, I start getting into it and reading the post and they’re like, yeah, yeah, yeah, like that’s a scam. They’re going to up-sell you, blah, blah, blah. I’m like, okay, good thing I didn’t buy it.

And they’re like, but all you need to do is just listen to the podcast. You just need to go read this book. And they mentioned your book, Brandon, [Inaudible] [13:39] And so, I picked up that book, I picked up Jay Scott’s book and I read it, you know, in a day I read both of them and I was like, whoa, this is crazy. Like, this is the answer I’ve been looking for because I knew how to find deals, I just did not have [Inaudible] [13:54] that was my main thing.

And so I was like, man, there are these hard money lenders, private money lenders, this is crazy! And so, that was the end of 2014. I was like, all right, I’m going all in, in 2015. And so, I only had 10 grand in the bank and luckily we didn’t have any debt yet, other than, than her student loans. But I was like, all right, well 10 grand’s not going to do it, I don’t have a private money guy, like, I got to go hard money. And so I was like, all right, I’m just going to max out all my credit cards. So, I maxed out all my credit cards-

Brandon: -which was not a chapter in the ‘Know and low money down’ book.

Ryan: That was not a chapter, but you know it, you know what actually gave me the idea was the seminar because people were like, yeah, they’ll teach you how to raise your credit card limit just to buy their seminar. I was like, that’s messed up. But what if I did that to, you know, go buy a house. Then it makes sense. And so, I ended up doing that, I ended up cash advance and 50 g’s. And I was like, okay, well now I just got to find a deal.

So, I ended up finding the deal in January. I bought it, it took about 40 grand of that 60 that I had remaining. And I was like, all right, well I guess I’m all in now. And a couple of weeks later I found another deal. I was like, well, I got this 20 here and I only need like 15 to buy it. This is like a real easy, like, as, as flip. And I was like, well, I’m all in. I might as well just really push all in. So I bought that one too. And uh, yeah man, it was kind of nerve wracking, you know, I didn’t plan to buy two. I was like I’ll buy one, take it slow, whatever. But it just, I knew it was a good deal. And so, a few months later, I ended up selling them both made about 40 grand.

I was like, wow dude, I just had 10 grand in the bank and now I got 50. This is like unbelievable. I was like I’d have to flip so many couches to freaking that much money. So, I was like, okay, this house flipping thing is the way to go instead of making 200 bucks on a couch, why not make 20,000 bucks on a house? And so yeah man, that was the beginning of my career and you know, my true house flipping career and that year in 2015 I ended up buying five and you know, that was all I could buy with the money that I had. And then in 2016 I bought 20, same thing, just all hard money. I kept just being frugal and saving my money. I was still maxing out my credit cards always to just buy more deals.

2017, I finally got my first private lender. I was like, Brandon, I did it, dude. I got a private lender. That was what really allowed me to start scaling. And so, last year in 2017 I ended up buying 53 homes and, you know, it was great. And then this year now we’ve already bought 60 plus homes, we’ll probably do over 120. So man, things have been growing quick, quick.

Brandon: Wow. That’s incredible. You went from 5 to 20 to 53 and now you’ll hit over 100 this year. Are they all in the Vegas area?

Ryan: So, the majority are in Vegas. I buy in Big Bear, California too. I’ve got some air bnbs up there and you know, I do some flips up there and then I’ve got some duplexes in other states. So these little cheap ones that people talk about and I can go more into detail about those, those are funny, but you know, for the flipping, yeah, everything’s pretty much in Vegas.

Brandon: Alright, so I want to unpack this a little bit. So, first why don’t we go back and talk about the hard money thing. So for those people who don’t know what hard money lenders are, can you explain what that is and kind of what you were paying for rates back and rates and fees back then?

Ryan: Yeah. So hard money lender, it’s very different than a traditional 30 year lender. These people, I mean, they can get you the money just like cash, you know, within a week or two and they’re not really concerned about your income or your credit. They’re more concerned about the property and if it’s a good deal or not. And so, like this lender in particular, my very first one he wanted 20% down and you know, he wanted me to cover the rehab cost and so that’s why I needed 40 grand to buy that first deal and he charged me two points and 10%. And so, you know, a point would just be 1% of the total loan. So I can’t remember what the total loan was. It was like 130, 140 or something and then you know, obviously the monthly interest you’ve got to pay. So, it is definitely expensive but it’s worth it if you’ve factored into the flip.

Brandon: Yeah. And that’s the key right there, right? People are like, well, I would never pay hard money rates but you just factored into your numbers, plug it into your numbers when you’re doing the math and if it works then who cares? I mean, overtime you can get better and better rates and fees because you get private lenders or you know, maybe lines of credit or to wherever. But heck, I mean if you got to, you got to do what you got to do. So, some people are still complaining about not wanting to pay a hard money lender and they haven’t done a single deal.

Ryan: Yeah. And I’ll tell you like the second deal I bought. I didn’t, I didn’t have 20% to put down. So, I found a different hard money lender. He was like, “Yo, just put 5% down and I’ll fund it.” But he wanted four points to do it and I’m like well you know, he’s more expensive but I’m not going to pass it but deal because I’m worried about a point.

David: That’s exactly, exactly how you got to look at it because when you’re, especially when you’re getting started, you don’t have a ton of knowledge and experience to be able to negotiate real well, you kind of just take what you can get when you do it. So, all right, you went from hard money lenders then. What is the difference now between a hard money lender and a private money lender and how did you make that transition?

Ryan: Yes, I mean, a hard money lender is obviously, you know, like a company that does it for a living, a private money lender would be pretty much anyone else. So, it’d be like a friend, a family member or just somebody that you have a personal relationship with that, you know, trusts you and that, you know, is willing to fund one of your deals. And so, anything with private money’s negotiable. I mean, you guys could do 50 slash 50 splits, any kind of split. You could do interest, you could do flat feet. Like, it’s just whatever you want it to be.

Brandon: That’s awesome. I love private money. I know that’s significantly cheaper. Generally speaking, better terms. Like, when I worked with hard money lenders, the thing that was like they were so ‘business’ oriented because it had to be, it was a business, right? But with private money lenders, I was like, yeah, that sounds good, all right, let’s do it, that’d be fun, you know, like everyone’s just so much more generally easy going. So, I’m a big fan of that.

Alright, so, I got, I got a bunch more and David, you can interrupt me if you’ve got cool questions too, but mine are probably not as cool as your questions are, but I’m going to ask it anyway. How did you scale up in terms of like 5 to 20 to 53 now 100 in terms of your- I want to go through how you find them, how you fund them a little bit, but business wise? Was it just you? When did you start bringing in more people to be able to assist with that?

Ryan: So, my first 20, 15, 16, I was by myself. I was finding the deals, I was the project manager, I was listing them because I’m a realtor. Like, I did everything and yeah, I mean I was able to do that with just that amount of volume. So, fast forward to 2017, when I started to do a lot more volume, you know, I had to hire my first guy and you know, I need to mention too, I was still playing baseball in 2017 so, I actually had to leave and go play baseball and I had like, you know, 10, 15 houses being remodelled or being sold or whatever. And so, I would be in the dugout or in the clubhouse like answering emails and calls and like all this and then I’d be going to play a game and like my mind would be thinking about a deal or something.
And then after the game I’d have all these texts and emails. I’m like holy crap, this is getting too much. And so, that was the first time I just realized like, hey, you know, if this real estate thing is going to take off, I can’t do this alone and I can’t play baseball. And we’re, like, it’s just too much, too much now.

And so, I ended up leaving baseball last year in July and you know, I was like content, I played eight years and I was good with it. But I ended up hiring one of my buddies to basically manage all my projects to keep tabs on all of them while I was gone playing. And you know, after I got back from baseball him and I just went at it together and we were able to just, you know, do 50 with just me and him only. And so, I see a lot of people who, think, ‘oh I need a huge team to do all this and that’, you really don’t like, you know, that’s evidence of it. But I’ll say now doing, we’ll do over 100 this year.

My team is definitely bigger now, I’ve got an assistant, I’ve got two project managers, now, my buddy who was with me in 2017, is listing them all and we opened a brokerage together. So, it’s a lot of different things now, but you know, starting out, it was pretty much just me and then me and him.

Brandon: That’s awesome. That’s cool. I like it. I like hearing the kind of the business development side because that’s something I struggled with a lot and I think that kept me back is I always wanted to do everything myself. I’m like, well, I’ll fix the toilet and I’ll show the unit and I’ll sell the property and we’ll deal with the contractor. And because of that I could do one, maybe two projects at a time. And I was constantly overworked. I wish somebody would have sat me down like, Brandon, you’re stupid, go hire, hire some people.

Ryan: Yeah. That worked for, I’ll say the thing that works for me is I don’t know how to fix a toilet or anything like that, so I couldn’t like go fix the house if I wanted.

Brandon: Yeah, that’s actually, yeah, people will think that not knowing how to fix things is it like a hindrance and I think it’s actually a skill, like, being really bad at fixing things makes you, you’re forced to think like a business owner versus me. I’m like, well, I can fix a toilet. Let me go over and show you all how it’s done. And then I’m like crawling around under a house trying to fix pipes, I’m like, what am I doing? Anyway, David, you had something.

David: Yeah, Ryan’s story is a lot like mine and that’s, I mean, Ryan, you got an awesome business model going on, we’re going to dig more into the details of that for people to hear. But what I love is I started buying houses in other states where I couldn’t go fix it even if I wanted to. I couldn’t go walk it and rely on my own judgment. I had to rely on other people to do this stuff I wanted to, which ended up being a huge blessing because I learned to get team members involved. I learned to delegate. I learned to only do the thing that was most important for me. The one thing that I needed to get that deal together and my business scaled faster than everybody else’s who was trying to do everything by themselves and it was hard to separate themselves from ‘I got to be the guy to do everything.’

You’re in that same position now. You and I were talking the other day and I was saying like, yeah, I used to be like, you know, sitting at a stop sign driving from one call to the next and look at my phone and my agent texted me about an offer and I’d write back like 120,000 and then send it and then I would drive to the next stop sign and I’m like, what did they say? You know, like we’re trying to do everything while we’re working and you’re sitting in the dugout and you’re like, well, are they going to put me in the game or not? You know, he walked to the back real quick and make this phone call.

So, you had to rely on other people and now you’re accomplishing what Brandon calls the stack, right? Like, you went from 5 to 20 to 53 to 120. Every year, you’re doubling or more of the production that you did because you’ve learned the power of leverage and you’ve removed yourself from the aspects of the business that are not what you’re best at. So, I just want to commend you and let everybody realized that the fears you have of why you can’t get into real estate investing might turn into the strength of your business if you do things correctly, right? Like, you don’t want to be the person who does everything. You want to be the person who does one thing really well and find other people who, their one thing is the stuff that you don’t really love doing, like the guy who fixes the toilets wants that job because that’s all he can do.

So, like first off, I think you have the perfect business model. I think more people should be copying it. What I’m really intrigued by is what you’ve done to remove yourself from your act, the work of the business. So, you want to flip and company and you do one role within that company. You don’t have the job of a house flipper, which is everything. Can you tell us a little bit about how you structured it and what role you’re playing and why you chose that role?

Ryan: Yeah, so I think to first off, you know, get to the role that I’m in, you have to have experienced the other roles first. And so like I said, when I was doing it all by myself, I was the project manager, I was the listing agent, I was, you know, finding deals, all those things. And so, you know, I’ve experienced the other roles. So, you have to know what the other roles need in order to train somebody to do it. And so, I see all these people all the time like I want to create a great system and do this, I’m going to get my project manager this and that, but they don’t even know how to train them because they’ve never done it. And so, I think before you can even create this huge big company, you have to have experienced those roles first.

Now, I don’t think you need to be [Inaudible] [25:55] toilets, but you have to know how to hire a contractor and find a contractor. And so, you know, I learned all those things and now I’m at the point where I kind of just oversee everybody. You know, I oversee those people who manage those other people. And really my job at this point is to just say yes or no to deals. And so, you know, I get deals and leads sent to me every single day and I evaluate them and you know, I say yes or no. And if I say yes, then it just goes into the machine and I’ll get a check hopefully four months later. So that’s kind how I’m structured right now. And even that could be, you know, delegated out at some point I could get somebody else to handle the leads. But you know, that’s the toughest part is, you know, lead generation is the biggest thing with flipping.

And so relationships are how I’ve built my business. I have relationships with all these whole sellers, with all these realtors. And so, it’s like they come to me when they have a deal and it’s hard to say, “Hey, go to my assistant”, you know, because it kind of breaks that relationship, that’s the tough part for me.

David: Yeah. I want to, I want to dive into that a little bit. Finding deals right now, it’s hard for everybody generally, but you’re buying a dozen houses a month. That sounds like, you know, or maybe not quite that, but like you’re buying a, a good number. So, how is it that you can find, you can buy 10 houses in a month when a lot of people are saying, “I’ve been trying for six months”, I can’t find a single deal. Like, what are you, you’re doing relationships, you say, what does that mean? Is that the only thing you’re doing? Let’s talk about that a bit.

Ryan: Yeah. So, starting out it is very hard to find a deal, like, it’s extremely hard and my first year I bought 5, which I thought was extremely good at the time and what I found, in this business, is the more relationships you build, it just exponentially grows because then they tell someone else about you and it just keeps growing that way. But also, you know, once you get one relationship, as long as you maintain it, that’s, you know, it’s there forever and you’re going to keep getting more relationships every year and so now like my network is just so much bigger than it was even last year.

So, I’m still getting deals from the previous relationships I had. But now, I’m getting deals from the new relationships I have. And so, it just keeps growing exponentially and that’s really my business model is just building relationships with people and providing them value and helping their business grow. And if I’m able to do that then we’re going to do business together. If I’m just in it for the money and like hey, send me a deal and I’ll say yes or no. It doesn’t work like that too many people think that.

Brandon: So when you say an ‘agent’ that an agent is helping you, like, is this something they list on the MLS and then they call you and be like, “Hey we just listed a property you would like this?” or is this something different?

Ryan: Yes. So a lot of times I’ll get what’s called ‘pocket listings.’ Agents will send me home before, you know, they’re going to list them on the MLS and they’ll say, “Hey, you know, you want it for this price?” And I’ll say yeah or no, or I’ll say what price I can do it at. So, you know, I get a lot of deals that way. But also, I find a lot of deals myself on the MLS, I’ve got searches set up and all of these things and the so, I’m making offers on the MLS every day. But you know, everyone else is making offers on those properties too, right? So, it really depends on who the agent wants to pick because yeah, you might not be the highest offer, but if they know you’re going to close and you’re not going to BS and you’re not going to, you know, try and renegotiate later, that gives you a huge advantage.

Brandon: I think and David, you can speak to this as well, I’m sure, but I find that agents have way more power than a lot of times we think they do. A lot of times we just think the highest offer is going to be the one, except when you’re making an offer on something that, well clearly the highest offer somebody else. But like if the agent really likes you, like their agent likes you, they have a tremendous amount of sway because they can use those arguments like, well, you know, yeah. You know, “That guy did it 10,000 higher, but I know this Ryan Guy, he can close. I’ve done eight deals with them in the past year I think you should go with that.” Like, who is the seller going to go with? Of course they’re going to go you because they’re going to most likely take the agent’s advice there.

David: That’s a 1000% accurate. I mean as a real estate agent, even just the tone that I use when I’m going over the offer with my clients, I can influence them to go any direction that I think is best and really as their fiduciary, I’m supposed to influence them in direction I think is best. So, if I know Ryan is $5,000 less than the high offer, but he’s really likely to close and I’m excited about Ryan’s deal and I’m saying why his offer is so great. And then I talk about the other one, I’m like, “Well it’s $5,000 more, but you have this, you have this. Is it really worth it?” 9 times out of 10, they’re going to go with the one that they can tell that I think is the best bet and investors shoot themselves in the foot when they call the listing agent and they’re like, hey, you can double end it. You’re going to make more money and therefore, you better do this and this and this and this, and they just like, you know, beat up that real estate agent because in general, real estate agents are not respected. People think that they’re just a means to an [Inaudible] [30:03], a key that opens a door and that’s all. And they treat them like that.

And I guarantee you, I’ve seen it. I’ve seen the agent’s face as the person’s doing that, just go from smiling to like, I’m waiting for you to shut up so I can shut the phone and there’s no way you’re getting this deal. You know, Ryan has figured out the secret sauce when he talks about relationships. It’s treating people right, bringing them value first. I guarantee you, when he’s talking to the agents that bring him deals, he’s saying things like, ‘what are you doing in your business to generate leads?’, ‘here’s what we’re doing that could probably help you out with what you’re doing’, ‘here’s a trick that I’ve learned or a software that I use or a script that I use that really works with people’ and he’s making them money which makes them want to make him money. Like, those are the best relationships and if people could only figure out one thing about business, it would be that. And whether you’re flipping houses or flipping couches, you can make money if you figured out the relationship side.

Ryan: Yes, 100% right, man, because I have so many emails and texts just from agents like, “hey, you know, you weren’t the highest offer but you were the one we felt the most comfortable with”, you know, this and that and there’s going to be a lot of offers you make where it may not even be 10,000 difference, it might be a 1000, 2000 bucks instead of the seller. It’s like, that’s not really a big difference. Like, who am I going to go? Who do I like better?

Brandon: Yeah, that makes sense especially when you’re competing with other flippers as well, like, they probably have similar numbers in what you do and so your offers are probably, not always, but probably in the same ballpark and that just comes back to the relationship thing. So would you, if, I don’t know if you track this very meticulously, but do you have an estimate on how many offers you typically would make on like an MLS kind of deal? What percentage gets accepted? I mean are you like 50-50 or you 1 out of 100?

Ryan: So, I do it a little differently than most people, so I’ve got auto searches and stuff set up on the MLS and I probably get about 30 searches sent to me a day and so I’ll review all 30 every single day and you know, I can tell just from looking at the address and the price and the square footage like okay this one’s not even close to deal, not even to worry about it.

And so, I can go through those 30 and about 30 minutes every day and you know, probably maybe 5 out of those 30 are worth actually comping out, looking into inside of those five, I’ll just make an offer on it, I’ll send them a text or write them an email. That’s the only way I make an offer. I don’t go through writing the purchase agreement and all this stuff because it’s a waste of time if I’m not going to be close. And then when you do send a text or an email, it opens up dialogue to like build you that relationship. Because if you just one of these guys who sends an offer, they don’t know who you are, it’s just a piece of paper. But if you’re actually speaking with them, you could feel them out and be like, ‘alright, where do I need to be to get this deal done?’ Like, ‘what’s the seller’s motivation?’ you know, ‘what can we do other than price that will make them want to do the deal?’ ‘Do they want to rent back? We’ll buy it as it is.’ ‘When do they want to close?’ Like, you can talk about these things when you can contact them directly like that.

David: I love that. You’re not just firing off a bunch of offers and hoping something gets accepted, you’re building relationships. Again, it just all comes back to that. That’s awesome.

Brandon: All right, so we’re, that’s just a really fantastic strategy in general. Let’s talk about wholesalers. Can, you said you also get a lot of deals from wholesalers, can you define what a wholesaler is, and how you find them and how do you build those relationships?

Ryan: Yeah, so I had somebody asked me, you know, explain what a wholesaler is in the simplest way and I just said they’re a contract flipper, we flip houses, they flip contracts and so really they’re targeting all these sellers and they’re trying to negotiate with them and do all the work for you and you know, if they get it under contract, they would then assign the contract to you or flip the contract to you for whatever fee you guys agree upon. And so wholesalers are your best friend, man, like they, they do all the dirty work, you just have to say yes or no and you know, I know a lot of new flippers and I was [Inaudible] [34:12] when I started too, they see the whole sellers [Inaudible] [34:14] and they’re like, “Oh man, you don’t deserve to make that much, you’re going to make more than me” or whatever the case may be. And it’s kind of naive thinking because what’s it matter what they make.

Like, I tell wholesalers now, don’t even tell me what you make, just give me what my prices because I don’t want to know and I don’t want you to think I’m trying to take out of your pocket. Like, I’m just going to give you what I can pay. And so, I think last year I probably paid like 400 grand in wholesale fees and I’m pretty certain I’ll pay over a million this year in wholesale fees. So I love those guys. You know, I don’t care what they make. Like, if the numbers work for me then let’s do business.

Brandon: That’s cool. So where do you find them at, like if you’re like, not necessarily you, but where does somebody who’s listening to this show and like, ‘Oh, I want to go find a wholesaler, somebody who does all the hard work for me.’

Ryan: Okay, so, you know, there’s probably three real easy ways. Number one is, go to a real estate meet up, I know you guys talk about that all the time, like, it’s true, you’re going to find a ton of them there and you know, build relationships with them, see what kind of value you can offer them as an investor.

The second way’s Facebook, man, that’s why I’m so active on Facebook. I’m constantly like, trying to friend request realtors and wholesalers and all these things because I want them to know who I am. And you can go on Facebook alone, there’s tons of wholesaling groups and you just go join them and let them know like, ‘Hey, I’m in Las Vegas and I’m an investor, I’m looking to meet wholesalers.’

Or you just search for wholesalers who’ve already posted in that group. Another way is to just go on craigslist and call all the bandit signs that you see because those bandit signs are wholesalers and then they obviously post on craigslist too. I mean like there’s so many ways and you know, that’s why I wrote the book, all those ways are in it too.

Brandon: That’s awesome. Yeah. That’s awesome. Yeah, finding meet ups and then when you find, when you find good wholesalers, there’s also a lot of people who are just horrible at wholesaling and would never be, they’re not going to be good at it, they’re just looking for a get rich quick way or they went to some guru thing. How do you, how do you differentiate between a time waster, like a wholesaler who is going to waste all your time and somebody who is legitimately worth investing your time to train or to help to work with. How do you, how do you differentiate that?

Ryan: Man, I wish I had a great answer for that, but that’s a tough one because I would say probably 9 out of 10 people you meet in a meet up who want to wholesale aren’t going to do anything and that’s just the reality of it. And you know, I haven’t been to a lot of meet ups recently. I know I need to start going back to them and meeting people because I mean like I’ll tell you, the last meet up I went to, I met one wholesaler and we’ve done probably five deals together, so it’s like that meet up, just going and attending that meet up probably made me $150,000 by just choosing to go there so that, that shows you the power of going and networking and but you know, I’ve also taken so many meetings, coffee meetings, and people come into my office and they just never do anything. And so, it is tough to determine like who you want to invest your time in. And I would say always meet everybody regardless, you know, and if they’ve got persistence and they want to keep meeting with you or they’re asking about, you know, if they’re asking you the right questions, like, ‘Hey, what do you think of this property?’ ‘Hey, you know, what would repairs beyond this?’ Then you know that they’re actually doing something. But most people, they’re not doing anything so, you won’t ever hear from them again.

David: Unfortunately, wholesaling gets prescribed as, ‘oh, you want to learn about real estate investing, but you have no money, become a wholesaler; it’s super easy and you don’t need any money to get started.’ So, you have all these newbies that walk into that realm, not having any of the skills that are needed to be a wholesaler that want to get into it.

When people complained to me about wholesale fees, I usually tell them everything’s a funnel. Brandon is known for talking about this all the time, right? So, we’ve had this lapse funnel that we talk about, right? And this is the process of you take a lead, you analyze it, you pursue it, and then you would succeed by like closing on it, right? So, in the beginning, at the top of it, you have everybody in the world, they’re all some form of a lead and then you move down and you analyze something and then you move down even further and you look at, do I want to make an offer? Well, wholesalers are taking that whole first step, the lead, like finding people that might want to sell their house and they’re doing it for you. You’re jumping into this funnel near the bottom of it where it’s very narrow and most of the hard work has already been done and you’re paying a fee to avoid all of it.

The hardest part is finding the deal and getting it under contract, right? It’s where all the heavy lifting is done in this deal and you’re paying a wholesale fee, but you’re avoiding all the advertising and marketing and labour that you would have to spend to go do that work on your own, right? It’s awesome. It’s like a meal prep, somebody makes it for you and you just get it right away. Now, if you have no money and a bunch of time, you’re going to cook your own meals, but if you have a job and you’re doing something in your business is somewhat successful, it doesn’t make sense to stop what you’re doing and cook your own meals. You let somebody else cook it, put it in the fridge, and you just go in there and eat it, right? So, if you change your mind set about what your, how you think about it, you’ll actually make way more money doing things that way. And if you focus on creating systems like what Ryan has done, he’s just now like feeding something into this machine over and over and over and the wholesalers are bringing them, wholesalers are bringing a product that he can just like drop right into there.

So, what I’d like to ask you, Ryan is can you give us a hypothetical example of like a lead comes in and what that process looks like for how your business will process it?

Ryan: Okay, so let’s just say a wholesaler sends me a deal, I’ve told them all that, ‘hey, all I need is the price, pictures and the address. If you give me those three things, I can tell you what I need.’ You know, I’ve gotten to the point where I don’t need to walk properties to bio, like, yeah, if it’s really bad or something, we need to go see it in person, make sure that the rehabs are what we need to see. But for the most part with, with what I buy in Vegas, they’re all pretty standard, it’s not anything crazy. So, they’ll send me those, the property with those three things and pretty much I’ll just say yes, no, or I’ll give him my counter. And that’s really as simple as it is. Like, I try and make it so simple for everybody that ‘Hey, you know, if you’ve got a higher offer or something so be it, like no hard feelings, it is what it is.

Brandon: Yeah, that’s great, that mentality is just what’s needed because again, it’s all a funnel, right? It’s all a funnel. Alright, so let’s, I want to talk about your systems a little bit as part of the funnel. Let’s go into the funnel because I’m obsessed with it as David Greene reminds me, oftentimes, let’s talk about what happens. So, you have, I mean, let’s say a wholesaler contacts you, says ‘Hey, I got a deal.’ Walk us through the entire process. I mean like, who takes that phone call? Like, when do you make the offer? Can you kind of walk through the journey of a deal to closing?

Ryan: Okay, so with me, let’s just say, I’ve already built a relationship with the wholesaler. They say, ‘hey Ryan, I got a deal.’ I say, all right, great. So, they sent me those things, price, pictures, address. I’m going to immediately look it up like ASAP. Because a lot of these other flippers, they like, I don’t know what they got going on, but they won’t get back to them until like hours later or even the next day or days later. I’m like, really whoever’s first to commit is going to get the deal. I even have a wholesaler who blasts it out and whoever says yes first gets it and like it literally goes within 15 seconds. I’m not kidding you. Like, that’s the type of speed that people are buying it. And so, you know, if a wholesaler sends me a deal, I’m going to immediately drop whatever I’m doing and I’m going to look it up immediately and make sure how the numbers pencil out.

So, you know, I’ll go and competent online using the MLS, I’m a realtor and make sure that the numbers work. And so, my biggest advice is, if the price they send you works just accept it, do not try and beat him up and try and get a few extra thousand bucks out of it or whatever. Like, you’re going to hurt yourself in the long term because there going to be like, ‘man, this guy is always beating me up over price, blah, blah, blah.’ Like, you want to be their best ally. And so, if the price works, I’ll just say, ‘yep, let’s do the deal man.’ And so, at that point, if we say yes, then you know, they’ll send me over the contract, the assignment contract, then I’ll find out what they’re making on the deal because the assignment will say, and I love to see that they’re making a lot of money, man. Like, I’m not going to be mad that like, ‘oh, I could’ve got him down a little more because they got a big assignment now’ I’m like, ‘Oh man, sick dude, that’s awesome. You’re making 40 g’s on this man. That’s great. And you know, I’m getting the price I want dude. It’s a win-win.’ And so, we sign the assignment and typically these guys will require a non refundable earnest money and it’s usually about five grand.

So, you know, the next day we’ll go and deposit the earnest money and you know, go into contract. From that point, I will then prepare the deal to one of my private money lenders and I’ll say, ‘all right, here’s the property, here’s how the numbers break down, here’s the comps, I need the money wired on this date. Do you want to do the deal?’ And they’ll say yes or no, and so I’ll just do it until I find somebody who says yes, but you know, my private lenders are trained to the point where if they have the money, they’re saying yes like, they don’t even look at the deal half the time they’re just like, all right, like just tell me where and when to fund it. And usually we have two weeks to, to do a deal. That’s pretty much the typical timeframe for these guys. And you know, two weeks from now we go in to close the deal. But in between that time I like to have one of my project managers go look at the house and make sure that the pictures are what, you know, they said they are.

Most of the time the whole sellers are able to do that but sometimes you know, you got a bad tenant or somebody who you can’t get into the property and you’ve got to buy it with just what you got. So, every deal is different that way. And really like, if I go to a prop-, not me, but my project manager goes to a property, you know, he’s going there just to make sure it’s what we thought. Like, he’s not going there to try and say, ‘oh man, this is way different, we need a lower price’ because I know that there are people who do that as just like I said, man, they’re not playing the long game. They’re trying to win a little battle instead of worrying about the war. So yeah, like after we close on it, it’s a done deal and everyone’s happy.

Brandon: That’s awesome. I love hearing that. I love hearing how people kind of work that process from a big picture because a lot of people are stuck in the day to day like, ‘well, okay, what do I do next for a deal?’ But anyway, kind of stepping out from like a 40,000 foot level is kind of cool. So, speaking of that, I actually want to a dive a little deeper as well in the next segment of this show called ‘The deep dive.’

Hey everyone, Rob here. I’m head of product and engineering for BiggerPockets. I’m here to make an exciting announcement, we just released our new mobile app while you finish listening, go download it. You can participate on our forms, read the blog, receive [Inaudible] [44:35] alerts and more. Go download it now and you’ll thank me later.

Brandon: All right, so today on the deal deep dive, we are going to one specific property that you recently bought and we’re going to ask you seven questions that are just going to go real deep into this. So, first of all, you got, you got a deal in mind by the way? All right, so the questions are with the first one, how did you find it?

Ryan: Alright, so this deal was an out of state deal, I’m doing this for David he’s the out of state guy. So, you know, I have a few properties in Big Bear, California and it’s about a three hour drive from Vegas. And so, I just liked vacationing up there, the air bnb is good, is great. So, there’s this little town called Baldwin Lake, which is maybe like 10, 15 minutes outside of Big Bear and so, there’s like, it’s so tiny, there’s no investors there. It used to be a lake, but now it’s dried up so it’s like kind of looks like a wasteland.

But, so I had this contractor hit me up on Facebook. He was like, ‘man, I want to get into wholesaling. I saw you buy in big bear, you know, I’m, I live up here, yada, yada, yada.’ I was like, ‘yeah man, let me know if you ever get a deal or however I can help you just let me know.’ And I didn’t think anything of it, you know, that happens a lot. And so, probably two months later he goes, ‘Ryan, I got a deal!’ I was like, all right, tell me about it. He’s like, it’s in Baldwin Lake. I’m like, okay, I’m not as excited anymore, like, okay. And so, he starts telling me about the deal. He’s like, ‘man, I think you’ll really like it, it’s really good, like it’s a house and a guest house on an acre of land.’ I was like, man an acre land’s a lot, especially out there and a house and the guest house? I was like, all right tell me more. And so, he starts telling me about it and he’s like, that’s 150,000, I don’t know what it’s worth but you can just run the numbers and so, I’m running the numbers and it’s tough to get comps out there because there’s just not a lot of houses for sale and it’s very unique, it’s a house and a guest house on an acre, like, nobody else has that.

And so yeah, I’m looking at the comps and I’m like, well I don’t know how long this thing will take to sell being in this kind of remote area. I don’t know for sure what it’ll sell for, but I know like, crappier houses are selling for 250. And so I’m like, let’s do the deal. I don’t know if you [Inaudible] [46:53] ask the other questions.

Brandon: Yeah, we’ll move on. So, you bought it. For the second one was, how much was it? 150? Is that what you paid for it? 150?

Ryan: Well, so he ended up telling me it was 150 and I’m like, all right, send me the contract, let’s do it. And he’s like, I don’t have a contract. I’m like, so we don’t even have a deal? He’s like, well, I don’t really know how to do the contract. I’m like, alright man, let’s go back to step one. So, he’s like, alright, I’ll contact the seller. I gave him a contract that I use; I’m like just get them to sign this. And the seller was really sketch because he just didn’t know what he was doing, right. And so, he calls me back, he’s like, ‘dude, I’m going to lose the deal, like can you save it?’ I’m like, alright man.

So, I call the seller and we start talking and stuff. I’m like, look, I’m going to buy it, it is what it is, you know, making them feel confident about the deal. And so, we ended up putting it under contract for 140. That was what he had agreed to them with and you know, I told him I’d buy it for 150, so I honoured that and I said, look man, I’ll give you the 10 grand once we close. And so, we ended up closing about two weeks later he got the 10 grand, I mailed them a check. That was his first deal ever. I mean, he was so pumped, like you wouldn’t believe it, man.

Brandon: That’s awesome. I love that you didn’t, you know, like he had to have a lot of trust in you that you would give it to him because you didn’t have to give him anything, right. But that goes back to the relationship thing. Now this guy is going to do anything in the future, hopefully for you because he’s going to work hard because you know, you held your word, super cool, yeah.

All right, next one, this kind of, I guess you kind of already covered it, but how’d you negotiated? Did you do anything fancy negotiation in there or he took care of you?

Ryan: Yeah, he had already agreed to the price with the seller and so, you know, it was just really going in and being like, we’re going to close this, you know, and there’s not going to be, I know my guy, he kind of, he might’ve been saying some things that didn’t make sense, but let me tell you about me, this is what I do and I own these other properties so, feel confident.

Brandon: Yeah, that makes sense. Okay, alright. So, we covered finding it, how much it was, how’d you negotiate it? Well, funding, how did you fund it?

Ryan: So yeah, after I got it under contract, just like the other deals, I just sent it off to one of my private lenders I’m like, ‘Hey, here’s the deal, I’m unfunded.’ Yes, it was done.

Brandon: And, and when you do that, let me just step in, you’re basically giving them a first lien position, correct? And they are funding.

Ryan: Correct.

Brandon: How much are they, your private lenders, to be giving you, all of it, all plus repairs, a piece of it? How’s that usually working out for you?

Ryan: So, you know, any private lender I bring on, I let them know that they got to fund everything, like I want to be no money out of pocket on all these deals and so, you know, they’ll fund the purchase, the escrow fees, the Rehab, and then I’ve gotten them to agree to take their interest on the back end. So I’m not making any monthly payments either. You know, they get everything [Inaudible] [49:34] and they get it when it sells.

Brandon: That’s cool. And that’s hard, that’s hard to get and people are listening to that, there’ll probably like, that’s amazing, no money down and no payments, right? But you’ve got to build up trust to be able to establish that. It’s unlikely, unless it’s like your mom, that you’re going to get that 100%, yeah. But with relationships, again, just definitely the theme of today’s show, you can, you can accomplish almost anything. So that’s awesome, alright.

David: And that’s why you want to stick with it because even though you may pay hard money fees in the beginning with every hard money jail you do, you add another one under your belt, you get a little bit better and you get one step closer to getting into private money. The more private money deals you do; the more private money lenders you get, the bigger you can scale. Like, when you only think about the money you’re making, you’re being very short sighted because with every deal, you get new opportunity and that’s something you have to pay attention to as well.

Ryan, do you think you could very quickly explain how you have you have title setup having somebody put like a first lien mortgage on a property? Is that something that’s very lengthy or is that something new investor can get done really quickly?

Ryan: No, it’s pretty easy and so you know, basically when you’re soliciting private money or not, not soliciting, maybe that’s not the right legal word, but you know, talking about it with somebody, you’re just going to explain to them, like you said, ‘Brandon, you’re going to put a first position lien, so in the event of worst case, like I just totally don’t perform, you’re going to be able to foreclose on me and take the property so they have that secured asset.’ As far as the paperwork, I can see why a lot of people would be scared of like, ‘hey, I don’t even know what to do.’ That’s what your title companies for. Your title company can write the note and deed of trust for you and it’s not that expensive.

David: And your private money lenders are paying for that service also so, you’re not doing anything. This is why this is a great way to buy real estate, I love it. Okay, so with this deal specifically, what did you do with it? Did you flip it? Did you rent it out? Was it a bird strategy?

Ryan: So after we bought it, the tent, the reason I brought up this deal is because I learned a lot about California and so we ended up flipping it, but there was a tenant in it and so like in Vegas typically you just got to serve a 30 day and that gets them out of there. But it’s California, they’ve lived there like over a year, you [Inaudible] [51:39] a 60 day and so we had to wait 60 days before they left and it took them a long time, they’d been living there for awhile and they were paying way under rent so they weren’t happy about it.
And so, you know, after we were finally able to get them out there, you know, we went in there and the Rehab was about 20 grand. It was a very simple rehab and the guy who did the rehab was the guy who brought me the deal. He was a contractor and so it was easy for me, like I already had it all in place with him. I’m like, all right, you can do the rehab to make money that way too. So, he finished the Rehab. It probably took, you know, it took longer than I want. It probably took about two months. But when you’re in these remote towns it’s hard to find people who can do things quick.

And so yeah, after two months we put it on the market and I’m looking at the comps and I’m talking to my local realtor out there and it’s funny, I asked her opinion before I bought the deal. I go, ‘Hey, what do you think about this property?’ She goes, ‘Baldwin Lake? No way!’ Like, you do not buy involvement like, and I’m like, ‘I don’t know, I’m looking at it, it looks like there’s no way I lose’ and she’s like, ‘all right, buy it and then we’ll list it, whenever’ and I’m like, ‘okay, I’m going to buy it.’ And so, when we got to list it, I’m looking at the comps and she’s looking at the comps and we’re like alright, let’s list it for 300, like I think we could get $300 for it. I’m like okay, that’s kind of what I see too. So we listed for 300 and this was the tough part of the deal because in a remote town like that, I don’t know how quick things are going to move, especially because it’s a weird product really.

And to my surprise, within a week we had two offers. I was like, dude, I was expecting at least like 30, 60 days on the market. So, I was super surprised and one of them was a lone offer for I think like 290, then we got another cash offer for like 280. I was like, okay, let’s try and negotiate with the cash and get this thing moved. So, we ended up negotiating back and forth, we accepted 290. I then found out that the cash offer was the person who lived across the street. I’m like, what the heck? And she was like, yeah, I was out putting my lockbox on there and the people said, ‘oh, is this house for sale?’ And she’s like, yeah. And then they start talking and talking and she ended up finding that buyer and getting both sides of the commission and which I’m totally happy with, I don’t care.

So, we ended up agreeing at 290, we ended up finding out the septic tank was like, all busted up and all this crap so, we gave them a price reduction down to 280, but they closed it, like two weeks later. And so, yeah man, it was a sweet deal just all around because it was like, man, that’s just such a weird remote area, such a weird house, all this stuff and agent got to work both sides even though she didn’t think I should have bought it. And so, it was good deal all around.

David: So you sold for 290, that was the outcome you exited-

Ryan: 280 after a repair credit thing.

David: Okay, Gotcha. What lessons did you learn from this deal particularly?

Ryan: Well, as far as California goes, I learned a lot of rules, I didn’t know about. Like, I didn’t know about the 60 day thing and then I didn’t know because here in Vegas, you know when you don’t, you just sell a house, you don’t have to claim your capital gains or anything. In California, they make you claim it right there and then.

David: Yeah, we withhold it. [Inaudible] [54:52] The title companies look at it. And they basically say, ‘oh, this is your capital gains. We’re going to keep it. You don’t even get that much at all.’

Brandon: They take it right away.

Ryan: I was given an interest free loan to the government for a year. Six months.

Yeah, dude. I was like… I was at the title company when they first asked me about it. They’re like, yeah, you know, ‘What’d you make on it?’ I’m like, ‘Why does it matter?’ And they’re like ‘we had to calculate your capital gains.’ I’m like, what? And they’re like, ‘Yeah, you got to pay California also, like 12%.’ I was like, ‘What? I’m not even a resident of California, man.’ And yeah, that was a learning lesson, I’m like, ‘Dude, that’s a bummer.’ But obviously I’m not going to not flip it because, you know, we ended up making like, I don’t know, 70 grand on it.

David: Oh, awesome.

Ryan: Then California tickets junk, but it’s all good.

David: That’s California. I’m getting [Inaudible] [55:41] tax tax by Kelly Kelly’s. That’s exactly how like every, it’s bad out here, but your profit margins are so big, like what you said, you’re not going to do it, you made $70,000 on that deal. Yeah, that’s awesome.

Brandon: Yeah. I love hearing. I love hearing stories like that and again, there is some risk there right when you’re doing a small town, like I invest in a small town and that flipped and sometimes like I had a house on the market once for a year, 12 solid months because it was a weird house in like a nice area of a not nice town and so there just wasn’t any buyers. Nobody wanted it. And this is also 2012, which was a horrible time to try to sell a house. But yeah, you know what it is that, you know, no risking no [Inaudible] [56:19]. I don’t, I don’t think anyone else would have bought that house either. You know, even the realtor was like, don’t buy it. So like, you know, you are taking a risk for sure.

Well, awesome. Well, thank you for sharing that. That was, that was fun. I love going through those deep dives. I feel like that’s probably my new favourite segment of this show because I love just hearing the stories of deals. But we’re not quite done yet, we got to move on to the next segment of the show, which we lovingly refer to as our fire round.

It’s time for the fire round. 

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Brandon: All right, let’s get to today’s fire around these questions come direct out of the BiggerPockets forums, which of course you can access day or night 24/7. There’s like 2 million posts in there right now, it’s crazy. And we’re going to take a small sampling like four out of 2 million to ask Ryan today. So, let’s go this one. I’m going to shorten this one, so, it basically an investor who happens to be Brandon Turner, me, but recommended to this person that to buy a property and see if you can increase the value of the property 10% like a rental property, start by 10% increase in the value. How do you accomplish that? What’s the best way to quickly increase the value of a property, cheap?

Ryan: On the cheap?

Brandon: Like what’s the smallest amount of money? Basically the question is like, what’s the least amount of money you can put into something to hopefully get the highest value increase on it?

Ryan: Well, you know, I’ve got a few rentals but I’m not much of a rental investor so I’m not the best guy for this question. But I’ll say like little small things that we do in flips are, you know like with a kitchen, right? If you’ve got nice cabinets are in good shape, but maybe they’re the old oak. I mean you can paint those things and they will look extremely nice and I mean it costs like a thousand bucks and you do that and you throw granite, you know, you could get away with like 2,500 bucks and you’ve got a totally new kitchen. So, I think that would probably be the quickest way.

Brandon: That is a perfect example. Yeah, that’s, that’s when I, when I mentioned that I wrote a book awhile back called “Seven years, Seven figure wealth” and I said in there, if you could increase the value of your house 10% when you buy it, by some improvements. And that really is like paint the outside of the house, do some landscaping, paint the kitchen cabinets; it’s like little things like that can really dramatic; or add a bedroom; like take an old living room and add a bedroom.

Ryan: I should’ve thought of that. That’s great.

Brandon: Anyway, yeah, in my book I talk about upgrade hacking and those are some of the big ones, you know, like painting a cabinet is no one likes to do it because it’s kind of labour intensive, but it makes such a big difference. Those oak cabinets or just an eyesore and then you can pay like 50, 75 bucks and throw some of the, what do you call like the little finishing, like the knobs that you’re going to pull on. It makes a huge difference and people don’t realize how cheap granite is compared to what it used to be. It used to be like $10,000 for granite in a kitchen and like everyone’s still thinks that way but now you can buy slabs are granite for like 800 bucks and just pay someone a couple thousands and put them in a lot of the time, so those are great answers.

Ryan: I don’t know about you guys but in Vegas, you could get a slab of granite for like 130 bucks.

David: Wow. That’s cool. Okay, next question, and I’m interested to hear how you answer this because I don’t think that the way they’re asking is the way that you would handle it. They want to know what are the common signs that a property has issues with its foundation. And when scoping out a potential property, likely a fixer upper, what are the tricks and techniques they use to quickly spot check or eyeball those issues?

Ryan: Okay, so obviously, this is going to sound funny, but when you’re looking for a bad foundation, it should be pretty obvious. Like you’re walking through it and it’s like, ‘oh man, like this floor is pretty wavy or this floor is definitely like sloping’ or something like that. The other thing you can look for is cracks in the wall and so if you see a bunch of cracks everywhere, you know, that there’s something going on now.

Now, it’s tough to say like how serious of a problem it is. Like, I’ve sold plenty of houses that had bad foundations. You got to just really, you know, know from experience, but a quick and easy way. And so as I think this is what they’re looking for is to look at how big the crack is. If it’s like a small hairline crack, then you’re going to know like, hey, it’s not that bad. If you’ve got to crack the size of a quarter or a coin, then you know that like, all right man, this is a big deal. Like you know, run away if you got something like that are really planned for a huge foundation issue.

David: Yeah, that’s really good. And of course like you know, if you’re, if you’re even unsure even remotely, like hire somebody in there to knows what they’re doing.

Ryan: Get an inspection; get a foundation guy out there.

Brandon: Yeah, yeah, that’s cool. Yeah, I like it. Different areas to a foundation issue, like if you’ve got a basement issue or there’s some foundations shoot that you might be looking at 100,000 dollars fix. But in my area, like I mean all our houses are built on what they call it, like a post and beam or post and pier or whatever. Anyway, like a jacket of a house. It’s like literally go under the house to take a little bottle Jack that you get for $20 jacket up in the flats, some shims under like it’s that easy to like I buy lots of houses that are sloped and you know, funky because it’s like, ‘Hey, I can pay a guy a couple of thousand bucks and he’ll level the whole thing.’ So, just knowing your area, knowing your stuff. So, anyway, cool. Good question there.

Next one, I love this one because this is the exact thing has happened to me. Well not quite exact but pretty close. ‘How do you deal with bad neighbours? We just listed our latest flip and the neighbour is crazy. She screamed at our septic guy and our project manager. Today I received feedback from a buyer’s agent that she came right up to the potential buyer today and screamed in their window “get the f out of here.” Needless to say, I’m a little concerned. Any ideas on what I can get the lady to relax and let me sell the house [Inaudible] [01:02:17] will be nice or some kind of incentive?’

Ryan: Oh, man, I’m laughing because that has happened to me many times. So like I’ve got this flip going on right now where literally both neighbours are like crack heads and so they’re just, they keep going in the home while we trying to fix stuff. I’m like, dude, how the heck do we fix this problem?

And you know, I buy a lot of homes too and you know, not so nice areas and so, you know, you get the problem with vandalism all that stuff. So, it kind of all relates. But I would say for her particular problem with the neighbour, seriously, probably cash is the best thing. Like, if you just go to her and you say, ‘hey, here’s the deal, I’m going to pay you x amount of dollars but I’m going to pay you when the house closes. Like I’ll give you 100 bucks right now in good faith and I’ll pay you another 500 bucks once the house sells’ and then, you know, if she’s that crazy, 500 bucks, probably will get her to shut up. You know? So, I think money talks really. There’s, you can’t go give her a gift basket, she isn’t going to care.

David: I like that. That’s like, it’s like cash for keys but it’s cash for crack heads, right? Like, he can’t get this person quiet. That’s really good.

‘Quit taking my copper’ just that’s so much better than my answer out of been like I’d put a hungry Doberman inside and let them figure out when they go, this isn’t a good house. This is why Ryan is so smooth that I am not. It’s a good answerer. All right, last question, and it is a great question. So I’m, I’m curious to hear how you answer this. How do you find a good contractor?

Ryan: Yeah. So especially when you scale, finding contractors is a really hard part of this game, man. The number one thing I would say is referrals are your best friend. Like, if somebody already used them, then that means more than anything else. So, the number one thing I would do is go post on Facebook right now, ‘hey, I’m looking for contractors who’s got some referrals’ and that’ll get you at least one. If you have 100 friends, somebody will say one.

Another thing you could do is, you know, I heard Jay Scott say it a million times, like go to home depot, go sit there and just wait for people and introduce yourself, and that’s a good way. Another thing I do is, I’ll be just driving through the city and if I see a dumpster that tells me they’re working on the house, so I’ll just go knock on the door and be like, ‘Yo, I’m a real estate investor, you know, are you contractor? What do you do?’ And then we’ll get to talking and they’ll say, ‘Yeah, yeah, I can do this. Or I know somebody’, if you get a no, always be like, ‘Alright, well do you know somebody who can do this for me?’ Always try and get the most information you can out of people, so those are a few ways.

Brandon: In other words, it’s like a funnel, you could say. There’s a lot of potential contractors at the top and you filter them down to find the one that’s going to work on your deal. Look at that, David’s over there really impressed right now, I can see it in his eyes.

David: Someday Brandon’s going to write a book called ‘funnels’ and it’s going to sell 10 million copies because he’s been hyping it for like the last 10 years every single time he talks.

Brandon: It’s going to be called, ‘Everything is a Funnel circle.’

[Inaudible] [01:05:20 – 01:05:23] I think it’s Adam Sandler thing, maybe. I can’t remember. I’m going to look it up later. Anyway, we got to move on. Let’s get to our “Famous Four”, get to the same four questions we ask every guest every week. Number one, Ryan, favourite real estate related book other than your own?

Ryan: Other than my own, man, that’s tough. Okay. And you didn’t pay me to say this man, but I got to give it to your ‘Loan. No money down’ book.

Brandon: People haven’t said that while it’s been a while, so thank you. I’ll send you a $20 later.

Ryan: They need to- best 20 bucks I spent man, because I’m telling you, like I said when I first started, that was the thing that was holding me back and I think that’s what holds so many people back is like, where do I get the money?
And like, I mean, credit to you man, because if I didn’t read that book, it’s like I really don’t know where I’m at today. So thank you.

Brandon: Well, thank you. That’s super, super nice.

David: Hate to interrupt you guys’ little love fest here but question, what is your favourite business book?

Ryan: Favourite business book? So, you know, as I was listening to all these podcasts all these years, I’ve thought about these questions and they, my answer always changes because it’s like I read a new book, I’m like, that’s my new favourite book. And so I’m like, man, what am I going to say? So, I’m not going to give a generic answer, but I’ll say I really enjoy reading books about other CEOs and things like that because like, systems and everything are great and there’s a ton of great books on, you know, how to delegate and all this stuff. But I want to know like what these guys went through to build up these huge billion dollar companies.

And so like, I recently read Jeff Bezos’ Book, Elon Musk’s book, but my favourite one was reading Phil Knight’s Shoe Dog. That’s definitely my favourite business book right now because I’m a big Nike Guy, you know, being an athlete and it’s like my second dream is to get a Nike deal somehow. Nike ever- If anyone works for Nike right now and they want to, you know, give me some gear and I’ll, you don’t even have to pay me, just, just give me a deal on paper. And that’s my dream.

Brandon: Gary Vaynerchuk now, who we had on the show a while back, he’s got to deal with like, I think, it’s case with or some, I don’t know the brands. But anyway, he’s got like, he got a shoe deal and they like actually get Gary V Brand shoe now.

So I’m thinking we should bring that into real estate. Like you guys were Ryan shoes or David Greene shoes.

Ryan: I don’t even need a shoe. Like just give me gear and I’m getting.

David: There you go. That’s a good point. You know, like it’s not just athletes that are, that have shoes, like Kanye West has shoes, like rappers are getting shoes. At what point is that going to stop? It’s like this is my favourite instagram follow and they have their own shoe and I can go and go by that.

Ryan: Like Kevin Hart, Iraq, they all got-Weird and hills and stuff.

So that’s my goal.

David: But we’re almost as big as the rock. So like pretty close. Yeah, we’re close. We’re close, definitely not 100 pounds. I’ll be there a ride. Alright, Ryan, what are some of your hobbies?

Ryan: Hobbies, man. So, I love playing basketball. I haven’t been playing in a while because I was busy writing the book, but, I love to at least play once a week in and now that I’m done playing baseball, I’ve been coaching high school baseball the last couple years and I just love being able to be at those guys and still be around the game and to give back and give these guys some knowledge and everything like that, you know, I serve a lot of stuff at my church, I lead a lot of men’s groups and missions and stuff. So yeah, between sports and faith and business, that takes up a lot of my time. And then, me and my wife like to travel a lot too.

Brandon: Cool. Love it, all good stuff. All right, my last question, what do you think separates successful real estate investors from those who give up, they fail or they just never get started?

Ryan: So, for me, the number one thing is discipline. People just don’t have the discipline to do the things they need to do. And so like, whether it’d be like, ‘hey, I’m going to start working out every morning’ you guys had a [Inaudible] [01:09:18] and I read his book a few years ago when you guys had them on the podcast, I was like, ‘Whoa, like this is cool.’ And it’s like, so I’ve committed myself everyday for the last two and a half years, three years to do one every miracle morning every day. And it really has changed my life. Like, in terms of just being disciplined to read, to work out, to do all the things he talks about.

And I see so many people and I tell them that I’m like, ‘Hey, go read a real estate book or something and then come talk to me’ or ‘Go read my book and then come talk to me’ and it doesn’t happen. And it’s like, how do you not have the discipline to do that? It doesn’t make sense. And then it could be with like, ‘Hey, you know, from this time slot I’m strictly going to go prospect leads’ or ‘I’m strictly going to for the next week I’m going to go meet one agent every single day, I’m going to take them out to coffee’, and just other things with discipline.

And really for me, I learned that as an athlete. Like, it takes extreme amounts of discipline to become a professional. You have to train every day, you got to eat, right? You got to practice, you got to be with coaches and mentors and you’ve got to be learning and you’ve got to just mental training. Like, so much discipline went into being an athlete that when I got into real estate, I was like, ‘dude, like normal people are succeeding in this. Like this is, this is like nobody has the type of discipline athletes have’ something like, ‘man, if I just apply this to real estate, who knows where it’ll take me.’  So, discipline is the number one thing I think people need to really start implementing.

Brandon: I love that answer. I don’t think it’d be [Inaudible] [01:10:51] discipline, at least not in a long, long time, but, that’s so true. I also, you made an interesting point there. I think like people, a lot of times, will ask me out to coffee in the [Inaudible] [01:11:01] My new rule is like, if you haven’t read one of my books, I’m not going to go to coffee because that means you might not be disciplined or listen to it or maybe they’re not a reader. Yeah, otherwise like I love that.

Ryan: Yeah. That’s why I wrote the book. It’s like, dude, do not ask me a question that’s already in the book and you could talk.

Brandon: Well, that’s wise?? It’s because the reason most people are asking us if they can talk to us or take us a coffee is they’re hoping we have that magic bullet that they’ve been missing and they don’t have to go do the work or be disciplined. They could just get it from us and then they’ll know what to go do and that is not how life works. Ryan would not be where he is if he didn’t go through the process of just striving for this goal of being a professional baseball player and the work he had to put into doing that with a very small chance just mathematically of succeeding like you didn’t, you didn’t hit that goal, but that sets you up to do even better in this goal, right. So, like you needed that process; that’s what made you successful and trying to skip out on that and tried the, the easy road or the shortcut never worked. You got to go through that process and build yourself up. So I think that’s exactly right. Like that’s what we should start saying. We should make a pack that like anyone who asks us for our time, it’s tell you know, tell me what, tell me three things you learned from the book that I just read. And if they can’t answer right away, just like, yeah, you need a book, you don’t need a coffee. So, speaking of the book, tell us about the book and you know, David, you want to ask the last question?

David: No, you started it

Brandon: Alright, speaking of the book, where can people get it? What is it about and then tell us more about where they can connect with you at.

Ryan: Okay, so the book is called ‘Flip Your Future.’ I just released it a couple weeks ago and unfortunately it’s already sold out on Amazon, which is like a good thing but also a bad thing. I’m like, ‘Man, like what are you guys not like prepare for this?’ And they’re like, ‘Oh, you’re a new author, like, we don’t know how many to stock.’ And I’m like, ‘Obviously, people want it.’

Brandon: If it makes you feel good, that happens to us on every book that we come out with BiggerPockets, every time. Amazon doesn’t play enough within the first, like 20 minutes it’s like, oh, it’s gone. Sorry. It’s going to be a week. It just doesn’t come out for a few weeks from now. So, it might be back in way, in the stock.

Ryan: So yeah, you can pick it on Amazon and it’s really just takes you every aspect of flipping that we talked about, you know, that’s allowed me to scale to where I am, you know, talking about how to find money, how to find deals, how to network, have relationships, how to manage contractors, estimate repairs. Like I really tried to just make it as simple as possible, like it should really take about three hours to read the whole book and I just kind of took all the fluff out of there and it’s like, hey, here’s all the information you need. Like don’t worry about all the other stuff because people get caught in the details too much. Like they want to know every single little thing and it’s like, no, you just need like the big picture of it. And if you do those you’ll be, you know, you could do it. So yeah, that’s why I wrote it. It’s on Amazon.

If you want to connect with me, I’m very active on social media, so if you go to ryanpinada.com, it has a link to all my social media profiles. It has a link to the book, you know, all this stuff that I’ve got going on, so that’s the easiest way to find me, it’s there.

Brandon: Perfect. Perfect. Alright dude. Well this is a lot of fun. This is one of the most fun I’ve had on a podcast and a long time. Uh, I mean, I love every episode we do, but I don’t know.

Ryan: You’re not just saying that, right?

Brandon: No, I’m just saying that this was awesome, really enjoyed your story and you’re definitely somebody to be admired, so keep it up. Keep up the good work and hope to connect in the future.

Ryan: Awesome guys, I appreciate you having me, man. It’s been a dream come true to be on the podcast.

David: That’s awesome. We’ll thanks. See around.

Brandon: That’s what we do here.

Alright, now that was a show with Ryan Pineda. I really like that guy a lot. Like I really, it’s somebody I want to build a good relationship with myself because I’m like, man, I could learn a lot from him easily.

David: Yeah, those in it, don’t you just feel like, oh, the world isn’t so bad, right? And just such a positive duty makes you believe that you could do anything. I really enjoyed that.

Brandon: Yeah, me too. It’s funny because yeah, he got started largely from reading my stuff and now I’m like, well, he’s way outpaced me. I think he’s a, at least with that flipping stuff, he’s just crushing it. I’m like, ‘Hey, I want to be half the flipper he is.’

David: I believe in Yoda would say that you have accomplished the goal of every great teacher is when your student surpasses you yourself, so, great job.

Brandon: Just say like when Yoda, say like “Your, your students surpassed you. They have.” Yeah. So it would be said differently.

David: Teacher. Great. You are Brandon.

Brandon: Well thank you. Well we got to get out of here and you know, I’m heading, actually heading to lunch right now without BiggerPockets member who asked  wanting to hang out. And, and he came to me with a couple of deals and said, hey, I want to, I wanted to see if you’re interested in buying a couple deals that I’m putting together. That was a good way to make an introduction to me and anybody you’re trying to connect with. Offer value, like we talked about, the quick tip today, so build relationships, get out there, go crush it, and let us know if you’re enjoying this show, if you’re enjoying David or if you’re really can’t stand the guy, you know, let me know privately and secretly,

David: Or if you want me to completely supplant Brandon and never let him talk, you can say that.

Brandon: Yeah, you can say that.

David: We can just keep Brandon for his beard and his face and I can be here for all the content.

Brandon: That is true. All right, well let’s get out of here. We’ll see you guys over on social media or on the Webinar or wherever.

David: We’ll hope you guys enjoyed this show. This is David Greene for Brandon grand master Yoda Turner.

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