Rookie Podcast 63: Diverging From Corporate Life to Flip Houses Full-Time with Sean and Ann Wayne

Rookie Podcast 63: Diverging From Corporate Life to Flip Houses Full-Time with Sean and Ann Wayne

63 min read
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It’s hard to leave a comfortable job, especially when you’re working with family. What happens if you can’t make your entrepreneurial dreams work, what if you need health insurance, what about your bills? This is the predicament that Sean and Ann Wayne were in, only a couple short years ago. Thankfully, they made the jump, and now they’re flipping more than ever!

Sean and Ann left college with around $93,000 in debt, but were able to pay it off quickly due to their thrifty lifestyle and saver skills. After they had paid off their debt, they wondered where they could put their leftover money into. Sean stumbled upon BiggerPockets and knew that something within the realm of real estate was the best option.

Luck would have it that Sean and Ann’s landlord at the time was a flipper and a real estate agent. After some discussions, their landlord decided to mentor them through their first flip. If you’ve listened to this podcast long enough, you know what’s coming next. They were hooked! Sean knew he had to leave his corporate job to pursue flipping, even if it meant less stability.

Now this dynamic flipping duo has done 12 deals. Sean focuses on the rehab and Ann focuses on design. If you’ve wondered about what the best ways to paint and design your flip are, Ann drops some knowledge on what is worth risking, and what isn’t. Together, they’re an unstoppable team, and will definitely be on the Real Estate Podcast soon enough!

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Listen to the Podcast Here

Read the Transcript Here

Ashley:
This is Real Estate Rookie, show number 63. I don’t why. I told Sean we’re just so blessed with every house that we get, it’s like a canvas that I can paint on. My name’s Ashley Kehr and I’m here with Tony Robinson. Hey, Tony, how are you today?

Tony:
What’s up, Ash? I’m doing well. How are you doing?

Ashley:
Good. Anything new in the real estate investing world? What did you close on this week?

Tony:
That’s so funny. We actually did a close on a property a week and a half ago, and then we’ve got a couple more in the pipeline. We’ve got three under contract in Joshua Tree right now. We’re actually going to submit two offers today as well, which is exciting. Then we’ve got three more under contract in the Smoky Mountains. I don’t know how I have time in the day right now, like things are moving so fast. Lots of stuff going on. Actually, what’s super exciting is we just got our first wholesale deal under contract as well.

Ashley:
Awesome.

Tony:
We’ve been working on wholesaling out here in California, so we’ve got our first year. We got the buyer or we have the seller under contract, we’ve just got the buyer signed so we’re closing in two weeks on that one also.

Ashley:
We’ve talked about that in the beginning of the year when we did goal setting. I remember you saying like wholesaling, you want to get into that. That’s great. It’s not even the middle of February yet, and you’ve already got your first one done.

Tony:
It’s so funny because I think I mentioned before, I don’t think I would be good at wholesaling, but I partnered with someone who I think would be. I’m doing this with my brother-in-law and he’s definitely more of the got to let the sales person, but in a really positive way, so he’s making that piece work. But what’s so funny, Ashley, is the very first batch of mailers that we sent out, it was the very first phone call that came back that we got under contract. I feel like you never hear that. It’s just like you need months and months, but for us it’s like the very first deal and we’re going to turn a decent profit on it. So we’re excited about it.

Ashley:
How many mailers did you guys send out and then how many calls did you actually get altogether so far?

Tony:
We sent out the first batch and it was just a little under 600 mailers. I think it was like 598. We got two phone calls. We went out to both of those properties and then we submitted an offer on one and we got it accepted.

Ashley:
Awesome, great. I feel like we have to do another wholesaling episode. We haven’t done one in a while and really deep dive into direct marketing and different ways to do that.

Tony:
It’s exciting because it’s big chunks of cash and it’s more transactional, there’s no tenants involved, so it’s a different very feel of real estate investing. But, yeah, we definitely need to get some more wholesalers on here.

Ashley:
Yeah, and build more capital to buy your rental properties, your short-term rentals. I’m in the same boat with you where if I did it, I know someone who would be perfect as the face of it and actually go and like talk to the people and negotiate and stuff. But the problem is we live in different markets, so it’s like, “Okay, do we target both markets? Do we do his market? Because he’s like the boots on the ground, or we batch appointment so [inaudible 00:03:00], meet the people. But also I would be the one that would know estimating the rehab better than he would, so it’d almost be like we’d be a better team together on the ground. I know, it’s something I’ve been thinking about too, but lots of logistics. But I like to be the one behind the computer and I’ll handle the direct mail, sending all that out. But then this person actually answering the phone calls that make the appointments, that’s where the partner comes in.

Tony:
So you and I would be horrible partners for wholesale dealers because we both would be-

Ashley:
Right.

Tony:
Well, today’s episode has like nothing to do with wholesaling, but a really good episode, nonetheless. So we’ve got a husband and wife team, Ann and Sean, and they’ve done, I think, 11 or 12 deals in the last two years. Almost all flips and they talk a lot about how they’re using hard money, how they’re finding their deals. They picked up and moved their family to this location because they wanted to live and invest there. Lots of really good things they shared during this episode.

Ashley:
Yeah, and aside from real estate investing, they talk about that Sean had the opportunity to take over a family business and declined that to actually go into flipping full-time and they talk about, “Okay, now they’ve both left their full-time jobs. How do you get health insurance?” That’s like a big question that either it weighs heavy on people, what are you going to do, especially, if you have a family or it’s something you haven’t even thought about like, “Oh, yeah. What happens when I leave my W-2? What happens to health insurance?” I really loved that, that piece of advice, and then they talk about being on the Dave Ramsey path. How they paid off $93,000 in student loans, which really helped them once they get rid of that accelerate their flipping business.

Tony:
Sean, Ann, welcome to the show. Super excited to have you guys on this morning.

Sean:
Thank you for having us.

Ann:
Thanks for having us.

Tony:
I can tell, man, you guys had any busting up before we started recording, so I’m expecting for nonstop laughs this whole interview.

Ann:
It’s the Wayne way.

Tony:
There you go. We’ll get into your real estate story, I guess just give us the background? What has your journey been so far and where are you guys at today?

Sean:
Right now, we’re just counting up this morning, we’re trying to iron out what we’ve done so far. We’re on deal 11 or 12 right now is what we’re just about to start. But we started our journey in 2018. I was working full-time, my dad’s an entrepreneur, has a company of about 350 employees. I came straight out of school, working for them, great place. But on the side, I started fumbling around with this financial freedom idea and bumbled into BiggerPockets. After a year of BiggerPockets, I was like completely sold. The corporate world is it’s a beautiful thing, it’s awesome. But what I saw was an incredible amount of time that you had to put in, in chasing the dollar. Like that 9:00 to 5:00 exchanging time for money and in our deployments, “Okay, we want more time to be together, more time for our families. We want financial freedom.”
When we first came out of school, we had $93,000 in student loans at like 6%, so we knew what it felt like to be under that load of just debt and we hated it. And that really drove us to, one, figure out a strategy to manage our money, to pay that off. Then once we got through that we said, “Hey, now we have this extra money that we’ve been used to living without. Let’s just start saving it, and hopefully we can get enough together where we can buy some real estate.” Our very first deal, it was providential and a lot of fun at the same time. Our landlord, about two years into our marriage, when we first met her, she had mentioned that she was a realtor. As we got to know her, we’re like six or eight months into leasing.
Somewhere we developed a good relationship with her. She starts talking about one day we’re outside or whatnot, she goes, “Yeah, I’m going to buy this house and I’m going to flip it.” My eyes just go like boom because I’ve been listening to BiggerPockets, they’re talking about networking, they’re talking about mentors, all of these things.

Tony:
You’re like, “This is it. This is my chance, right? This is the moment.”

Sean:
I was like, “Oh my gosh.” I was like a child. I was holding myself back or whatever. I went inside and was like, “Oh my gosh. But I played it cool, I played it cool. Because what I was trying to figure out when you hear about the mentor, the challenge of saying like, “Okay, I want you to be a mentor.” A lot of times that comes across as like, “Hey, can you just help me do this for free?” You hear Brandon and David and you guys talk about that stuff all the time. It’s like, “What can I bring to the table? Is there something I can do?” I started racking my brain. About three weeks later, I was at the gym. It was about 6:30 in the morning and this has just been on my mind.
My landlord was an early… she’s an early bird, I knew she was awake already, and I decided to shoot her a text at like 6:20 in the morning. I said, “Hey, would you be open to mentoring Ann and I through flip and we can work out, like you can be our realtor on both ends. We’ll come out with some kind of way where you make profound as well. But we love you, we’ve seen what you’ve done, what kind of person you are. We want to get into this.” She texted me back, I’m like in the work, I’m looking at my phone the whole time I was sitting there just checking my phone and I got it. She texts probably like 7:15, she goes, “Let me think about it with a smiley face.”
I was just like, “Oh, yeah, there we go.” About 2:30 in the afternoon, I was at work. She called me and she said, “Hey,” she’s like, “I love you and Ann. I’ve gotten to know you over the past six or eight months. I’d be happy to do it. Let’s go.” That opened the doors to everything for us. We owe her a lot of praise. She spent so much time on us.

Ashley:
And were you always on board with the real estate investing and how did he bring you onto this?

Ann:
Around that same moment that he’s talking about when we purchased our first flip, he comes home, we’re in a rental home and we’re, painting the picture a little more, we’re 24, 25 years old and we have our first born at the time. Who’s little, he’s like one, and he says, “Babe,” he sits me down and he says, “I want to buy a house.” I get so excited, “Our first house, this is so exciting.” He said, “I want it to be a foreclosure.” “Okay, all right. Okay, I can get on board. I guess we’ll put some paint on it and we’ll make it home. It’ll be great.” He says, “Then we’re going to sell it again in three months.” I said, “Wait, hold up, hold up, hold up, back up. What are you talking about?”
So he then explained where, “I would like to flip this house. How do you feel about that? Laurie said that she’s thinking about it. Like can we somehow pull this together? Would you like to be involved? How involved do you want to be? Yada, yada, yada.” No, the answer to your question, Ashley, is no, absolutely not. I was not okay, “What are we doing? You want to buy a house for somebody else before we even have our own house?” No, it was terrifying at first. But, at that point, Sean and I had known each other for several years. We met in college freshman year, actually, and started dating-

Sean:
Ice cream social, ice cream social.

Ann:
Ice cream social. [crosstalk 00:09:56]-

Sean:
She threw a box of sprinkles at me and I said, “She’s the one, that one’s really fun.”

Tony:
There you go.

Ashley:
That was the magic love potion she was sprinkling on you.

Tony:
Wait, so for all the rookies that are listening, if you want to find your wife, just buy some sprinklers and throw them at your potential [crosstalk 00:10:15]-

Sean:
Yeah, just toss them on someone, any person on the street.

Ann:
I had no idea at the time what I was doing. No idea. No, I wasn’t on board at first, but I had, my point to that, was we’d known each other for a long time and I had known Sean and his character and I had known that he doesn’t do anything 110%. He doesn’t fail, to be honest. He does fail, but when he fails, he learns from those lessons and then therefore it’s no longer a failure, it actually builds him into a better man, businessman, whatever his goal is at the time. I told myself, “What’s the worst thing that could happen?” From that moment I jumped on board and I’m with Sean. I absolutely adored our landlord at the time, now she’s a really great friend of ours. But, at the time, I just adored her and I said, “If Laurie’s involved, then I’m in.”
It made that risk a little less risky because we knew we were in good hands and I knew I was in good hands with Sean. That was like the first door opening I think for me. I wasn’t madly in love with the process when it was over. We got our asking price, right, Sean, we got our asking price forward and so it was successful. I was very excited about that, but I wasn’t yet. I would say at that point I was like probably 80, 85% in, which is still big time. But I, personally, for my own self, I was like, “Okay, you can do this. This can be your thing. That’s where I was in the very beginning.”

Tony:
It started with the trust in your husband, which is what we hear a lot. I know, for me, that was what it was for me and my wife. She just trusted me, and she had faith and confidence in me to figure things out. I want to talk about your portfolio really quickly. You said that you guys have done 11 or 12 deals. Can you just give us an overview of what those deals were? Were they all flips? Were they wholesales? What do we have within those 11 or 12 deals?

Sean:
Yeah, we had to rent a property. We did that first flip, and after that, I was beat. Once we sold it, it was so much fun and I was just like, “Oh, man.” A week later I was back talking to our realtor and they’re like, “Hey, can we do this again? That was fun.” When I say fun, there’s caveats to that, it was really hard. We were working full-time, I was working full-time, 40 hours a week at work and then working 14 hours Saturday, Sundays, evenings, and all that stuff. But looking back at that finished product, we’re like, “This is awesome.” We immediately took that, probably, three months later and bought a duplex and it was running for like 800 bucks aside. I think our mortgage, everything altogether, taxes and insurance and whatnot was probably like 1100 bucks or something like that.
I immediately went in there, fixed it up a little bit, bumped up both sides of the rents to 900 each to just get that up a little bit. We held onto that one for about another year and a half. Post that property, we have one other rental property and then the other… what’s that if that’s 11? The other nine properties had all been flipped so far. There’s a reason for that because I wasn’t always like, “Oh, I just want to flip forever.” Especially, with for me, our personal goal of financial freedom, it’s like flipping still at some point, it’s like a job and we love it. It’s a job we love, which is great. But the reason we’re doing that is because we want to get to the point where we can have enough cash so that we can start buying rental properties and getting that residual.
The big thing we found in flipping is right now, for instance, we’re using hard money for all of our flips, and that’s a big chunk of change every single time that you go to closing. You’re like, “Man, that hurts.” What we’ve been focusing on is let’s just keep on flipping and flip our way out of hard money. Once we get to that place, then we’ll just start burring, just burr all day long. That’s our goal.

Tony:
So, Sean, you said that your dad had a big company, 350 employees. I think a lot of people would come out and they’d say, “Cool, let me join the family business.” What, I guess, pulled you away from that a little bit to say, “Hey, I want to go start my own thing on the side over here.”

Sean:
Two things, one was looking at financial freedom and saying that trading of time for money. Like I want to be able to do what I want with my time and not feel like I’m chasing the next position, the next zero at the end of my salary, just working, working, working, doing all that stuff. What I saw, so my grandfather, both of my grandpas were entrepreneurs, my dad was an entrepreneur, and my dad started that company in 1976 in a garage and now he’s grown it all that way. Really, really cool. I think I had part of that entrepreneurial spirit was just in me. There’s just that sitting part where I was like as an employee, it didn’t matter who I was working for or what I was doing, there was this itch in me, it was like, “I want to do my own thing.”
That was a big factor, finding financial freedom, that whole idea and wanting to chase it. Then when I looked at the corporate world and the big companies, it’s like, “Okay, as I rise up through this company, incredible, incredible opportunity. Incredible opportunity to make money, have a great salary, very stable. Like very stable future, potentially, if you’re able to do that.” What I loved about my family’s company as well was they made you work for it. Our rule and our saying between my dad and us was, “I don’t owe you a job and you don’t owe me your career.” When you earned your way in a company, you felt like you were creating your own cloud and the people around you.” That was a great thing. That was all there, but what I saw up ahead was, “Hey, if I ever want to have the chance to run this thing and move up there, it’s going to be more time, more money.”
I was traveling, in that last year when I was there, I was gone like two weeks every month. We were doing seminars, doing all this stuff. It was great, it was a lot of fun, but it was hard for Ann and I. Lifestyle wise, it wasn’t what we wanted. A combination of all those things in the real estate. Also at the same time is like building with us and we’re seeing it be successful and we’re like, “Hey, you know what, if we’re going to jump, this is the time.” If we’re going to stay with the company, the next couple of steps in the company are big steps, and there’s big commitments there. I want to make sure I’m signaling the right thing, especially, with my family. You’re going to step up into a big role, you don’t want to leave six months later or a year later. You want to make sure you’re committed, and that was important to me the way we did that. Yeah, long way of answering your question but-

Ann:
The Auburn FarmHouse was also the, I would say, the catalyst. THe Auburn flip house. When I say that, I mean when we moved from… We started out in Cleveland, that’s where our first flip was. They moved Sean back to his business for a different position in Auburn where he’s from, and we acquired this little, I’m talking, a little farmhouse and it was magical because I think… what was it, Sean, was your grandmother had her children in it, so-

Sean:
Yeah, my uncle was born in the house, actually, born in the house. I’m going to have family for like 100 years or something like that.

Ann:
It was in great shape in terms of it was livable, it had renters in it at the time, and it was given to us. But at the time we were thinking, “Okay, if this is going to be our home, let’s renovate this property to be something that we could see ourselves bringing kids into it living here for a long time. We renovated that top to bottom, and I mean to the studs, we had to rip out half the bottom of the house because there was black mold completely covering the bottom of the house mid project. It was a huge undertaking. We added, gosh, we have two bathrooms or just one, one bathroom upstairs.

Sean:
We moved the kitchen and the bath, literally, from one end of the house to the other end of the house. Just it was insane.

Tony:
It was a big project, and that’s what gave you guys the confidence to say, “Hey, we can actually do something like this on a regular basis.”

Sean:
Exactly, exactly.

Ann:
Oh my gosh, yeah, well not just the confidence, but I think at the end of it we sat back and most people would say, “Never again. This is great, but no thank you.” Sean and I looked at each other like, “Where’s the next one? We have to do it again.” It was invigorating, and not just that, but the end product was truly magical. I mean that with every fiber of my being, it’s wonderful because Sean’s sister lives in the house now. Sold back to the family and it’s magical that she’ll be able to, she just got married, she’ll be able to have her own kids in there. It staying in the family was just beautiful. But when we were done with it, we sat back and went, “We have a God-given gift. and I think we need to keep doing this.” Not only that, but it was that flame that was just blown in terms of the flipping and the designing and the love for it aspect.

Ashley:
I want to get into how you guys are financing these deals and what your systems and processes are? But, first, Sean, I want to go back to you. What advice do you have for rookie investors who want to leave that corporate world, they want to leave that job? What are some action items you did or what are the things you needed in order to quit your job?

Sean:
Yeah, so for me it was, one, emotional, and two, financial. I’ll start with the financial because that’s a lot easier, and then it’s straightforward. When we decided, “Hey, if we want to leave, we want to leave with some stability because it’s scary.” We went out as house flippers. So when you’re flipping houses, you might not get paid. If you’re flipping fast, it’s like 90 days, 120, could be six months. You need to have something built up so that you can span that amount of time. Ann and my goal was, “Hey, before we make this jump, we want to reach two financial goals. One, I want to have enough after tax money so that we can live for an entire year.
Just like push that away so that, “Hey, when we’re not making money, there’s going to be plenty of stress to go along with starting out full-time on your own.” You don’t need to be worrying about where the bread’s coming from for the first year? Let’s get that off the plate. We saved that up, put that away. Number two was, “Hey,” and we can get into this in our story, but we’re down here in Sandbridge, which is Southern Virginia Beach right now, which is like our dream place. We said, “Hey, we want to be in the Sandbridge, as close to Sandbridge Beach as we possibly can.” When we looked at the houses down there, we did our research and we knew that when we left the company, we were not going to be able to get a traditional mortgage anymore. They’re going to want, we’re going to need some co-signer, we’re going to have to put 20% down, we weren’t going to be able to do an FHA because they weren’t going to let us move.
Because when they check you on your mortgage, right before you close and say, “Hey, are you still working for them?” You can’t pull, you can’t do that stuff. Those were the two financial criteria, “Can we buy a house in the area we want to be in with the school districts and can we live for a year so we don’t have this incredible financial stress?” I think those are good benchmarks to help you in terms of looking at taking that jump. Also, it can be if you have a full-time job too. It’s like, “Okay, I’m going to buy a rental property,” and you guys talk about it all the time. It’s like, “Make sure you have enough put away for emergencies.” Things are going to happen, so I put that away, that’s financial peace. Financial peace is when you have enough money put away that something tragic happens and you can just handle it and you don’t have to go into this other place that’s really, really hard.
It doesn’t break you, it doesn’t break your business, or your family. The emotional side of it, I think is a lot harder, but I think what I say to some of my friends now who are either trying to get into real estate or thinking about it, they’re like, “How did you do it emotionally?” I’m like, “It’s just smoking, it’s like smoke and mirrors. Right before you push through those smoke and mirrors, you’re like, “This is the one.” Like going into a dark forest, you’re like, “I don’t know what’s going to happen. This is scary. Oh my gosh.” Then you just you take the step and you just you go, you close your eyes, you grit your teeth, and then you walk through and then you open your eyes and you’re like, “Oh my gosh, I’m flying. This is beautiful.”
Once you move past that emotional barrier, you start to believe in yourself and you start to be able to see all these other possibilities. You want that feeling more and more. That can start when you’re working for other people. When I was working and we did our first flip, that was the first time of me. I remember sitting in and we did a mobile closing for our first flip. I was in a coffee shop, I was shaking in my boots with this guy. I’d never bought a house, let alone a flip, it was scary. Now we’re signing closings and things like that, and we look at the HUDs for five minutes, “Yep, here we go.” So part of it, you guys talk about it a lot, but it’s like getting that first deal done takes care of so much emotional anxiety. Then, two, just make sure you’re in a good financial spot before you do something like that.

Ashley:
Yeah, and I think the fact that you stayed in your job while you did your first flip shows that it’s completely possible. You were working full-time and you were able to do the flip, and I think that some people get caught up and is like, “Okay, well, I just want to be a full-time investor. I’m going to quit my job and I’m going to do this.” But then there becomes so many obstacles because it is actually very easy to find the time to work on real estate. But what’s not easy is going to a bank and getting a loan. Then they say, “Well, you quit your job. We’re not going to give you a loan.” Overcoming those other obstacles or the stress of, “Okay, I quit my job. How am I going to feed my family? How am I going to pay my own mortgage this month?”
That just adds to the stress of actually becoming a real estate investor. If you can, I recommend working as long as you can until, like Sean said, you build that stability, you have your safety net, and just emotionally you’re prepared to ready to dive into it full-time. Let’s go into the fun part. How are you guys funding these deals for each of the flips? Are you using hard money lenders? Are you using savings? How does this work for you guys?

Sean:
Yeah, right now it’s hard money and you can jump in on this too, but I think it’s a fun story how we met our hard money lender. when we left, again, checking all the boxes, and actually I went a BiggerPockets. I went to BiggerPockets and said, “Okay, hard money lenders, who can I find?” Found like lending one, a couple of these other people. Big national chains, basically, and got approved from them. But what I’ve learned in business a lot of times is like local is so nice. A lot of times just local, there’s understandings, there’s not as many hoops. We got down here, I was looking for our first flip and I was walking our dog within the first week of us being down here. A rainy day, Ann’s like, “Go walk the dog. He hasn’t been walked in days.”
I was like, “All right, I’ll go walk the dogs.” It’s rainy, I’m not super excited about this walk. And walking through the neighborhood and I see a big dumpster in front of this house. I see people throwing trash in it and whatnot, I’m like, “Oh, I know what they’re doing.” I walk up to the door and knock on the door. A couple of the laborers come and I was like, “Hey, is the boss around?” Just introduce myself basically and I said, “Hey, I’m a fellow real estate investor. Just moved here to Virginia Beach.” When I first walked up, I was just thinking to myself like, “Hey, just chance to meet someone. To network, maybe he knows contract. You never know how these things are going to go.”
This guy came to the door, we chatted for a little bit, got talking, I said, “Are you flipping the house?” He said, “Yeah.” I said, “It looks like you’re doing a beautiful job.” He showed me around a little bit. I said, “Hey, do you know any local hard money lenders?” He looked at me for a minute, and in my heart I was like, “Come on, please, please?” He was sizing me up as if he’s like, “This is one of my contacts. Am I going to give it to you?” He said, at the end he’s like, “Yeah, I got somebody for you.” I was like, “Great.” He texted me a couple of days later. I called the contact that he gave me. What I found out a couple months later is this contact that he gave me, this guy is flipping… this hard money lender is not just a hard money lender.
He flips like 40 houses a year in Virginia Beach with his crews, and then he funds another third. He’s a big fish. He’s rocking and rolling, awesome guy. But I called him up, I said, “Hey, my name’s Sean. I just moved here. We’ve only done three or four deals, but we’re jumping into this full-time, like would you be interested in helping us out?” As simple as that, he was like, “Yeah,” he’ll send me a deal. Then, boom, seven deals later.

Tony:
Sean, let’s pause for a second because I don’t want this to get lost on listeners. But you did something that I think a lot of people will be afraid to do, or that they wouldn’t be comfortable to do. You walked on to some random stranger’s home and said, “Hey, can you please…” And you introduced yourself, but look where it led you. But I think the point that the listeners need to take away from that is you should always be talking about what it is that you’re doing because you never know where those conversations can lead you. Had you not have the courage to walk into that house and just introduce yourself and spark up that conversation, maybe you wouldn’t have found that hard money lender.
It’s when the opportunity presents itself, you have to be smart enough to identify that opportunity, but then you also have to be courageous enough to act on it. The fact that you did that, I just wanted to make sure we pause so that the listeners really let that sink in for a second.

Ann:
One of Sean’s biggest strengths within the businesses is his ability and lack of fear and networking. It’s unbelievable. I remember, he’s funny with me when it comes to like ordering pizza, he’s like, “Here’s the phone, order pizza.” I’m like, “I don’t want to talk to them. I don’t want to talk to them. You are amazing.” The joke is that he isn’t afraid to talk to anybody, “Give me the phone, I’ll order the pizza.” It’s he’s not afraid to talk to anybody. He will tell the guy bagging our groceries at the grocery store, “Oh, we are looking for houses or wholesalers or whoever,” or, another testament to that is the house that we just closed on our most recent one, our landscaper and Sean were talking.
He was like, “You know what, I have a house that I’ve been wanting to sell.” Long story short, we have his house now and the numbers worked out and it’s going to be a great deal for us. That’s Sean, that’s his personality and his gift and it’s beautiful. I’m glad that he has that side of it because I love people, but he’s fearless really.

Tony:
Just break it down for the listeners, just give me your 30-second spiel? Like what did you say when you walked into that house? Do you just say, “Hey, my name’s Sean, can you help me?” What is that initial opening dialogue look like?

Sean:
In that particular one, and I can get into a more general because I hear what you’re saying, in that particular one, I also had my home inspector license and had just moved here. I came at it from the home inspector aspect as well. But I think it goes back to the same principle that we’re talking about in the beginning is like is there something that I can offer? In that situation for me, it was, “Hey, nice to meet you. I flip houses as well. Hey, I’m a home inspector. If you ever need like pre…” What we were taught by our mentor that was very helpful was to do pre-inspections before listing your property so that you don’t have anything pop up on you. I talked to him about that from a sales standpoint and talked.
As we got through that, and once I felt that he was open to the conversation, I said, “Hey, we’re new here.” Just being genuine, and just like, “Hey, we’re new here. Any chance that you know someone like this?” I wasn’t asking him to come fix my house or give me his money. I’ve heard Brandon and the BP podcast talk about this a lot of times too, and you just said it as well, it’s like when you’re just talking about your intentions and your dreams and your journals, things come out. You don’t have to be as direct, it’s like, “Hey, do you want to give me money?” It’s like, “Hey, do you know anyone that might be able to give me money? Do you know anyone that would be helpful with this?”
It’s not putting the onus on them directly. They might be that person and they might think to themselves, “Yeah, I would actually be interested,” or maybe they’ll pass it off. That’s the stuff that I’ve done, and I appreciate you being super affirming there. That was very nice, all these things you’re saying. I don’t think I’m going to… But I think one thing that helped me overcoming the fear was practicing getting out of my comfort zone. I don’t know if I gave a perfect spiel there of the lock and load what to say. But I think a lot of it is just not having the fear and being comfortable.
People are people, just be genuine, ask questions. I was really fortunate to do like a missionary year where I knocked on doors for like an entire year. That’s a totally different world, so that really beat the fear out of me. You got a lot of shutdowns that way, and it’s the same thing with sales. It’s just practice, I think, practice and being comfortable.

Ashley:
We learned a little bit about a side of your responsibility, Sean, that’s the face-to-face, the talking to people. What other responsibilities do you guys have divvied up between yourselves? What are your roles in your business?

Ann:
Sean is at the projects every day. Sometimes he comes home late, over eight hours a day. That’s probably the biggest role right now, he’s I call him the money man, he’s the money hunter. I was terrible at math, still I’m terrible at math, but I’m working on it. But he does all of that financial side, the budgeting side, all of that. He’s taught me so much and I’ve grown so much through that. Even in my own personal budgeting and financing he’s taught me that. We’re fortunate that my dad he was like basically a professional painter since he can remember. He was born in Guatemala, came over when he was about four or five and him and his brothers just painted from 10 years old to even now.
His oldest brother has his own painting company now. So he would come over and he would help us, and he would sit down with Sean. But through that, my dad learned everything about flipping houses, basically. He’s done in Northern Virginia where my parents live, he’s basically flipped their house from tiling to putting in wood floors, to dry walling and framing. He would come up for our first couple of flips and say, “All right, Sean, sit on this bucket and watch me tile.” After a couple cuts, Sean would say-

Sean:
And a couple of beers, a couple cuts and a couple beers.

Ann:
[inaudible 00:31:07] had been consumed in some of these homes. He’s there just working with his hands full-time, I would say, right Sean? Just that’s like your day to day?

Sean:
I have had straight up breakdowns on projects as I was trying to do something. We call it your first time of doing something. The first time that I tried to learn drywall and to do that properly, we were doing our own house. We were doing like a live and flip, and we thought we were ready to go, whatever. We started breaking down walls and there’s stuff everywhere. The kids are running around and we’re like, “This is a terrible idea.” The kids leave and then I’m left here to do the project and just learning, “Okay. I got to learn how to do electrical plumbing. It can be overwhelming, but thankfully in our situation I had her dad to teach me how to dry wall, teach me all those things.
The reason that I’m working on the projects full-time right now is over the course of our first year in business, I was working on the projects but I was subbing out a lot of things. The market’s so hot right now, not just for flipping or buying houses, but also specifically for contractors. There’s just lines at Lowe’s, there’s lines at Home Depot. Our local Lowe’s is having the best year they’ve ever had, even through the pandemic. My subs were canceling on me, dropping out, and I was getting super frustrated. Because they knew they like, especially as a flipper, like you’re trying to get very good deals for your contracting and they know the great money for them a lot of times can be in residents.
It’s just as residential people saying, “Hey, come do my floors, come do my backsplash, my shower.” When that happened over the course of the first year, I said, “You know what, I want to start bringing this in-house.” Now we’ve got three guys that work for us at the project, then I have an admin assistant on the side. At least, for now, we’ve focused on until we can get out of hard money, I need to be focused on actually working. I used to tell him about everything that you do. It is great about talking about how awesome other people are, and literally with her design stuff, she’s the one that sells the house. That’s what I say. Like we do the work, but the things that people show, stop, and give you cash offers or give you our offers in four hours, yeah, it’s the market, but our house is fly and that is a tribute to Ann. I want to make sure that she gets some props too.

Ashley:
Yeah, let’s hear about that, Ann, how you decide on the design and how that whole process works for you?

Ann:
I like to say I’m a play secretary. I’m a stay-at-home mom, but I’m basically a secretary. I’ve been really loving it. I step behind a computer and I do all of the ordering. Whatever makes the boy’s life easier. If Sean just has to pull up with the truck and they load the tile, they load the flooring. I do all the purchasing and all the design choices so that Sean doesn’t have to think about that. We get lots of questions, I get lots of questions about how I make those decisions and why I will choose to go above and beyond, or maybe spend a little bit more in this area versus that area. It’s a really great question and I think something that’s really important for listeners to hear is we have found, it was risky at first, but I have found that sometimes to splurge in little areas of a flip house can, like Sean said, really at the end of the day, sell the house.
For example, what I’ve fine tooth combed into where we’re at now is I have this three risk design role where I will choose three different areas of design within the home that I’m going to “take a risk”. So something that isn’t neutral. People ask all the time time like, “Oh my goodness, your houses are not beige and gray and have your classic shower kits or your laminate countertops. It’s got character, your tile choices are mosaics and your cabinets are green. Why did you choose that?” Like I said, I’ll basically tell myself on each project I have three different places that I can really take a risk. I think, it’s safe to say, that we’ve been pretty successful with our houses. We have a short little story for our last house that we’re, hopefully, we’re closing right now, hopefully, closing soon. Got an offer, accepted the offer. The realtor on their end called Sean and said, “I just want to let you know…” Actually, this was a totally different realtor.

Sean:
Yeah, it was a different realtor.

Ann:
She had reached out to you and said, “Hi, can I show my client?” Sean said, “No, actually, we just accepted an offer. You can go see it, but we just accepted an offer, just so you know.” She said, “Okay, I’ll go check it out.” She walked in about half an hour later, gave Sean a call and said, “I just want to let you know that I’ve been a realtor in this area for X amount of years and I’ve never seen a flip house like this before. Something that is quality, but not only that, it’s full of character and something that I think my clients would just go gaga over. It’s not beige and cut and dry, it’s full of life.” For me, personally, another reason that I choose to do that is once we jumped in full-time and I said, “Okay, this is our business. Let’s do this together.”
I really think that I’m starting to be compassionate about this, especially, after we did that Auburn flip house. I said, “What I want to do is create a business, but also create art in something that we’re proud of. I want to have a portfolio that’s beautiful, that really is beautiful. But also, at the same time, I think my goal, actually, I know my goal is to create flip houses that are full of life and character. But, at the same time, profitable, obviously, for our family business. I’m learning so much about the different places I can get budget tile and the different areas that we can save money, and the sweat equity right now is huge for us, obviously. I don’t know, I tell Sean we’re just so blessed with every house that we get. It’s like a canvas that I can paint on.

Sean:
If I can jump in there for a second, one of the things too, like she does all that, but Ann’s also 32 weeks pregnant right now, and she’s out in the garage, like at our last project, refinishing vanities. Ann used to flip furniture, and you should see her out there, she’s got her belly band on, it’s so funny. Y’all should see it.

Ann:
I look beautiful.

Sean:
You look gorgeous, it’s my favorite, Ann. She’ll be on the garage, like for this last project, it’s been resourceful but, like she just said, it’s like, “Okay, spend the $6 a square foot tile in the little bathroom that pops.” I think you hear that on BP a lot, but it’s true wisdom. I think you can’t say those things enough because there’s other areas where you’re going to need to be smart with your budget and take those opportunities to make them pop. You don’t need to do the big 24 by 24 brown tiles from the floor to the walls. It’s just like, “Come on, you can take some of that stuff.”

Ann:
Maybe your spread was big and you would “make a lot of money” but the house isn’t selling. So guess what? You haven’t made anything if you can’t sell that house. I would rather “lose a little bit of money” and no “that this house is going to go” because it is full of life and character. To create something that people don’t see every day, there’s going to be a match. There is going to be a match for that person, so that’s my philosophy.

Sean:
I would personally rather have the money and the nice house.

Tony:
There you go. Ann, one follow-up question for you. In my investing career, we have a big portion of our portfolio, the short-term rentals. Obviously, the design is super important to short-term rental. I don’t do any of the design because I’m terrible at it. But it seems like you’ve really got this figured out. For the rookies that are going into their first flip, they’ve never really designed a space before, what are maybe some resources that you can recommend or where should they start to identify how to set this space up?

Ann:
The number one place I think that I go to is just gather inspiration is are magazines, obviously, but Pinterest is probably the number one. It’s so easy, you just type anything what you’re looking for into the search engine. All white kitchen or white kitchen mosaic for tile. It’s very easy to hit something in a search engine and then tons of inspiration comes up. Everybody’s heard the saying that copying, what is it, copying someone is the best form of flattery.

Sean:
Yeah, imitation is the best form of flattery.

Ann:
Imitation is the best form of flattery. Well, to be honest, I will open up magazines that I see in a grocery store, or I will go on Pinterest, or honestly, following a lot of people, a lot of flippers on social media, Instagram, Facebook, and seeing a space that I love. If it sticks out to me, I will always save it and then I study it. I’ll say, “What stuck out to me about this kitchen?” It was, “Oh, that the cabinets were white. That’s affordable, we can do that. But this tile was this.” Or they had these open shelves that were rustic wood that just had a lot of character in it. I think people were loving that right now. Studying like people that you follow, other flippers designers on social media, Pinterest.
Then also, just like I said, doing the research, “What is trending?” I don’t like to get super stuck on that, like what’s trending right now because things go out of style. But I tend to like to stick to the classics. But, at the same time, if it’s working right now, it’s working right now. It’s definitely worth it to put it into a house if the jobs the rage right now. Doing the research, I would say in Pinterest and magazines and definitely other followers. I love going the social media route and other house flippers and seeing what they’re doing. I love that. I always will save or I’ll screenshot and send it to Sean and say, “Look at this house. What we just did. We’re doing this in the next project.”

Sean:
I’m sitting there like, “Please, no, I don’t want to do that.” Actually, you should have heard on this, she has been begging me. I’ve only been tiling for a year and a half, but tiling is my favorite thing to do. It’s fun, it’s artistic, but also it’s a rewarding construction thing to do. She’s been begging me, I think for like three or four projects, “But could you please do herringbone somewhere. Please do herringbone somewhere.” I’ve been like, “No, I’m not going to do it because it sounds too much.” Finally, this project, she was like, “Come on, can you do it?” I was like, “All right, there’s a small foyer.” I was like, “All right, let’s give it a whirl,” because that worked design-wise for her, but also work business wise for me.
I was like, “I can take the time to figure this out and try this out in this space, and it’s not going to cost me several days on the project with me and the guys. We’ll be able to get this done.” It’s the balance between the two. But she does a great job of that stuff. When she says research on Pinterest and Instagram, all that stuff, that’s like most of our evenings she’s over there doing that and I’m doing budgeting or whatever. Then sometimes I have to say like, “Hey, honey, I’m over here. I love you still, can we hang out?” But the thing with Ann is that she’s genuinely researching like how to find something great, but also to do it on a budget. And that’s what I appreciate about Ann so much.
We call it our light game, Ann spends a ton of time checking out the lights because they’re a great pop. One of the things I think is a good little tidbit is we buy almost all of our lights and ceiling fans, all that stuff, we get them off of Amazon. They have great choices. The return policies are great, and the pricings are good. If you’re going to Lowe’s, Home Depot, Target, even places like is it Overstock or Wayfair, some of the places, there’s a premium for those kinds of places. But Amazon has that power and they have a lot of selection, and we’re able to get a lot of unique light fixtures that you don’t see in a flip. Our light fixture budget for a whole house is like less than $1000. Could we save like $300 if we just got just flush mounts everywhere, this, that, and the other thing? Sure, but for 300 bucks, these make a big difference. She’s very good at making those kinds of decisions and choices.

Ann:
The buyers will walk in and our house will stick out to them, obviously, more than the 10 other houses that they saw, “Oh, honey, you remember the one with that dining room light? That’s the one.” It helps, like Sean said, it really does help with resell a ton.

Ashley:
Well, we’ve talked a lot about the design and the construction and getting out of your W-2 job, but let’s really break down the deal. I want to hear the numbers and everything. I’m just going to ask you guys a couple of quick questions and then we’ll really get into the story of this property. Which one did you guys want to talk about today?

Sean:
We call it Rick’s Condos, it’s the name of the property.

Tony:
Rick’s Condos.

Ashley:
Okay, and what market is it in?

Sean:
That is in Virginia Beach.

Ashley:
Okay, and it’s a condo? Is that the building type?

Sean:
It’s a condo, yeah, it’s a condo.

Ann:
I just want to add too that this one’s really important because Rick was our elderly gentleman neighbor who sold us that condo, and he passed away from COVID-19 I think last week.

Ashley:
Oh, wow.

Sean:
About four weeks ago, incredible man. Navy veteran, incredible man. Yeah, keep him in your prayers. He was a great, a great Navy veteran.

Ann:
This one’s very special to us because of him and his passing. Yeah, go ahead.

Sean:
Yeah, for sure.

Ashley:
Yeah, well, I’m excited to hear more about it. My last quick question is just what was the purchase price on this and what strategy are you using? Is it going to be a buy-and-hold, another flip?

Sean:
This is actually one that we’ve already gone through and sold. We’ve purchased it for, I think, $79,500 is what we bought it for and we sold it for 155,000, I believe, 155. We put about, I think, $22,000 into the deal.

Ashley:
What do you think that would have been if you hired everything out? What would have been the cost difference in that 22,000?

Sean:
Actually, funny story, I was doing my first time in doing two flips at the same time and I was trying to outsource that entire project. I had, all of a sudden, that’s when all the subcontractors had dropped on me because they had other things. I had two subcontractors text me on a Saturday and I had to shuffle my whole schedule and get back to this house. But to answer the question, without doing a lot of the work with me and my guys, I think you’re probably more on that project, closer to 35. We did that project in five, we flipped it in five weeks, that project. So five weeks there every day, but I would have to figure you’re somewhere between getting up to 35 plus with paying regular stuff. Depending on what subcontractor relationships you have.

Ashley:
Yeah, so you still would have made a profit on this property?

Sean:
Yeah, and that was the goal for us, and I think that would be… If I think what I had budgeted was something closer to 30, just with the subcontractors that I had, I thought we were still going to be able to pull it off close to that. But once we brought it in-house, we made a couple of… we put quartz countertops in that one and just some fun things as well because we had the time and the availability then.

Ann:
The stripe shower, that was fun.

Sean:
Oh, yeah, that was really fun.

Ashley:
How did you guys find this deal and how did you fund it?

Sean:
This was, again, our neighbor that we alluded to earlier. When we first moved here, I walked across the lawn. Just introduced, “This is me.” I guess, be me again, but I walked across the lawn and just introduced myself to old school. My family just taught me, like, “That’s what you do. You do that, you send your Christmas cards and do that stuff.” I walked across the lawn, introduced myself. His name was Rick, really, really great guy. It was about Halloween and I was at the house here, our home, flipping it by myself and the kids were up in Northern Virginia. So him and I were hanging out in the evenings, just sitting on his porch. It’s just great to hang out with old guys sometimes, they’re in no rush.

Ashley:
The good stories?

Sean:
Yeah, the good stories. Telling me how he met his wife out in Hawaii when he was on a ship, really cool. So about three months later, and through that share, “Hey, we’re house flippers. This is what we’re doing. We’re starting this full-time.” About three months later, he came over and said, “Hey, you know what, Sean, I have a condo. I’ve had it for about 25 years and I’m thinking about getting rid of it. I’m thinking I’m going to sell my actual house. I think I’m going to move into some kind of assisted living. Just I want to be able to take some of these things off of my plate. Would you be interested?” Obviously, I was like, “Yeah, absolutely, Rick. I would love that opportunity.”
One of the important things with that was… so I went back, I looked at the numbers, I realized how hot the market was and said, “Look, I don’t want to lose the opportunity to get this deal. I’m not going to try and just low…” One, I don’t want to low ball him out of respect. But, two, the market’s very hot and if he chooses to go to the market, I think he can get X amount of dollars. I put together just how I would any other deal, our regular profit goals, and I went back and made him the offer. I’m sitting there anxiously waiting, and in the meantime, I’m looking for another deal, and my realtor found us one. I went and looked at the property. I had the offer packet in my truck. She brought it to the property to sign. I said, “You know, I just want to think about it.” It was a big rehab. It was like 40, for us, a big rehab, it was like $50,000 rehab.
Made me a little antsy, it was a little tight on the profits. I’m driving home, and I’m just like it just, I don’t know, it doesn’t feel right. As I’m pulling in our street, I gave her call and said, “You know what, I’m going to pass. Something doesn’t feel right, the numbers are really tight, I just feel anxious about it. I’m going to pass.” Hang up the phone, turn into our street, and I see, as I’m pulling in the driveway, Rick is walking across the lawn with a stack of papers in his hands. I get out of the truck and he goes, “Hey, I’d like to do the deal.” Boom, and he handed it to us and then we went and rolled. It was really cool. It was a great blessing that he gave us the property, and yeah, it was really awesome. Very providential experience for sure.

Tony:
It was back to your superpower, Sean, of just being able to connect with people. We laugh about it because it’s funny that you have that. But it’s such an important thing in real estate investing to be able to do that. Now you talk to us about the actual rehab. You said it lasted five weeks. What about the post-close experience? How long was it on the market for? Do you guys have any issues selling it? Talk to us about that experience?

Sean:
That one was great. I think we put it on the market. I think we let it sit for a little bit because this was about the time like where the bidding Wars were starting to go crazy. You’re getting offers within hours, but you have a decision then to be like, “Okay, well, I got it above price offer, but I wonder what another 24 hours would do?” That’s the way we had looked at this one. Within the first, I think, 24 hours, I think we had three or four offers and we can, we can break down into those two because there are definitely some decisions to be made when looking at different offers.
But someone came to us and said, “Hey, I have a conventional 20% down. I’ll give you asking price. No contingencies and we can close in three weeks.” Unlike Upstate New York, Ashley, where it takes forever to close in houses, you can just lock and load down here, which is great. We took that offer, and that was it. It was done. It was very, very, very easy, so it was a great deal for us.

Tony:
Can we pause on that really briefly. You said that was there an offer that was higher than that one, but you guys chose that one because of the… Can you walk listeners through what the other offers were? Why you went with the offer that you went with? I think this is more so illustrative because, as a potential investor, these are some of the things you can put in your offer to get the deal even if you’re not offering the most amount of money, so break it down for us.

Sean:
We’re down here in Norfolk, Virginia Beach area, which is the biggest Naval base in the world. So there’s a lot of military, so there’s a lot of VA loans. Then just in our current financial structure in the country, we have FHA is a big loan that a lot of home buyers will use. But they’re either 0% down for the VA or you have somewhere around that 3% mark for the FHA. When you’re looking at those compared to a conventional buyer, who’s putting down 10, 20-ish percent, when you look at those deals in front of you, even if they are offering you the same amount, you know the conventional guy has a little more cash and a little more financial stability to the effect that, “Hey…” There’s nothing wrong with that. We’ve sold deals, great deals with VA, with FHA loans, worked out wonderfully, all those things.
But when you have that opportunity in front of you, I’m more confident that the person putting 20% down and making maybe a larger earnest money deposit and saying, “Hey, I want no contingencies.” That person wants a house and they’re a strong buyer. The other guys, they still have to get their financials checked. Something could go wrong. If something on the project goes out of whack, like it doesn’t appraise, probably the 3% or 0% person, they’re probably more likely not to come out of pocket and pay the difference, if that’s what happens. The 20% person you know they’ve got some cash. That’s one thing to look at. This particular deal, we had the conventional one that we went with, with no contingencies. I think we had another offer for 10,000 over. But it was an FHA, they wanted us to put in…
We didn’t put a refrigerator in this project, so that’s a small little tidbit. If you do a great job on your flip, we put in new appliances sometimes, and if it’s not in the budget, we don’t always put a refrigerator in. Our first mentor taught us that, and you’re talking a couple of grand to put these in. For us, it’s something that saves. So we had decided not to put one in. That’s why I said, “I’ll give you 10 grand over. I do want a home inspection contingency and I do want you to put in a fridge.” For me looking at that, I was like, “Okay, that’s starting to make me a little bit nervous.” But, two, and very importantly is do you understand what your house is capable of appraising for?
Just because the market is super hot and people are making these crazy over the top bids, unless they’re doing cash or saying that they’re willing to pay the difference of what appraisal is versus what they’re offering, you as a seller can get hurt. He’s budgeting, he’s thrown out 165 because that’s a big carrot to me, I’m like, “Oh, 10 extra grand. This is great.” But we had done our market research on this condo. We knew that we were already pushing the appraisal via the value of that condo, and we were pushing it hard. The probability of an FHA or VA appraiser coming in and hitting it 10,000 more than we had already pushed it was very low.
And FHA and VA loan appraisers tend to be a little more strict than the conventional guys. Those two factors, I was like, “This house is not going to appraise for 165.” We’re not going to get that. Those were some of the deciding factors on that particular deal. There was a couple of other offers, but compared to that conventional one and all that work, we’re great.

Tony:
What did it end up appraising for?

Sean:
It had praise for… what did we put it up for? We got what we wanted.

Ann:
155, exactly. That’s what it appraised for too because they did the conventional loan and it was exactly that.

Sean:
It was exactly that, and we were probably like when we looked at it with our realtor, and I’m real conservative with that stuff. I’m willing to push it, but it’s got to be somewhere in the ballpark because you can get hurt really fast. I think actually now that we’ve been taught, I think it was 159 is what we put it up for. It’s a small condo, it raised the value of all those condos in that place. It was one of those kinds of deals. Like you’re the leader and the leader sometimes wins and the leader sometimes loses, but we won on that one.

Ashley:
I think that is such a great advice as to, yes, this offer looks great because it’s more, but you’re right. Looking at the appraisal side of things, is that person that’s putting in the software going to bring that extra money to the table if needed? I think that’s really great advice comparing. I’m glad we went through this as doing that example of comparing these different offers and what you have to look for and what you should avoid. So thank you for sharing that with us. Tony, is there anything else you wanted to ask about this deal before we move on to the mindset segment?

Tony:
I think we should just highlight the profit. Just run us through the numbers really quickly. You guys bought it for 79, you put another 22 into it, you sold it for 55. I can’t do math in my head that fast, so what does that profit breakout to?

Sean:
Yeah, I just got my calculator out too. I’m trying to remember. I believe we made about $42,000 on that deal and that was using hard money. That’s one of our goals. If we weren’t using hard money on that deal, another $9,000 in profit on that particular deal. Something around there I think is what we paid. We made 42. One other thing to point out on that particular deal is I did a limited listing agreement. When you go on the sale side, and you have a realtor list the property, they’re typically… The buyer, the seller always pays the realtor fee. The buyers always want their 3%, and then depending on what your relationship is as a seller with your realtor, a lot of flippers have deals with their realtor. It’s, “Hey, it’s more like 2%, 1%, a percent and a half.”
Well, this particular deal, because I had found it on my own, I decided, “You know what, I’m going to try my hand at listing myself.” I paid $750 to get that listed on the MLS, and that saved us a few, an extra two, three grand or something like that. Another thing to consider for listeners out there.

Ashley:
Let’s move on to our mindset segment, and this is the rookie rear view. Like looking back, how has your mindset shifted during this time, during this whole process? What advice do you have for rookie listeners on your mindset?

Ann:
Sure, we might have two different answers. Let’s see.

Ashley:
Yeah, well, let’s hear from both of you on it.

Ann:
For me, especially, since I was the partner that wasn’t onboard in the beginning, I think if, for me personally, I don’t speak for everybody, I think for some couples, it would have worked out. To say, “This is your thing. This can be your side hustle, this can be your fun thing on the weekends or your thing, and then not get involved with it.” For some people that works great because maybe she’s into something else that’s her own thing, and then he can be a part of his own thing. For us, the magic happens when we do things together. I think when I first, looking back when I took that leap and said, “Okay, not only can we, yes, get into this business full-time but I would like a role in this so that I can be a part of this.”
And that I also can feel like I’m contributing to our family. At that time, I didn’t know how much I would love this industry in this business. It was part of that trusting my spouse, but it was also knowing us as a couple and knowing us as a team and staying separate, “We’re fine. We’re great even.” But together we work so well, and communication is something that we continue to work on. But even like from the beginning, it’s our number one just thing that we work on. Our marriage and life, it’s always growing. But through working together and through being just business partners together, it has bonded us, and I have grown so much. I mentioned that before with the money and numbers.
I’m not a math person, I’m way more on the artsy side of things, but I have grown so much in our own personal budget and just saving money in our own day-to-day and having kids and that kind of thing. I think looking back, it was that moment of, “Okay, yes, we can do this, but if we do this, we’re doing this together because I know our strengths.” Then once I decided to do that, now I’m just obsessed and I love it myself. That would be I guess my answer.

Tony:
You hear communication a lot from the husband and wife teams is something that really helps them be successful. It makes sense, right? Because if you guys are successful as a husband and wife, you will probably be successful as business partners, for the most part. I guess this question is more so for you, were there any big fears that you had walking into this that turned out to be totally untrue? You were really, really afraid that this thing was going to happen, but then as you stepped into it, you’re like, “Hey, that actually wasn’t that bad.”

Ann:
Other than starving, where we were not starving, so that’s good.

Tony:
That’s a good first step, right?

Ann:
I think in the beginning, and a lot of people ask me that, it’s one of my mom’s number one questions right now, is so what does the future look like? How are you going to pay for college? How about I get a ton of questions about insurance. That’s a really big one. How do you go, “Oh my gosh, you don’t work for a corporation. Who are you paying? How are you getting insurance? How are you going to the doctor? How are you having babies?”

Ashley:
Let’s touch on that real quick. What are you guys using for health insurance?

Ann:
Sean can talk a little bit about that because we’ve been on a journey, so hopefully we can help people not, I guess, make some of the mistakes that we hit on there.

Ashley:
Yeah, just touch on that briefly because that’s a great point, that is a huge topic. That’s a really hard thing. Even for myself, I’m basically a full-time investor, but I still work for my old investor very, very small amount of time each week just so he pays my health insurance for me. That’s like a big decision, that’s going to be a huge lump of money. We have to put out when eventually I don’t do that anymore. I’m very curious to hear about this.

Sean:
Yeah, absolutely, I can jump on that. Yeah, when I first left my father’s company, they offer you like COBRA insurance after the fact. I was like, “Oh, okay, well I’ll check it out.” For me and two kids per month, we’re going to have to pay like $1,700, just nothing else goes wrong, just here we go. I remember I was sitting there with the HR lady and I just laughed out loud. I was like, “No, this is not going to happen.” I was like, “No, I’ll pass, actually.” The reason I was able to laugh out about it because we had been doing our research because it is a real fear. We have a growing family, we have kids, you don’t know if anything is going to go wrong, etc. I want to get a motorcycle, so Ann’s worried about that. That was a selfish plug for the motorcycle, Ann.

Ann:
We’re going to talk about that later, honey.

Sean:
We’ll talk about it later. But, anyway, what we did is we reached out to a lot of friends, we just did our research, and there’s a lot of health sharing groups out there now on the internet. We’re pretty big into our faith for us personally, so we have found this one. So Christian Health Share Ministries, basically, what they call it. It wasn’t typical health insurance, but for me and the family and just as a general way, just to go over, it was like $500 a month for a family of four, that’s been a really good deal for us. I think another thing, yeah, you do have to put away money every month for that stuff though because they do cover things. You still have copays, things are going to be a little more expensive.
Yeah, it’s a great question to ask. It’s a real thing that happens, it’s a real thing you have to consider, but do your research. Ann’s pregnant now, so we actually had to switch her over to Anthem through Obamacare, so she’s on that. But I think that’s one of those things that we get scared of the comfortability and the safety net, and it’s like there’s a lot out there that you can catch and get on. You’ve got to move and modify, a big thing that we were told early on from one of our mentors is like you have to have the ability to move and modify, not get emotionally stuck on some of these things. But, yeah, for health insurance that is what we did.

Ashley:
Yeah, thank you very much for sharing that with us. I just searched real quickly because I remember hearing it on the BiggerPockets money podcast. If anyone wants to learn more information, it’s episode 94 where they really go into depth of different options you can have as self-employed or you’re retiring, whatever, for health insurance if you guys want to check that out. Tony, you want to take us to the rookie request line?

Tony:
Rookies, if you guys want to get possibly have your questions shown on the Rookie Real Estate Show, give us a call at 8885-Rookie. We’ll take a listen and if we like the question, we’ll share it with the guests. Sean, Ann today’s question.

Avery:
Hey guys, this is Avery from Delaware. Just calling with a quick question for you. I’ve done one deal so far. I’m getting ready to wrap up on my second flip with the third under contract. It’s a buy-and-hold duplex, and possibly, a fourth that I’m working on. How do you guys deal with this feeling of almost like imposter syndrome? So going from learning and spending all this time analyzing to actually doing and feeling like, “I still have no idea what I’m doing, but I’m just doing it.” All right, thanks.

Sean:
Flying by the seat of your pants, I guess, like that feeling is what he’s getting at. I understand that, I understand that for sure. One rule that I told myself when you’re like, “Okay, I’ve started a business now.” Is, one, to have some humility. I think a good part of that is like, “Hey, look, I’ve seen some people that have been in business and been very successful for a long time.” I’ve been doing this for a year and a half full time, so most of the time it’s like I’m not going to be… I’ve chosen that until I’ve hit like five years plus, I’m not going to give out a lot of advice as if I’m some guru. We’re still rookies, we’re still working, we’re in there.
I do have that mindset and try to keep that humility in front of me, which I think is helpful. But on the flip side, yeah, I hear that fake it till you make it sometimes. When I was a home inspector, you do any job. You come in, you’re customer service, you’re answering the phone. It’s your first time doing it. Are you going to be great at it right off the bat? But, no, but have some confidence in yourself and just focus on the job. My advice would be treat it like any other new thing you’ve ever done. If people see you at the beach with a surfboard in your hand, I think composite, they’re like, “Oh, man, this guy’s a surfer, right?”
And you get worried. Are you not going to go out and surf just because you’re scared of people judging you when they see you out there falling on your face the whole time, or whatnot? It’s like go out there and give it your best shot and just try, and then all of a sudden you’ll find that you are that person over time. Yeah, just lean into that feeling, I say, like lean into it and embrace it.

Tony:
I think that’s a really great piece of advice, and just to be transparent with all of you, I felt that coming into this hosting position. Like, “What? You guys want me to be a host on a BiggerPockets podcast? I’m still new myself, what could I possibly have to add to other people?” But it’s like as you start to get some momentum behind you, you start to build that confidence. In each subsequent deal, you become more and more and more confident, and you become more and more sure of yourself as an investor. There’s still moments where I doubt myself where it’s like, “I don’t know how to do flooring. I’ve never demoed a house on my own.”
Like there’s so many parts of real estate investment that I don’t know, but there’s also so much that I do know. It’s that growing of the parts that you do know that I think make you feel more confident, make you feel more comfortable. For the guest that asked that question, for the listener that asked that question, just keep going, right, just keep going.

Ann:
And like just being open to still learning. Like Tony and I learned so many things every single episode, and it’s so awesome to be in this position to be able to ask the questions selfishly that we want to learn about and explore. I think that’s a big thing too, is be open to continue to learn. Let’s go on to our random questions. I’ll go first, and my random question for you guys, as you spoke in the very beginning, you had $90,000 in student loans, was it? What advice do you have for rookies on tackling that debt? What lifestyle changes did you guys make? Did you increase your income? What did you guys do for that?

Sean:
Sure. I think a cool part about that story is, well, I don’t know if it’s cool, but just to make it more relatable, we were not high income earners. I think sometimes it’s like, “Well, we just made a ton of money. What can I say?” We weren’t, Ann was a school teacher, I was in customer service just starting out. Yeah, it was $93,000 at 6%. It was a big burden, and we saw that on the horizon, right before we got engaged. It was very important to me that we were unified and that we tackled that. I was like, “I don’t want to be sitting here in 15 years still paying off these student loans, like that would drive me nuts.
Ann and I went to Financial Peace University, which is part of Dave Ramsey. We love Dave Ramsey. Obviously, I think there’s a balance there. He’s a great, great starting point for money management, and then obviously, we do believe in some positive leverage, obviously, being flippers as well. I really love my Amazon credit card points, so you’re not taking those away. But when it comes to paying down debt, we soak that up and it taught us a lot of tools. What we did with that, we paid off $93,000 of student loans in two and a half years, as Ann as a school teacher and me doing customer service and we hit it hard. We took our tax returns for the way it fell over time, that two and a half years fell over three years of tax returns.
We took all of our tax returns, we got a little bit of money for our wedding. We put all of that to it and lived at her grandma’s house before we got married for like eight months. She was a special education teacher in Virginia. She took all of that money, I think Ann by herself, post-grad, before we got married, paid off close to $30,000 by herself. Her parents gave her like a 2000 old Dodge caravan, minivan to run around with. It was whooped, it was whooped, but it was free. So she did that. She lived at her grandma’s, and then we also would do our monthly budget. That’s what catalyst to turning us into big savers that allowed us to get our first real estate deal. Honestly is we said, “Hey, look, our minimum payments for this loan are 400 bucks a month. Let’s just squeeze this as much as we could.”
We didn’t spend a lot of money on our… we each had like, which actually now it’s less sometimes, which is funny. But back then, it’s like, “Okay, we each get 50 bucks a month for personal money and go spend it on whatever else you want.” We just lived by that budget, and any difference that we had for that two and a half years, we just rolled it. We just threw it at it every chance that we could. That’s what we did.

Tony:
I love that you guys share that because I think for a lot of listeners, they’re looking at the two of you and they’re like, “Man they’re killing their 11, 12 deals, they’re flipping this, they’re doing that. They start comparing themselves and like, “Man, why am I not there?” It’s because they haven’t sacrificed in the way that you guys have. They didn’t drive the ’89 Dodge caravan. They didn’t live with grandma. They aren’t doing the monthly budgeting things. But those are the sacrifices that you need to make in order to put yourself in a position to become a real estate investor. For those of you that are listening, think about what sacrifices you’re not making. Think about the hustle that you’re not doing and start questioning yourself and what lifestyle changes you need to make to really put yourself in a position to be a real estate investor.
I’m a big mindset guy, so when I hear stuff like that about you guys hustling really hard, I got to make sure I highlight it. My question for you guys, slightly different. With all the flips that you guys are running, are there any software or tools that you guys have that help make managing those projects more efficient and more easy for you guys, or what have you got?

Sean:
My entire business is on my Google Drive. Like I do my time sheets for my guys for payroll. They all have Google Sheets in there, so they can log in and log out their time. I have all of my budgets in there, our profit and losses. Every Thursday night, for tonight, for example, I’m meeting with my admin assistant and we’ll go over the budget. Yeah, just Google Drive, Google Sheets, Google Drive, just the whole deal. Each folder, and it helps you keep it organized. Because in my Google Drive, I have properties and flips and that’s one of the tabs. I go in there, each property has its own folder, and when you first go into the folder, I have the purchasing HUD and then I have the selling HUD and then I have the budget and then one for others.
In the others category, I have an Adobe scan app on my phone I use constantly. If I have a subcontractor sign on something, if I pay utility bills, I scan those and I upload them to my Google Drive, put them in those other folders because you never know when you’re going to need them. Yeah, I guess thanks to Google, not that they need it, but thanks to Google.

Ann:
Touching on that too, Tony, sometimes why reinvent the wheel? Like sometimes simplicity and saving and little areas like that, we don’t need another monthly payment or some program that we have to subscribe to that claims to make life easier. It’s like maybe we’ll have that one day when we’re big and it’s necessary. But, for now, Google Drive is free and it works wonders. It’s just another area where it’s like when it’s time, it’s time to bump up to something else. But, for now, simplicity is the right direction to go.

Ashley:
I really liked that tip.

Sean:
Yeah, we are doing a payroll service as well but-

Ann:
Oh, yes, we are doing a payroll service.

Sean:
We use ADP for payroll just like through and we do it on their app. There’s two, another one of those, just to Ann’s point, ADP’s a big payroll company and you can do it on your computer and download this big desktop software and do it all that way. When I was calling around I said by ADP, you want to try it out. I didn’t know this, but I was like one of the first three people to ever try it. They don’t tell you that. But he’s like, “Hey, if you try the app, we’ll give you free payroll for the first six months.” I was like, “Yeah, let’s give it a whirl.” All those things go together, but yeah.

Ashley:
Yeah, you advised Ann about the software because a lot of… this is a problem I run into is, yeah, you sign up for these softwares, you can upload all your documents, everything’s in one place. But then what happens when you’re ready to leave that software? Whether, for example, when I switched everything from being the property manager to another property management company, okay, I’m not paying for the software anymore. Okay, you have to individually go in and download every single file. They do not make it easy to not use their software. Now anything I use I’m doubling it in Google Drive anyways. So now for my documents on my property is like almost exactly how Sean had described it, the folders just like that. The acquisition, the rental information, all that stuff is in Google Drive.
Just because that way I always have access to it and I’m not having to double put it into places anyways. Well, that’s a great tip. Can you guys tell us where people can find out some more information about you guys? I’m sure everyone’s going to be wanting to follow you guys on Instagram and seeing these pictures of your guys’ flip, so please share.

Ann:
Thank you. I do the social media managing. Our handle on Instagram is probably where I do the most live, I guess, just updates on our flips. We’d love for people in Virginia Beach to follow that too, because then they can see if they’re looking for a house, they can slowly watch the progression of a house being done. That’s fun, so our handle is [email protected] So @_teamwayne. Then we do have a website that Sean will blog on a little bit, I think you’ve written one for me, Sean. I love him, but he’s so busy. I’m like, “I need you to write more blogs for me.” But seanandann.org is our our S+A website. That’s another area, that’s more of the visual piece. If you’re looking for…
I do a lot of DIY on there as well, so just tips on painting or flipping furniture, or right now I’m doing flipping vanities. If investors are thinking of a vanity or set or cabinets being something that they want to flip or save money on, I have tutorials on there. It’s tips and products that I use. But it’s mostly, yeah, just a place where we are putting our projects and we can highlight our portfolio and our journey. I think Sean said it before, the humility piece is a have on the website that we’re still becoming rookies. If people want to follow us along on this journey, we want them to be with us because you don’t want to feel alone.
You want to have that come right where you are, struggling or they were where you were 20 years ago or whatever. We love having other rookies or other investors or newbies just right there alongside of our journey. Like I said, I mentioned before, that’s where I get a lot of my inspiration. I’m always on there and telling people, “Oh my gosh, we’re doing this on our next flip. Thank you so much for aspiring.”

Tony:
So now you guys are going to see a bunch of other flippers who are in the same hearing, boom, pattern from what you just said all over the place. Be ready for it.

Ashley:
Sharing is caring, I love it. I love it.

Sean:
Just to add on what Ann just said too, I mean, I’m a millennial so obviously I understand social media and I like social media. But as I’ve gotten older, I’ve more disconnected from it and been like, “I don’t need that.” When we first started, Ann started doing Instagram and the website. I was like, “We’re not like looking for jobs or anything like that. We don’t need it. We’re not chip and gel like this, just whatever.” She really pushed back on me, she’s like, “No, I’m just doing it because it’s fun to me. I’m just engaging.” Guess what, through her Instagram, so many things have happened.
We had someone reach out to us when we were in our first year to help them with several of their own projects that turned into actual real money for us through some of the relationships of her Instagram posting. We had someone offer to be a hard money lender for us. I really had to eat my shorts on that in the end. I was like, “Okay, all right, I’ll step back. I’ll step back.”

Tony:
But, see, that’s really interesting there. Because, Sean, you’re the in-person spokesperson that’s like doing a lot of the connecting. But then, Ann, it sounds like you’re the digital version of that, right? Where you’re making connections to the people through social media, through the blog, and both are super important. Because people do business with people that they know, like, and trust. Sean, you’re doing it in person and you’re doing it online, so you guys are really hitting it from both angles. I love that.

Ann:
Yes.

Tony:
Well, guys, you dropped a ton of knowledge today. Before we sign off, Ashley, I just want to give a quick shout out to one of our real estate rookies. For the listeners, if you guys want to get shout out on the podcast, join the Facebook group. Now just search the Rookie Real Estate Facebook group, tag us on Instagram, things like that. We’re looking for folks that we can shout out. But, for today, we’re shouting out Randy Searcy. So, Randy, just finished up his very first investment property. Now he’s moving on to the second one, so Randy kudos brother, glad to see you killing it out there and can’t wait to see the second one hitting live, so appreciate it, brother.

Ashley:
Well, thank you guys so much for joining us today. This is really fun.

Ann:
Thanks for having us.

Sean:
Yeah, thank you guys so much.

Ann:
That was an amazing opportunity, thank you.

Ashley:
Yeah, well, you guys gave such great advice and I think our listeners are going to take a lot of value from it. I’m Ashley Kehr, @wealthfromrentals and he’s Tony Robinson, @tonyjrobinson. Make sure you guys listen to us on Saturdays and Wednesdays.

 

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In This Episode We Cover

  • Why you should tell EVERYONE what you do and what you’re interested in
  • How to talk to a mentor to convince them that you can provide benefit to them
  • Tackling both the mental and financial barriers to leaving a corporate job
  • Funding deals with hard money and private money
  • Splitting up your roles as a team, whether you’re business partners or partners in life
  • Resources for finding the best designs for your flip
  • Keeping your partner “in the know” so your flips runs smoothly
  • Fighting imposter syndrome as an intermediate real estate investor
  • And So Much More!

Links from the Show

Rookie Deal

  • Flip
  • Purchase Price:  $79.000
  • Rehab Cost: $22,000
  • Sold For: $155,000
  • Net Profit: $42,000

Connect with Michael: