BiggerPockets Podcast 015 with Glenn and Amber Schworm Transcript
Link to show: BP Podcast 015: From $80k in Credit Card Debt to 100+ Deals with Glenn and Amber Schworm
Josh: This is the BiggerPockets Podcast, show #15.
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Josh: Hey everyone, this is Josh Dorkin, founder and CEO of BiggerPockets.com, the real estate investing social network information hub and marketplace. This is the BiggerPockets Podcast.
Here I am with my co-host, Brandon Turner, live and in the flesh. We're actually sitting in the same room. Kind of weird.
Brandon: That is kind of weird. We've never actually done this. I don't know, people might not know it, but when we're recording this podcast we're usually a thousand miles away from each other, but for the first time ever we are at the same awkward kitchen table about six inches from each other.
Josh: It's a little bit weird.
Brandon: It's a little weird.
Josh: He's a little close, and his breath—not that good.
Brandon: I'll blame it on the steak we just ate. It was good.
Josh: Yes. So, listen we've got Brandon in town, it's been a lot of fun. We actually did something pretty exciting today – actually yesterday we did something pretty cool. We had a little Denver BiggerPockets Meet-up, which is really, really cool. Here's a quick tip—not the quick tip, but a quick tip: all these Denver guys got together because they all have keyword alerts set up for the "Denver" on BiggerPockets. When we were like, "Hey, everyone in Denver— let's get together," they all showed up. It was pretty cool.
Brandon: It was.
Josh: It was, but today the cool thing that we did was, we went skydiving.
Brandon: Yes, but not like jumping-out-of-a-plane-at-a-million-feet-and-freaking-out skydiving. We did the indoor skydiving and it was awesome.
Josh: It was very fun. For those of you who don't know, Brandon is a six-five, he's not six-foot twelve as I decided last week, but watching this ginormously tall guy in this round camber spin around was lots of fun and you can actually see photos of Brandon and myself indoor skydiving on the BiggerPockets Facebook Page, correct?
Brandon: Correct, and that leads us to today's official quick tip: real quick, our quick tip is: go to the Facebook Page of BigPockets and like us because we like friends and we have a lot of conversation going on over there.
Josh: We need friends!
Brandon: We need friends. Yes, head on over there.
Josh: There you go.
Brandon: Facebook.com/BiggerPockets. So head over there. Yes, like I said, it's great. Come connect with us there and check out the picture of me and Josh floating and flying.
Josh: Lots of fun, lots of fun. So today we're going to talk to Glenn and Amber Schworm. Glenn and Amber are house flippers, they do a little of wholesaling. They've actually flipped over a hundred houses and counting. They own a company called Signature Homebuyers which is now, I think they're talking about on pace of doing over sixty houses a year now. They’re a fun couple, they like to do crazy stuff like skydiving, which is a perfect lead-in. You know, we're really excited to have them. This is going to be a fantastic show. So, without further ado—Glenn and Amber, welcome to the Podcast.
Glenn: Thank you.
Amber: Thank you.
Josh: This is our first four-way conversation where we're very excited about it. So, thanks for coming onboard. Why don't we just jump right into this thing —what kind of investing do you guys do?
Glenn: We primarily buy homes, renovate and sell—so we're flippers. Primarily. We do a lot of wholesaling as well lately, but lately we kind of cut our teeth on renovations and selling. That's what we did.
Josh: Gotcha, gotcha. So flippers and wholesalers. Perfect because that is the plan—we want to talk about both of those things today. How long have you guys been at it?
Glenn: Well, four and a half years, right?
Glenn: Yes, four and a half years so far.
Josh: Excellent, excellent. Oh, by the way, I do want to make note that they do—Glenn and Amber—do have a new baby, who is actually hanging out with us in the room. Well, virtual room here. If there's any kind of interference from said baby—you know, deal with it, guys.
Brandon: It may be me crying, it may be the baby.
Josh: Nice. Okay, so you guys have been at it for about four and a half years. Which means you kind of got into it right as the bubble had popped and things were getting a little chaotic. How did that play into the whole decision making and I'm getting in with that part of your decision, "hey, real estate is going crazy, it's hot, it's cold," I mean, what made you guys jump in?
Glenn: No, I don’t think that was our decision at all. I think we did it out of desperation. We started the business—I was about eighty thousand dollars in credit card debt and we were both going through divorces at the time. Not from each other, from different people. We were going through that and it was a really difficult time. I think, we had always talked about doing real estate and I have always, you know, I had read books, I had bought course many, many years ago—twenty years ago, plus—and so always had an interest in real estate, always followed it, had friends that did it for a living and I think we just wanted to get started so we did our first house and you know, kind of went all-in with it. I don’t know if you want details of that now, or—
Josh: Oh, yeah. Absolutely. I mean, tell us about that first deal. What it looked like.
Glenn: So, the first deal- we purchased a home that was in our neighborhood that I lived in for ten years and we actually—I'll give you a little background how we found it—I became friends with the mail carrier because I would see her every day. I work from home, and I would see her every day and I would say, well, if you ever see any houses, let me know, and so she did. She let me know about one—I was actually in the shower and she came in and yelled and said, “hey, there's a house up the road, there's some people working on it”. I got out of the shower, I actually ran up to the house and walked in and there was a couple that were probably, what would you say in their eighties?
Glenn: Probably in their eighties and they were putting a countertop in. Now, if you've ever put a countertop in, you know that it's not easy and they were trying to cut the sinkhole and they're in their eighties and it's probably about 85 degrees outside, probably about 95 in the house, and I walked in and said, "do you guys have any interest in selling the house to us?” So, we met them on a few different times. We really had no idea what we were doing. I called a friend that we could still obtain financing at that time. It was just at the tail-end of when you could get, if you had good credit, you could get a loan, a no-income or no-doc loan.
Glenn: That was the very tail end of that. So I called the buddy of mine and said, “look, can I get a mortgage on this house?” and we did. The funny part of that story is that at the closing table as we were buying the house I said to the woman, “you know what, just out of curiosity, when did you guys decide you wanted to sell the house?” And she said, “the minute you walked in the door”. So, looking back, you know, they're eighty years old, it's hot, it's sticky. She inherited the house and they were just trying to essentially flip it themselves, but realized—I think she realized the first few weeks in; My god, what have we done?
Glenn: We walked in, bought the house, we did all the work ourselves. We really had no money, we maxed out every credit card we had, every line of credit. I had a little bit of home equity on one of the houses that I owned. We maxed everything out, still maintained our good credit rating, but we maxed everything out. We actually by the time—we did all the work ourselves, right?
Glenn: Except for what?
Amber: Except for the hardwood floors and some of the painting.
Glenn: Okay, yeah, so that's right. We had a gentleman come help us with that, but other than that we did all the work ourselves. It took us, what, three months? Four months?
Glenn: I think we planned on having it done in two weeks and it winded up taking four months.
Brandon: Yeah, that sounds very familiar.
Glenn: We didn't have any contracting background at all. Really didn't know much about it, and, you know, just again we needed the money. We needed the money, and we wanted a lifestyle change, we wanted to do it. We thought that that would be the way to do it. We sold the house and wound up at the end of the day—I think we held up for like six months, eight months—something like that. At the end of the day we were down to our last $1500 of cash, credit, line of credit, whatever. We were down to our absolute last, you know, pennies to survive. We weren’t sure when that ran out, what we were going to do. We were just praying that the house was going to sell and thankfully it finally did, and I think we cleared around fifteen thousand profit at the end of the day.
Amber: Yeah, that sounds right.
Glenn: Which, looking back, that was certainly not what we are trying to shoot for now on a deal, but for us, after we paid all the credit card debt back off, we made fifteen thousand. We realized that this had potential. It wasn't life changing money, by any stretch of the imagination, but it had potential.
Josh: That's great.
Glenn: So, we went to the next house. I think we—the next one was probably the one that really got us hooked. If you want to hear about that I would be happy to share with that one.
Josh: Well, before you jump into that, really quickly—you mentioned talking to the mail carrier, and I just wanted to reiterate that point because I think it's a really, really good piece of advice that anyone who's listening wants to jump on. You know, using your mail carrier. I mean, they walk the neighborhoods, they know it, they’re a really good source for inside information. So, definitely get a relationship with them. It's a great way to find deals and Brandon's pointing at himself, so I don’t know if that means he's the man or if that means he wants to talk, but why don’t you say something?
Brandon: I just wanted to add— The thing that really stood out to me there is something that people talk about a lot, you know, seasoned investors is that you were solving somebody's problem. You know, price is not the only issue, I mean, these older people— their problem, like you said, was the heat and the fact that they were over their heads and they couldn’t remodel the house themselves and didn't want to. So, you know, that that was much more important to them than price. I just wanted to point that out, because I think that's huge. I guess I'm also wondering, Amber; I actually have a question specifically for you. What was your thought, I mean, I'm assuming—maybe I could be wrong—, but Glenn you were probably I'm guessing what was driving this since you had read the books and the courses. What was your thought, Amber? Going into this?
Amber: Well, Glenn and I make a really good team because Glenn's more of the numbers-guy. Like, in our business what he does is the buying and selling and dealing with all the attorneys and all the paperwork, and I kind of have the role that most people would not anticipate that I would have and that's the project management role.
Amber: And even in the beginning I'm the designer, I pick out all the fixtures and the colors and the textiles and all that for the house. So, we make a really good team in that aspect I think.
Glenn: She's an amazing designer. That really makes our houses set apart. She’s great at that part. I don’t have vision when I walk into a house at all. I see the numbers very clearly, I walk in I can see if it's going to work or not and she looks at it and sometimes I'll say, “is this going to work?" and she'll say, “yeah, I can make it work” and I say, "really?" and she says, “you've got to trust me - I can do it”. So, we are a really good team in that respect.
Amber: Yeah, I can go in a house that is a hoarder-house that smells like cat pee and tell them if it's gonna to work or not.
Glenn: Yeah, she's great like that.
Josh: You know, it's a lot like—we did a show with Jay Scott— I don't remember which show number it is at this point, but he and his wife are very similar in their team. She does the visual, the staging stuff. It's great to have a team, a husband-wife team. It's really important if you were lacking in one area to have your spouse or partner really fill that gap, so that's awesome.
Brandon: My wife and I do the same thing. She's the smart one.
Glenn: I think we knew that. That's always the way it is—the older you get, the more you realize that they are the smart ones.
Brandon: Yep, they are.
Glenn: So, that probably segues nicely into the next piece because that next house I want to tell you about—that's the one that hooked us. I'll tell you about our teamwork on that. This next house was in the same neighborhood. We actually bought our first—I think four houses, or out of our first six houses, four of them were from the mail carrier. We paid her a referral every time she brought them to us. You know, listen, they're not supposed to tell you a lot of stuff like that, but they're people. They're humans. They'll give you information if you can ask for it, you know, if you become friendly with them. We do take care of her, give them referral fees and that kind of stuff, but this next deal we found was about two doors down from the home that I owned for ten years.
My ex-wife and kids still live there, when they weren't living with us, and we got some inside information on the home from the person across the street. They kind of told us, they said, “listen, we own the house, we have a problem, someone's living there, we want to get them out, here's what we'll take” and instead of having to negotiate they said “here’s what we’ll take” and we looked at the numbers and said, “we can make that work”. So, we bought that home and we had the same type of financing, but we had—we really were backed down, we had used the $15,000 we had to survive for the next month or two. Then we had to max our credit cards out again, but here’s where it kind of got interesting. We bought the house, and was it thirty-three days?
Glenn: Thirty-three days, we did all the work ourselves. Teamwork.
Amber: We worked 15 to 18 hour days.
Glenn: Yeah, they were long. The neighbors felt so bad they were bringing food across to us and coming to see us and it was a good thing, but we— in thirty-three days we turned that house over. We had a open house. It was jam-packed with people, and we sold that house in a multiple bid situation for $2,000 over what we were asking and this is definitely— I think this was 2008—this is definitely the time that people were saying, “run for the hills, real estate's no good, nobody's buying houses”, and we actually made about $33,000 profit on that deal and we were in and out of that thing in no time.
Amber: I think one of the differences with that house that new people could—a nice little tidbit for someone that’s getting started is—we had a better plan for that house. Every night we would sit down and say, “what do we need to do the next day?”, and we would stay there until we got that list done. That's why we were able to accomplish that in thirty-three days. Whereas the first house took us considerably longer, we went over budget-on, but the second house we had more of a detailed plan and that made all the difference in the world.
Glenn: Yeah, for sure.
Josh: That's great.
Brandon: Well, that reminds me, Glenn. You had a post on the BiggerPockets' blog the other day, called Do You Have the Mindset to be on Shark Tank and you talked about the importance of, you know, not setting a— how much your time is worth and saying, “well, I'm not going to work that many hours”. What can you tell us about that? Because I thought that was an awesome post.
Glenn: Tell us in what respect? What would you like to know?
Brandon: Well, I guess if you could just kind of explain your theory behind, you know, if you work people like to say “well, I’m not going to work 18 hours a day because that would only account to $10 an hour, and I'm worth more than that”.
Brandon: I guess, do you have any thoughts on that?
Glenn: I think it's a matter of, like I said, I think it was that post or another post. We invest our time and when you invest something you're hoping for a greater return, and so you may not get it. People invest money all the time and don't get a great return, but if you invest your time you may not get a great return. It might be $10 an hour, but I can tell you in this case we invested our time. I've never done the math on it, I actually never do the math to determine an hourly rate, that's just not how my brain works, but there was two of us working eighteen hours a day for thirty-three days straight. May have had a half a day off here and there if we slept in one morning, but we profited. It was a little over $33,000 so even if you split our times, that's not a bad income.
Glenn: For a month, and I don't care how many hours you worked for it.
Josh: That’s $55 an hour. I'm rate man.
Glenn: That was nice. Just out of curiosity, is that per— is that for each of us?
Josh: Oh, wait. You each worked eighteen hour days. So, cut that in half. So, that's $27 dollars.
Glenn: So be it. $27 an hour. People may say “I'm not worth that”, or “that's too small for me”. Maybe so, but the education that we learned from that deal. I'd forgotten all about that, but that's a good point you brought up. We had a daily plan. Every night we went home and said as exhausted as we were, and tensions can run high when you've got two type A personalities and they're working too, but, you know, but we managed through. We had that plan everyday and we learned so much by that, because that plan, if you look back. I'd never thought about this until now, but that was the beginnings of what we have our scope of work now.
Glenn: That was the early days of what a scope of work looks like. We just did it ourselves. You know, we held ourselves accountable every day, and now if you look at that time investment it was $27 an hour - but now we're not on jobsites. We have— I think right now we have, I just counted this morning—I think I have fourteen. We have fourteen houses that are in process, whether it be they're just finishing up, they're staging, we're shooting video, or they're under construction, or just about to close on them. So, you know.
Amber: I think there’s a real good point to be made, that Glenn mentioned too, about the education that you get from your first several deals. I mean, we still—we've been in the business for four and a half years, and we still learn stuff, but especially in the very beginning maybe you're not making as much as you want to make, maybe you have to partner up with somebody else and make less because they've got the money or whatever, but just the sheer education you get. You can't put a dollar figure on that.
Amber: So, I think that's a huge aspect. Wasn't that the house, too, that I sold my car? So we had the money to do?
Glenn: Yeah. Amber, she has to tell you— this is a good story.
Amber: So, we didn’t have quite enough money to finish the renovations. So, talk about, not only about the education you get, but the sacrifices you sometimes have to make in order to get your business started. I had a C230 Kompressor Sport Mercedes that I really, really liked. I had about $10,000 equity in it, and we needed that money to finish the renovations so we could finish the house and get that on the market. So, I actually had to sell my car, just so we would have enough money to finish.
Glenn: We spent the next few months—
Amber: Oh, a year. With one car, and two kids.
Glenn: Yeah, a year with one car as we were building the business. You know, you may say boo-hoo, but we had two kids. They had to go back and forth to everything under the sun, and school and everything else with one car, so that was definitely a sacrifice. My point to that before was that now we've got all these houses going and we're not going to all of them. We have teams of people that do things because we've built a system that helps us to do that. So, that time invested now is able to train other people to do that work for us.
Josh: Yeah, for sure, and we'll get into that. We definitely want to talk about how you guys kind of started to build out your system and grow it, and you know boo-hoo to you and your sacrifice on that Mercedes. Gosh darn it.
Amber: I know, right?
Glenn: Her ruby slippers were way too tight that year.
Josh: Hey, so tell—before we get into some of the more detailed stuff on that. Have you guys have any fail—you know, obviously you've made mistakes, everybody makes mistakes. Have you had projects where you guys have actually lost money, or have you guys always been successful in terms of turning profit on your deals?
Glenn: No, we've had out of a hundred plus deals we’re well over a 100 deals now. I think we had about three that were not profitable.
Glenn: I can certainly share some details, but that happens.
Josh: Well, you don't need to get into the details.
Glenn: I don't mind.
Josh: No, no, no, I mean, we're not going to have time if we do that, but let's talk about, like, there's got to be one or two things that led to those losses, right? So, what would you say the keys were in actually losing money on 3% of your deals or so?
Glenn: I would say, the first deal that I'm thinking about, the tip is to do your own homework and make sure you do it thoroughly and run your numbers realistically. I've seen a lot of great posts on BiggerPockets of people that say, you know, trust the numbers. And even as someone who's done a hundred deals, I forgot who wrote that post, sorry I should give him credit, but it was something about trusting the numbers and I thought, well, hey, that's so true. We didn't trust numbers on our first deal. An agent came to us said, “I know this neighborhood, these houses sell fast, it's a quick flip”. Every time I hear "quick flip" now my—the skin on my neck crawls. I go, “Quick flip, huh? Yeah, good for you. Well, you go invest in it then if it’s so quick”. She said it was going to be a quick flip, and it wasn't. We had every problem under the sun, and it didn't sell for what they had thought, and we all wound up losing about $4,000 on the deal. Believe it or not, it was probably, at the time, not a good experience, but now, again from what we’ve learned, it's been a fantastic experience because those mistakes we don’t make anymore. Someone says “I have a quick flip”, I say “yeah, go call somebody else”, you know?
Amber: I would also like to add that, in our business we grew a little bit too fast at one point and we had too many projects going at once so we couldn't start them as soon as we wanted to. So, preparation, I think, is key.
Glenn: Yes. Maintaining your—you know, controlling your holding costs and your soft costs that you don’t see every day. That will kill you if you don’t maintain that, and that's what happened on the other two deals.
Josh: Got it.
Brandon: Yeah, that's true. I think you hit on something really important there was don't just trust your realtor to tell you what the property is going to be worth. I had a property once that the realtor said it would be worth $110,000 when it was finished and we bought it, I think for $40,000, put $20,000 into it, by the time we sold it, we sold it for $60,000. I mean, we sold it for $60,000!
Brandon: I don't know how you get that far off—$110,000 versus $60,000, and I know the market was dropping then, but still. I should have never— I mean, realtors are optimistic and you know, that's their job to be optimistic.
Josh: It's their job to— yeah, you’ll find that.
Glenn: They want you to—and not like they're trying to be dishonest, they may really believe that the house might sell for that, but let me tell you until it’s your own money, you think very differently about it.
Josh: That's a great point, by the way, Glenn, because I've got to tell you. I mean, I've been doing this for eight and a half years and I know a ton of realtors who are, you know, they work with investors. A good, good, good chunk of them all want to be investors, and they haven’t had the experience of working from the other side. I’m not saying all of them, but that's a really good point. Until they've kind of walked in your shoes, you've got to be really careful. You've got to be really careful.
Glenn: Yeah, the numbers might look large, you say, wow, I can buy a house for $100,000 and sell it for $140,000? Wow! And people—they always think that. They look at me and say, “wow, you're going to make $40,000?” I’m not going to make it. No, I'm going to lose money on that deal. There’s not enough money to do the deal. You know, people don't understand all the costs that are associated with it, though.
Amber: And for somebody that is brand new into this industry, I would say double what you think your timeline is going to be, and double your budget. Just so you cover yourself.
Josh: That's great advice. That's great advice. Yeah, definitely. Well, let's go—
Glenn: You can—
Josh: Go ahead.
Glenn: No, no. Go ahead.
Josh: Okay, so let's go a little more into that flipping stuff, because now we were talking about flipping. What do you look for in a good flip? What kind of property do you flip?
Glenn: Single family, primarily. We've only done one two-family. We actually converted that back to a single family. So, single families. We try, though we have some exceptions to this rule, primarily we try and find a house that we can purchase, renovate and then sell it for a profit for people to have the final price be under $200,000, preferably in the $150,000 to $170,000 range.
Amber: And two bathrooms. That's a huge deal.
Glenn: Yeah, we learned that the hard way. It's worth it to add a bathroom onto a house in today's market, for sure.
Josh: Hey, really, really quick. Let's talk about that. Presumably you guys are looking at what? Three-twos, is that kind of your bread and butter?
Amber: Three-twos, four-twos, yes.
Glenn: That's what we turn them in to. We buy a lot of three-ones or four-ones and turn them into those.
Amber: Actually, we buy a lot of houses that are two bedrooms and one bath that has an attic, and we convert the attic into a master suite.
Josh: Can we talk about that? Because I had a conversation with somebody who's flipping right now, and he's like, “yeah, you know, I just started flipping these one bedrooms”, and I'm like, “you've got to go to the twos, man. You've got to go to the twos”. Since you guys are here, let's talk about that. Why do people want these three-twos? Why is that called "the bread and butter house" for these investors? Why are we focusing on them?
Amber: I think it probably depends on where you live. If you live in a pretty metropolitan city, maybe two bedrooms are okay if people are used to living in apartments or whatever. I think that is probably area-dependent. In our area, though, we sell primarily to first time home buyers, people that are just starting their families, people that have kids. So, they want two bathrooms. People love the master suite-thing, and they need three to four bedrooms. That's the desirable home here.
Brandon: You know—
Glenn: I think right now—Oh, go ahead.
Brandon: Well, that was a mistake I made on that house from 110 to 60. It was a two bedroom and I didn't realize two bedrooms don't sell in my neighborhood.
Glenn: I don't—yeah, I don’t look at a lot of other markets around the country, but I know for our market there's just so much inventory that they have to choose from that people—buyers want what they want now. We've noticed that if we don't put an extra bath in that house, we're going to take a lot less for that house.
Josh: Exactly. Cool, cool. Well, that was the point I made. So, I thought it's important because I don't think we've ever actually talked about that on the podcast and I know a lot of people have that same question, why three-two? Yes, so. There you go.
Glenn: And we try and be over 1,000 square feet, preferably 1,200 and that kind of thing.
Brandon: That makes sense. And I'm assuming you don't do your own work anymore like when you started. You can't do your own work, right? With the numbers that you deal with.
Glenn: Oh, no. I'll let Amber speak on that, because right now Amber runs all the crews. Temporarily we have a project manager-in-training here, so go ahead.
Amber: We did the first three houses—we did all the work our self and after that we—this was more Glen's big vision thinking. We started subbing things out because we could do more houses at once by doing that.
Glenn: Yeah, the first time that happened, you know, I don't know that it happened by choice, as much as it just sort of—we wound up with two houses at the same time and we thought to ourselves, how are we going to do this? You know, it just happened to both come up and we didn't have the money, and the bank financing disappeared. That literally happened overnight. I called up my buddy and said, “hey, I want to get a loan”, he said, “all done”. “What do you mean, all done?” I said, “I paid those off”. “Yeah, no. It's not you, it's all done”.
Glenn: We proceeded to look for private investors and we found a good friend of ours, we asked her to take our home equity loan out, and we agreed to pay her 14% I think it was, or at the time, this is going back a little bit. Her home equity was costing her 4%, so she was clearing 10% on money that wasn't hers, and we started our private investor base. We now have about $ 2,500,000 in private investor funds, but that's how it started, and then we realized that we can’t be at two sites. So, we started hiring contractors, and that's kind of how that kind of started to blossom.
Brandon: Ah, that's awesome. So, do you have any tips for finding good contractors?
Glenn: No, next question. That, I would say, is probably the toughest thing we've had to deal with.
Brandon: Yeah, that's the toughest thing. I think you've really got to have a good solid interviewing process, and, again, I saw a great article that just came out. I read as many articles as I can on the BiggerPockets site. Even being a seasoned vet I love reading the things on there, but—
Josh: Great blog, by the way, thank you.
Glenn: Yeah, no problem. There was an article that I saw that was all about interviewing contractors and I said, man, that, I was reading it thinking, oh, boy, I live that every day, but I'll let Amber speak to that because she's done a lot of that.
Amber: That is definitely tough. We have been lucky enough to find some really good ones. In the beginning, we made the mistake of going with some of the cheaper ones and paying the price for that. So, now, we tell the guys, look, we don't pay, top-dollar rates, we don't pay bottom-dollar rates, we're somewhere in the middle, but here's your cherry on top bits, we'll give you year-round work and you don't have to go out and advertise for it, you don't have to go out and bid on jobs that you're not going to get. So, let's keep a balanced approach at this with the pricing and timeline and everything, and I had one contractor tell me that there’s three things. You're looking for quality, you're looking for time, and you're looking for budget. Pick two.
Glenn: Yep, yep.
Amber: And that is, like, so true.
Josh: And you know what's fascinating? I've done a couple of projects recently and I've got to tell you, you know, I try not to kind of talk about this network, this BiggerPockets site, but when it comes to a contractor, I'm going to use whatever leverage I can. So, like, hey guy, you know, I've got this site, I know investors all over this area and everywhere else, but this area in particular, so do me a favor; do a good job, and you will not have to advertise, you will have work forever. And they still screw up.
It's astonishing, you know I think, you know, I'm not saying— obviously not all contractors screw up and not all contractors are bad, but I can't, I just can't, I still can't get myself around why on earth these guys in general broad terms I'm going to get lots of hate mail from the contractor, can't figure it out.
Amber: I think another thing is, that we've encountered personally, is that they have a tendency to get a little bitter, too. They're businessmen, too. They ask questions, hey, what'd you buy this house for and then they find out what we're selling it for and they think they know what the spread is, even though they probably aren't counting up all of the holding costs.
Amber: So they look at the difference there, “Well, they should be paying me more”, but the fact of the matter is, they're not the ones that are taking the risk.
Glenn: Yeah, they get paid either way.
Glenn: One of the very first seminars we ever went to together five years ago or whenever it was, the women that spoke said, you know I'm looking for mature, responsible adults, and she went on, and she hammered that point home. At the time I thought, boy, she's getting a little powerful about that, what's the big deal? Hah! Now I know exactly what the big deal was, now that we've lived through it. It's so important, you know, Amber and I have said before, it's almost like dating. You have to kiss a lot of frogs to find your prince—not that we kiss our contractors, you know, for example; You have to sort through, and sort through, and sort through. We now are fortunate to have three or four, maybe even five solid people that seem to have our back. We've dealt with this for a while and it's been a good—once you find those guys your business will start to look very different.
Josh: Yeah, for sure. Hey, so, you had talked about the private investors and we'll jump back to flipping in a sec. Can you talk a little bit about building that private investor base?
Glenn: Sure, that was kind of my side of the business when we got started and ironically, like I said, the first investor we had was a friend of Amber's and we just kind of sat down and proposed that to her. I think one of the key things we did that made us successful is that we had a property. So, we sat down with them. We said, “here we have a property we need funding for”. That sort of creates urgency on the part of someone that might be considering becoming an investor, because now there's, you know, if you go to somebody and say, “hey, do you want to invest in me?” and they say, “well, I don't know, what do you have?” “Well nothing yet, but…” and there's nothing wrong with planting those seeds, but when you have something tangible in your hand, and there's a timeline to it, people start to think a little more seriously about it.
So, we start with that first one, that went well, but then again, we had another house coming up very shortly after, and we needed additionals. So, I actually put together a packet that just kind of explained who we are, what we do, the type of charity we do in the town, we sponsor some baseball teams, that kind of stuff. We had our picture in there with the team and I put a nice package together and I sent it out to maybe, 20 or 30 people that I knew. I went and met with some people that I knew who I thought may have money or may have known of people that had money, and I didn't take a direct approach—in other words, I didn't call and say, “hey, do you want to invest money with me?” I sent it out to everybody because I know that people don't always like to be sold on things. So, I sent out to everybody and said, hey, do you know anybody that might want to invest with us? You know, we're paying 12%—at the time we were paying 12—I said, do you know anybody that might want to invest? By the way, I'm happy to pay you a 1% referral-fee, if they invest a $100,000, we'll pay you a $1,000 bonus. So, you know, a referral-fee. That's sort of how it started.
We were fortunate enough to have a—I call him my sugar daddy—we had a guy that came from Massachusetts and he was an old friend, we had done business together in the past, I hadn't talked to him for a number of years, and he kind of called up and said, what is this you have going on? That was right when the stock market had crashed and he had cashed out and had some cash on the sidelines. It was a substantial amount, it was enough to do 3 or 4 deals, and we started our dance, and then he started to refer other friends, and then as we grew—this is sort of a cute funny story.
One of our investors was actually a delivery man for Home Depot. So, talk about not knowing who you're talking to and to treat everybody the same. We're never ones to condescend; we try treat everyone the same. Just, whoever we meet in life. I don't care if it's the President of the United States or you're taking my garbage out, I could care less what you do for a living. I just want to know who you are as a person. So, this driver had been investigating us—we didn't even know that—but he was going to job sites and saying I keep delivering to these guys Signature Homebuyers, what, who are these guys? I keep delivering stuff to them, and he called us up one day and said, I've been checking you out, I've been asking your contractors if you pay your bills, I've been asking a lot about you, and we're becoming the top buyer at Home Depot. We actually had been for many years now, the top buyer there. He's like, “I’ve got some money to invest in my IRA, can you help me out with that?” and we have people set up—we use self-directed IRAs—we helped them do that, and we got him set up. But, what a great story that he investigated us and came to us and approached us because he saw how we ran our business?
Glenn: So, that was a great story.
Amber: I think another thing is too—people have a fear of rejection so they're afraid to even ask, and there's money all around us from people that you wouldn't think the Home Depot driver would have had money, but another kind of cute story—our third house. We actually partnered with a couple, and at the closing table they got like $60,000 back. So, I was sitting there and I said, so whatcha gonna do with that money? So, they actually invested in our company, and it's from the sale of that house that we bought from them, one of the rehabs that we did, and they've now invested all of their retirement income with us, as well.
Josh: Oh, cool.
Glenn: Yeah, if Amber hadn't asked that question I don't know if we would've had them as investors today, but she— we got done with the deal, and she said— that was a good line. I looked up, and she said, “I don't know, what do you have in mind?” We said, “well, let's talk”.
Josh: Don't be afraid to ask. That's great.
Glenn: Oh, that's for sure. You never know.
Josh: Hey, so, you know, one of your early posts, we're talking about flipping here, before I jumped over to the private money. One of the early posts on the blog talked about how you flipped a property from $20,000 to $85,000 in— it was under a week; I think it was. So, tell us a little bit about that one. That seems like an interesting story for folks.
Glenn: We do about three a day of those, don't we honey? Those do not happen all the time, I want to make sure people know that. I know sometimes people have a deal like that and they tend to go on and on like that's how their life is every day, but that's just not the way it is. If you're in the game long enough, I think eventually you're going to find one of those. That was, you know, someone called off a bandit sign, which we use a lot of. Personally I think their kind of cheesy, but by gosh, people call them every day. So, we use them. I don't mean to offend anybody that uses them, I think their cheesy, but I just—
Brandon: I'm not a fan.
Glenn: Well, I'm not either, but they work. So I have a hard time not using them because people call them all the time. So, anyways, someone called off this, and we met with the family. They'd owned the house for a number of years, it was full of stuff, and they just wanted out. I think I'd written in a blog, we offered them $20,000 and they—without hesitation—said yes and I thought, I should've offered $10,000. They had inherited it and they didn't really need the money. They just wanted to get out. We bought it, and we have an agreement with a guy that owns a local shop here. He pays us to clean the house out because he—it's just like Storage Wars, you know, he wants to go in there and get all that stuff to sell, so he paid us, whatever— the few hundred bucks, whatever it was, and we went in, cleaned it out, made it broom-swept, we put it on the market and we had all kinds of offers and sold it right away. It was actually a neighbor that wanted—like, a neighbor wanted to buy it so his son could live there so he had to have it in the neighborhood. So, I literally walked in the house once, I walked in, said, let's get this cleaned out. We made a couple of phone calls, you know, we had to do some stuff to sell it and whatnot, and we actually had to purchase it, but I mean with twenty grand you can just about buy it on a credit card, so that was a good day. Those don’t happen every day, but that was a good day.
Amber: Another kind of fun story was, we had a guy working for us, and someone called off of a bandit sign again, and he came to Glenn and said, “this lady said she'd sell us her house for a dollar!” and he said, “how much should we offer her?” So, I said “A dollar!” So, it goes back to your point about solving other people's problems, you know, one person might look at that scenario and say, oh, you really took advantage of that person, but what really happened—that lady didn't want the house, it was in a bad neighborhood, she had to pay taxes, she lived out of state. She didn't want the headache of it. She wanted to get rid of it, so she was happy to sell it for a dollar.
Glenn: We bought that for a dollar, we paid a crew—I think— $600 to clean it out. It had about 30,000 dead pigeon carcasses in it. That was a lovely smell. When they cleaned it out, again—she didn't want to deal with it—she's out of state and she was paying—I think— $6,000 a year in taxes. So, it was killing her. So, we bought it and sold it about two months later for $7,000, and, you know, made a few dollars there, and walked away. Helped her out of a situation, and made a few bucks for ourselves.
Josh: Nice. Do you have photos of the 30,000 pigeons?
I think the smell's still on some of my clothes.
No, I burned those.
Glenn: Yes, that was bad.
Brandon: Well, we'll be sure—we're going to link in the show notes as well to do that story about the $20,000 to $85,000 thing because that was really, really good article. That'll be on the show notes at BiggerPockets.com/Show #15.
Josh: Show #15!
Brandon: Yes, Show #15. Well, let's go over to—because that was a really quick turnaround, let's go to even maybe quicker turnarounds. Talk about wholesaling. You said you'd kind of been moving into more wholesaling lately, sounds like your business model might be expanding anyway. So, you know, we talked a lot about it in episode #12 with Sharon Vornholt about wholesaling, but was does the process look like for you guys? How do you do a wholesale deal? What does it look like?
Glenn: Well, number one we—wholesaling came as a by-product of doing a lot of marketing, and then for years people would call and we'd ask a few questions and then we'd turn our back and say, “no, that's not a property for us”, and we let it go.
Then one day, we started thinking about, there are people that—just because we don't like that neighborhood doesn't mean there aren’t other investors that don't like that neighborhood. So, what are we doing? It doesn't make any sense. Someone calls and says they want to sell us a property why aren’t we selling it to another investor? So, that's kind of how wholesaling was born. I think the first deal we ever did, we actually purchased a home.
So, this time we actually purchased one, but we bought it, and a woman called me up the day—we put a sign on the yard the first day that said coming soon, and she called that day and said, how about I give you $10,000 for the house above what you paid? And I said “what?” and I actually had to say “do you want to see it?” She goes, “no, I'm all set”. “No, I would just feel better if you actually saw the house, I don't want you backing out”. She goes, “I won't back out”. I went and showed her the house and she bought it. So I said, hah! That was interesting. That got our brains thinking in that direction. For us now—here's what wholesaling looks like—we have consultants that work for us. The phone rings here every day with people that want to sell their house. Our consultants go out and they look at those properties, and we place them under contract if we can, and then we go out and find a—you know we have a huge buyer's list—we'll mark it to that buyer's list and find a seller and then we'll make the spread, so we buy it for $10,000, sell it for $15,000 there’s a $5,000 spread there. Our girls get a sizable commission on that every time they do that. That's how we do things. Now, I don't know how everybody else does it. I really don't have any idea, but I've heard different ways over the years and certainly everybody has their own way they do things, but we're very upfront with people when we talk to them. I've heard of stories in the past, where people put them under contract, and put under the name, they might just put a [around 42:00 the audio cuts out] signs or something like that and then they run around, they try to find a buyer.
Glenn: You're maybe not—and I don't want to offend anybody if they're doing it this way, certainly if it works keep doing it, but if you're bringing people into the house and you're saying they're a contractor, but really they're an investor, and that kind of stuff. We don't ever want our image to be shady at all. So, just because of what we heard happen before we were in the business.
So, we have an agreement upfront that we have them sign that states out exactly what we're going to do. It says; look it, you have a house you want to sell, you don't want to initially put it on the market, you want quick money, we know people. We're going to buy it from you for this price—we give them a price. We're going to then go out and sell it for more money and whatever we get, is what we get. You get what you want, we get what we want, there’s no extra fees out of you and we get the difference. If it’s a couple thousand bucks or $10,000 that’s what we get. So, they know going in exactly what we’re going to do. I think they respect us for it. We have to explain it a little differently, but I think it opens up a lot of trust right there, because they know what we’re doing. We’re not just coming back trying to be “oh hey, here’s a contract”, when really it’s an investment, and you’re trying to sneak them in the door and all that kind of stuff.
Josh: Do you do a double closing then, or do you do—you said you don’t really do assignments—
Glenn: Yeah, happens right there at the table.
Josh: Okay, do you want to explain, real quick, what a double closing is in case they didn’t listen to Sharon Vornholt’s podcast?
Glenn: Yeah, we literally buy it. Officially we buy it right there with the end user’s money, so to speak, so it’s not our money, with the end user’s money. Come in and purchases that house, but we buy it and sell it in 5 minutes. It literally is a close to buy and then a close to sell a few minutes later. All happens in the same day, maybe not a few minutes, but it all happens in the same day.
Brandon: Okay, so, here’s the question; Me and Josh were talking about wholesaling the other day and here’s a question I don’t know the answer to, and so maybe you can answer it for me. So, let’s say you find a house and you want to wholesale it and let’s say-- $20,000 you can buy this house for and you go talk to another investor. What happens if the other investor doesn’t end up coming through? What if on the day of closing he backs out? Who pays for, you know, all the title company who had to do their work and all that? Like, does that ever happen, or—
Glenn: I’ve never had it happen. We’ve probably done 50 of them I think, maybe, or so and I’ve never had that happen. I think we stay right with—well, so, here, this is one thing we do. We get a very large deposit. If you’re—if the house is $20,000 we want $5,000 down.
You know, not too long ago we did a deal where we bought a house for—I don’t remember what the numbers were, but we bought it for a price and we ended up selling it for $18,000, but the person, because it was a multiple bid situation, we said—they said “what should our deposit be?” we said “your deposit should be $18,000”, and that’s what they gave. Certified funds $18,000, and if they’re that committed they don’t walk away. So, I don’t take $20, or $100 or even $1,000 on a cash transaction. It’s gotta be something that’s going to hurt if they walk away from it.
Brandon: That’s great.
Glenn: That way they’re committed. So, maybe that’s why that’s never happened to me.
Brandon: No, I think that’s great.
Josh: Yeah, that’s great advice.
Brandon: Well, cool. Let’s talk about marketing a little bit because you—you know, this is funny. I actually see your ads all over the internet for We Buy Houses for your company. I think it’s cause I went to your website and then, you know, Google knows that I’ve been there, but you guys have great ads. I mean, they stand out. So, you guys— I consider you expert marketers so, and obviously you’re getting people, but what can you tell us about your marketing? I guess, what do you do?
Glenn: I gotta be honest. I don’t think we’re expert marketers at all. I think—you know, we found you guys a few months back through Sharon.
Josh: Oh, Alright.
Glenn: I love Sharon. I mean, I was reading Sharon’s articles and I—I’m not a guy that spends a lot of time on blogs, and that kind of stuff, and honestly I’ve seen— you know, there’s a lot of real estate blogs out there. You guys are—BiggerPockets, and I’m not just, you know, I know you’re going to pay me after for saying this, Josh, but it really—in all seriousness it was—it caught my attention as the way we run our business. So, as I was reading Sharon’s articles it was about marketing. Her and I started some dialogue on the blog, and had developed a little friendship there so we kind of exchanged ideas, but I think she’s much more of a master at it than we are. You know, I think we—again, those signs are ridiculous. I don’t love them, but they make the phone ring. We do direct mail now, that’s been successful. Makes the phone ring. We sponsor a lot of organizations around here—baseball teams and that kind of stuff. We’ve purchased—
Amber: We’re part of a local investor group.
Glenn: What’s that?
Amber: We’re part of a local investor group.
Glenn: Yeah, I heard that from one of our mentors early on they said, you know, become the person in your local circle, in your local—we don’t have a REA here. I think they’re still called REA’s around the nation, but we have a group called Action Investor Network that’s here in Albany and it’s a very similar thing. Guys that have the same philosophy as Amber and I do started this organization and now there’s a 100+ people that show up at the meeting all the time, once a month, and they know to come to us. There’s a deal. So, I think getting out there in the neighborhood, making sure people know who you are, make sure your name is out there and do what you say you’re going to do. Have integrity. Do it with character. Don’t be shady and I think your name will get out there and people will know if they want to sell a house they can come to you.
Josh: Yeah, that’s great.
Brandon: That’s awesome.
Josh: Great, hey, I just— I do want to do my famous disclaimers here on the bandit signs cause we talked about it and I had my little smart aleck comment right there. This is a G rated show guys! I can’t say what I want to say.
Josh: But, you know, a lot of folks look at bandit signs, and, you know, they are affective. We’re not going to deny that, but I will say they are illegal in a lot of places. So, if you are putting them out in places where they are not allowed, you know, it’s going to reflect upon you. So, be sure that you’re allowed to use them if you’re thinking about it because it will reflect upon you if you’re doing so otherwise. To your other point on credibility— I can’t reiterate that enough. It’s so important, and particularly since we’re talking about wholesaling.We see this day in and day out on our site, and everywhere on the internet. You see people who just come in, they’re brand new, they just came from some guru and they’re all ready to, you know, jump in and they’re so excited and suddenly they’re talking about 300 deals that they have, and “I’ve got property in all 50 states!” and, you know, c’mon. Gimme a break. You know, seriously. I will never work with you. Most people who have been doing this will never work with you the second you do that. So, you gotta be smart. You gotta be credible, and, you know, I’m very glad that you guys have focused on that right now.
Glenn: It’s so important to be yourself, I think. Every time—we have the same thing, every time a guru comes through the town we get a million phone calls and people say “hey, I want to work with a buyer” and I take them under my wing and I say “look, I’m happy to help you, bring something to us. I’d be happy to step you through it if you have a deal, but just be yourself. Don’t call up being like that. Being sales-y, you know, just be yourself”.
Josh: Yeah. For sure, for sure. And let’s talk—really, really quickly—you talked about having a local group that wasn’t a REA. I think that’s another kind of important point that we should emphasize here for folks. There are—if there are not real estate clubs, REA’s, in your area, and there aren’t any local investor meet ups or anything—start your own. I mean—
Josh: The value of networking face-to-face with your—with local people is unbelievably important, isn’t it?
Glenn: Very much so. I mean, again, just being out there you’ll find deals, you’ll find people. When a deal does come along you’ll know who to talk to and you’ll have the confidence to walk up to somebody and say, “hey, I know we’ve talked a few times, but I’ve got something here”, and you know, you know where to go. So, I think it’s important you do that, and certainly—the guys who started the group here, we were one of the earlier sponsors of the group, but not certainly at the very beginning, but it was just two guys who wanted to have a group here and they did it. It’s—tried to be a great resource for us.
Amber: For buying and selling.
Glenn: Yeah, buying and selling for sure. We’ve bought homes in there and sold homes and wholesaled and all that stuff.
Josh: Yeah, let’s talk a little bit more on that about, you know, the integrity and the thing. In one of your recent blog posts you talked about relationships and how they’re one of the biggest reasons for your success. I think you mentioned that you guys send thank you letters to people, and cards? Can you talk a little bit about that? I guess, why that’s important?
Glenn: Sure, I mean, I think you can read all the books you want, and go to all the seminars you want, but at the end of the day it’s a people business. We’re out there talking to people. We’re buying houses from people. We sell houses to people. We work with Realtors who are people, and on and on and on. We’re all people. So, all of us like to feel appreciated. We all like to feel like we mean something to somebody else, or that we’re doing the right thing and I think behavior that is rewarded is usually repeated. That’s a good parent tip there for us.
Josh: That’s a good quotable quote.
Brandon: It is.
Glenn: Yup, so, it’s—I think that if you can, you know, thank somebody for doing a good job for you—I mean, how often do those realtors get a thank you? You know, they might get a thank you, but we send out a little thing with brownies to them and every time we do a transaction, every time we do a deal they get brownies. I can’t tell you how many times we get a phone call “hey! I got a bunch of brownies here—thanks!” you know, but they remember us, and every time—anytime an agent does a showing at one of our houses, just a showing, we send a card and it has our logo and it says, thanks for—and it’s a standard card. After they’ve gone to a few they see they get the same one, but it has their name on it and it just says “thank you for doing this”.
So, I had an interesting thing that happened not too long ago—there was someone who came to work for us, and when she came to work for us of course the brokerage was not happy in losing her. Especially to an investment company. You know, we’re not a brokerage, but we needed consultants to work our deals.
So, they were not happy so they were trying everything they could to sort of bash us and all I heard was—I didn’t hear the details, but I heard that, you know, they were saying some things that made us look not so favorable, and I take a lot of pride, and Amber does too, in our reputation. So, a lot of people, I think, would have called and been confrontational and said “why did you say that? Why did you do that? Why did you say that about us?” I took a few days to think about it and I wrote them each a card and the card just said “I heard some things and I wasn’t sure what was said, but I wanted to make sure we were still good”, because obviously we were going to have a long relationship together. We had done business in the past, we were going to do business in the future, but “here’s some cookies to say no hard feelings. I know it’s business, and all’s fair in love and war, but I just wanted to make sure that you knew that, you know, no hard feelings on my part. I understand that it’s hard to lose somebody”. I got phone calls from every one of those people saying “I didn’t say anything bad, I just, you know, I was—“ and I said, “I know, it’s all good. I’m just letting you know” and so I think I tried to take a situation that, you know, could have been bad and I could have burned some bridges with some top agents in the area, and I turned it around to something that—they remember that we’re a decent company to work with.
Josh: That’s great. Great story.
Josh: For sure. Alright, so, we’re starting to run out, a little bit, on time here and I know I definitely wanted to talk about the buildup of your team. So, we’re going to try to compress that into a short, little segment here, but let’s talk about, you know, the actual growth. The emergence of a team beyond the two of you, and then, you know, potentially—if you can get into tips that you have on managing your team. You know, you’ve got these consultants, the contractors and everybody else. So, yeah, I’ll let you just run with it.
Glenn: Okay. I think we started out when we, again it was Amber and I, when we started to expand we realized we had too much on our plate. We couldn’t handle all the clerical stuff. We hired an office manager. She came and worked right in our home, right at our kitchen table. Her name is Susan, and she’s been with us for three and a half years. She has been the rock, kind of the cornerstone, of what holds everything together around here so that was the best decision and investment that we ever made. It was a very long interview process cause it was going to be someone who was going to be in our home and we wanted to make sure that we didn’t go through this again. We didn’t want to be professional interviewers. We wanted to have the right person and we made the right choice.
You know, from there we’ve definitely been through our share of people to try and find the right team members, and, again just like finding contractors, it’s the same thing with your team members. Things changed for us and we found the right inside consultant.
We have a woman here now named Heidi that has been doing just a tremendous amount of work bringing in new deals and we now—I’ve released the reigns to let her sell the properties. That was difficult for me to do because that was always my side of the business, but I think any successful business owner knows that to grow you have to start to trust other people to do your work for you once you train them. So, she has been a wonderful student and has learned a lot about what we do. So, that started from there, and we’ve hired a few other consultants on after her.
You know, we now have—we’ve been through our share of project managers. We now recently brought in a guy named Bill, who’s Amber’s assistant right now, as a project manager and we are grooming him to take over a lot of the jobs to give us some freedom so we can focus more on marketing to bring in better, sweeter deals for ourselves and for the company.
So, you know, it’s tough to do it in a quick segment, but just—I guess, it’s just like the dating thing. You want to find the right people. It’s going to take time. When you find the right people take care of them. Same thing I just said with the people that we do business with. Make them feel appreciated. I think it’s important that you make them feel that. Do something special. Buy them lunch once in a while. Have a Christmas party. “Oh, that’s gonna cost me $500”. So what? You know, spend time, invest in your people, cause that’s your future. When you find the right people do that. On the other side of the coin when you know your gut starts telling you it’s the wrong person you gotta cut that cord. Even though it’s not fun sometimes. So, that’s the best way you can build your team. Any thoughts on that, babe?
Amber: I would say, also, don’t make a decision out of desperation.
Glenn: Ah, yes.
Amber: which we’ve learned the hard way.
Glenn: Yes, yes, yes, yes, yes.
Amber: Sometimes it’s easier just to grab the first person cause they might sound good on paper, but without doing your full due diligence—with Susan we took, I think it was a three—
Glenn: At least.
Amber: A three-part interview. We spent the whole day with her one day taking her out showing her the properties. It was down to her and one other girl and we definitely made the right decision because we took the time to get to know her and the same is true whether you’re hiring contractors—you know, sometimes it’s kind of a pain in the butt to go out and meet three different contractors at a job because it’s three different appointments and three different hours out of your schedule, but if you hire the right one up front? Oh my gosh, does it save you tons of headaches in the long run.
Glenn: It’s exactly like what I said—we kind of started with this today. It was about investing your time. Now you’re investing your time in people. In other people.
Glenn: and I think if you do that and you invest it wisely and do your homework and make the tough decisions when you have to you can still—you start to relieve pressure off yourself so you don’t have to work 85 hours a day, and, man— it starts to feel a little different. So, that’s important in team building. Just appreciate your people. When you have good people appreciate them and build them and train them. Make sure they know what the heck they’re doing cause if they don’t they’re going to be confused.
Amber: And trust your gut.
Glenn: Yeah, and trust your gut! Amber just said that. That’s a great point. Your—all of our guts are pretty smart.
Glenn: You know? So, just trust em.
Josh: Hey, really quick, I just want to chime in and say—hey Brandon? I really appreciate you man.
Brandon: Thank you, Josh.
Glenn: If I could somehow get commission for that—
Brandon: Yeah, can I get some cookies, or brownies or something?
Josh: I’m going to have to send you some brownies. Alright, now, listen, that’s great, great, great advice. With that, we’re going to segue to our final segment here which is our usual thing here.
Brandon: The famous four.
Josh: Why don’t we—the famous four. Whatever, we need a title for it.
Brandon: Yeah, we do.
Josh: but, let’s get to the four final questions here, and both of you are welcome to answer independently if need be. Let’s talk about your favorite real estate book. What would that be?
Glenn: I don’t know if I have a favorite real estate book…
Josh: The BiggerPockets Book on Flipping Houses? Yeah, me too! That’s a great book, Glenn!
Glenn: Hey, I bought that, by the way. I was supporting.
Glenn: It was good, I did read it, that was good.
Josh: There you go.
Glenn: I’ve listened to a lot more seminars, I think, than I have read books, but I’ve—not one is jumping out at me right now, but I certainly—I learn a little bit from all of them. There’s always a little golden nugget whenever I read, or I listen to something, I try to find that golden nugget. I don’t really have something off the tip of my tongue that—
Amber: I would say the same thing that Glenn just said, especially—somebody was just asking me a question the other day about “what do you think is the most important thing to do?” and my answer was “be educated, educate yourself in the field” and whether it’s that you’re paying $10 for a book, or $10,000 to be personally coached by someone. Let’s just say it was $10,000. If you get one nugget out of that relationship and that nugget helps you to flip 25 houses in the next few years that was so worth it. So, I don’t know that there’s one particular one that’s the best, it’s just really knowing your field and being educated.
Glenn: With the BiggerPockets book, certainly.
Josh: What about business books? Non-real estate business books? Anything hop out or…?
Glenn: You know, probably for me I think one of the ones that changed my life was back reading Stephen Covey, The 7 Habits of Highly Effective People. That was one that—
[baby coo’s in the background]
Josh: She liked it by the way.
Amber: The baby liked that one.
Glenn: That was one, I think, and if you—a lot of the different relationship stuff we do is probably driven off of that. As I look back, probably 15 years ago I read that book, but that’s, you know, that’s one that’s kind of always stuck with me. Again, investing your time in the right place. Not that I always do, but I certainly try.
Amber: I like Think and Grow Rich. That was a really good book, and I think in addition to learning about your field I think personal development and personal growth is also a very big key because there’s a lot of things about each of us as individuals that can hold us back, like, fear of rejection. They might not talk about in a real estate book but if you can grow as a person that can be really advantageous, not only to your business, but your whole life.
Glenn: I think Amber’s really favorite book, though, is My Husband is Awesome. That’s her favorite book so—
Brandon: Wait, how do I get a copy of that? I need a copy of that.
Josh: Yeah, I need to get one myself.
Glenn: Yeah, that really is a good one, so—
Amber: The Four Agreements is a really good one for personal development.
Glenn: What’s that?
Amber: The Four Agreements.
Glenn: Yeah, The Four Agreements was a good book too for personal development.
Josh: How about hobbies? Any—
Amber: Scuba diving!
Glenn: Yeah, we’re avid scuba divers. About a year ago this time we were in Thailand scuba diving. We like a lot of adventure stuff. We’ve been skydiving in Aruba—
Amber: Kite Surfing.
Glenn: Kite Surfing, we—
Amber: We rode elephants.
Glenn: We swim with sharks, yeah, we rode elephants.
Amber: Wild monkeys.
Glenn: Yeah, wild monkeys, and crocodiles and all that.
Josh: Fear is not a factor with you.
Amber: Not so much.
Glenn: No, no, we kinda—yeah, it makes our private investors kind of nervous sometimes, but we show our figures after we return. So…
Josh: I would take an insurance policy out on you guys if I were one of those private investors.
Glenn: I know, I know, nah, we enjoy our lives and our kids are a big part of our lives. That’s probably our biggest hobby now that they’re all in sports and they do things. Well, one, her only sport is spitting up, but it’s—you know, our kids are our lives. They’re our number one thing.
Amber: With the real estate, though, I do have to say. I really like taking something ugly and making it beautiful. So, even, you know, these run down houses. We’re really helping communities look better and we’re increasing, you know, just the overall feel of the community. Not to mention how many jobs we provide the community as well.
Glenn: I’m her biggest project in taking something ugly and making it prettier.
Amber: Well, that goes without saying.
Glenn: I’m a lifelong project for her.
Josh: Nice. Alright, so, last question before we wrap up here. This is one that I ask everybody. What do you believe, and each of you can answer this, I’d love to get both of your opinions, what do you believe sets successful investors apart from the non-successful ones?
Glenn: Yeah, that was my answer, too.
Glenn: I mean, just, I think just taking action. The very first real estate seminar I ever bought, I don’t think the guy’s even around—Dave Delgado, I think? Whatever it was. This was back in 1987. Don’t tell even me you weren’t born yet or I’m gonna—
Josh: Barely. I was about your daughter’s age there.
Glenn: Don’t like you at all anymore. That was the first thing I ever bought off the TV and they upsold me on the phone, I think I spent $600-$700, but I learned a line. Here’s the nugget I learned in that. I didn’t use anything else in there, but learned a nugget. He said “action equals results, but massive action equals massive results”. That always stuck with me. So, I paid $600 for that, 25 years ago for that, but it always stuck with me and I think that’s always driven me to know that if I take little bits of actions that I’ll have a little bit of results, but if I take massive action I can get massive results. So, you decide what you want to do. When you start your business, or in life, just decide what you wanna do and you’ll get results if you take action. If you take no action, and just read, and just—if you read BiggerPockets every day, but never make a phone call? You’ll never own a piece of real estate.
Amber: And it can be really scary doing your first deal, or even your first several deals. We kind of went in with the sink or swim mentality.
Glenn: I gotta tell you this quick story as we’re wrapping up—I, it’ll be appropriate, it’ll be good. That one house we did that was—that we paid $33,000 on. During the open house, the woman comes in, she’s probably 75 years old from across the street. Now picture: she’s kind of a grandma type, and she walks in and she says, “we’ve been watching you guys work all month. You know what you two have?” Now, she’s 75 years old. I said, “what’s that?” She said, “you guys have b*lls.”. I go, “jeez! You can’t say that!” and she said, “no, I just wanted…” and you know, I laugh about it because of who said it and how it was said in the context. We all laughed hysterically, but, you know, if you take action and you can go after some things and it takes some courage to do it, but if you just take a little bit of steps you could do what we do. Anybody can do what we do, you just have to do it.
Josh: Yep. That’s great, that’s great. Well, listen guys. It’s been a pleasure having you, we really appreciate your time and I think people are definitely going to get some good nuggets out of this show as well. So, thanks so much.
Glenn: Yeah, thank you. I want to thank you guys both for doing this BiggerPockets, like I said, never been attracted to any big blogs before but I’ve been really impressed with what you guys put together so keep up the good work.
Josh: Thank you!
Amber: Yeah, thank you guys.
Brandon: Thank you, guys.
Josh: And that was our show with Glenn and Amber Schworm.
Josh:So, quick, quick story. We actually recorded this—we’re recording this after about a week after we did the interview with Glenn and Amber and in the mail today, I kid you not, was a package with two chocolate brownies and a thank you card from Glenn and Amber.
Josh: And, first of all, those brownies were awesome.
Brandon: They were.
Josh: I enjoyed them, Brandon enjoyed them, my kids, and it just goes to show you that these guys are the real deal. They’re actually doing what they say they do which is, I don’t know—it’s pretty awesome. It’s rare that you see it, huh?
Brandon: It is! It’s great, though, and it’s really inspired me. Like, I totally want to start doing that now with everybody I come in contact with so if you get some brownies from me you can thank Glenn.
Brandon: And Amber.
Josh: Yes, yes, yes, and of course, Brandon, living in Washington State you might enjoy those brownies more than others.[laughter]
Brandon: Get it?
Josh: Listen, I hope it goes to show you that even if you’re broke, even if you’re in debt, even if you’re new to this game you can succeed. If you just jump in and get yourself educated and that’s exactly what BiggerPockets is all about. Real estate investing education. As always you can become part of the community by heading over to BiggerPockets.com and signing up for a free membership, then be sure to head over to the forums and leave a new member introduction and let us know a little bit about who you are and what you’re doing. Also, big thanks to everybody for leaving us reviews on the iTunes store, and for subscribing to the show. We really, really appreciate it. We appreciate all the reviews we’ve been getting, and if you like the show, but haven’t left a review yet, please do. Jump over to iTunes, help us out and do so. Every single one of those ratings help. Every time you hit the subscribe button on iTunes it helps us out so we definitely appreciate it. Finally, be sure to connect with us over on Facebook at Facebook.com/BiggerPockets and until next time this is Joshua Dorkin signing off.
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