Speaker 1:
Welcome to the Redfish, Healthy, Wealthy, and Wise podcast. Our focus is to deliver information that helps you become healthy, wealthy, and wise. This podcast is sponsored by Redfish Capital Management, the views and opinions expressed here and do not necessarily represent the views and opinions of SCF securities, Inc, or any SCF related entity. This material is for general information only and is not intended [00:00:30] to provide specific advice or recommendations for any individual securities offer through SCF securities, Inc. Member FINRA, S I P C investment advisory services offered through SCF investment advisories Inc office at 1 55 east Shaw in Fresno, California, SCF securities, Inc, and Redfish Capital Management are independently owned and operated. SCF is not associated with other podcasts. And the messages contained within. Brad [00:01:00] Murrill and Redfish Capital does not offer legal or tax advice. This material is not intended to replace the advice of a qualified tax advisor or attorney please consult legal or tax professionals for specific information regarding your individual situation now for your host, Brad Murrill.
Speaker 2:
All right, everybody. Hi and welcome to the very first [00:01:30] time. Very first time that I've done the video recording with the podcast. And I brought in the prettiest space. I know because we're doing video, I've got my friend Craig Bundren here with us today. And so this is the new way that we're doing the Redfish healthy, we and podcast slash video. So I hope you like it. Um, as I had mentioned in the last pod, I had talked about Craig, um, a little bit because we're doing a series on real estate investing. We talked a [00:02:00] lot about res and how different people can invest in it. And as I mentioned in the pod, I wanted to talk a little bit about something that I get asked a lot about, which is house flipping. People are always saying, oh, I'm thinking about trying this. And I'm thinking about trying this and what I can't help, but to think is don't do it.
Speaker 3:
<laugh>
Speaker 2:
Don't do it. But the reason why I brought Craig in here is that, uh, he's been doing it, uh, for quite some time is, has some success. So I just wanna kind of jump into this a little bit, but I wanna always start first with [00:02:30] a little intro to you where you grew up, where you went to school, what you're doing now. Cause you're not primarily into house flipping.
Speaker 3:
No, I, uh, I grew up here in, in Houston. Yeah. I grew up in the spring branch area and um, my dad, uh, owned a commercial painting business and he had been in business with his father and then stepped out on his own and opened. So
Speaker 2:
This is third generation. I didn't know
Speaker 3:
That I am third generation, third generation painter. <laugh>
Speaker 2:
Woo. No, but [00:03:00] that's cool. I didn't know that, that this company's been around that long.
Speaker 3:
Yeah. Yeah. My dad was doing it. Uh, there's a lot of buildings. It's really neat to look back that, uh, he worked on in the mm-hmm <affirmative> in the downtown skyline. Um, but I grew up in the business helping, uh, throughout high school years. Right. Uh, during summers, uh, and then when I got a little older driving trucks and then at some point I realized that I didn't wanna be in the family business and, and I, I was gonna go do something else and, and something really cool. And I joined something really cool. [00:03:30] I joined the Navy. How
Speaker 2:
Cool was the Navy?
Speaker 3:
Oh yeah. So I came back from the Navy and realized that the family business was pretty cool. Right, right.
Speaker 2:
I
Speaker 3:
Get that. So there was a lesson there, but, um, and then over, over the years, uh, you know, worked, worked for the company and then, uh, as time progressed, just, uh, moved up mm-hmm <affirmative> uh, I did all the, uh, I've done everything in the, in the business except the accounting. Okay. And, uh, accounting was always a little foreign to me. Mm-hmm <affirmative> it was a little difficult. [00:04:00] Um, I've learned it now. I can't do, I'm not, not a choice. I'm not gonna be the guy, but no, but I seems
Speaker 2:
To be familiar with it.
Speaker 3:
Yeah, definitely. And I didn't learn that till later and anybody that's in business, I think that that is most one of the most important things to know. You've gotta know the numbers. You've gotta be able to figure out how you're getting there. Yeah. Otherwise it's just a hobby that you're getting paid for, because you're really not paying. Ooh, I
Speaker 2:
Like that a hobby you're getting paid for <laugh> so you end up taking then over it's bun painting. Mm-hmm <affirmative> uh, so you end up kind of taking, what are some of the [00:04:30] buildings like? So we're here in the Cypress area. So what are some of the buildings that you, so when someone's driving by and you can say, oh, you went by the such and such building, you know, we did that. So they would have an example of some of, some of your work.
Speaker 3:
Uh, if it's, if here in Cyprus, we did the Bridgeland high school, big four story high school there're over off 99. Okay. Everyone
Speaker 2:
Knows that out here.
Speaker 3:
You bet we did, uh, reliant stadium. Okay. Um, that was, that was around the, the turn of 2000, I guess.
Speaker 2:
Yeah. It's
Speaker 3:
Been a while. Um, uh, we've done a lot of buildings in [00:05:00] the med center. Um, there's my wife gets very, very tired of me pointing at buildings as we're driving down the road. Oh, we worked on that one. I did that one
Speaker 2:
Stacy stop that
Speaker 3:
<laugh> <laugh>
Speaker 2:
As we'll come obvious. We've known each other for quite some time, so we're all good friends. So you've got this successful business going. Um, how did you get into then the real estate side or decide, you know what I want to at least look at buying a house, fixing it up, selling it. How did all that start?
Speaker 3:
[00:05:30] So I came back, uh, it, it's funny because we'll go back to the Navy here. Okay. I came back from the Navy and, um, I didn't have, uh, I didn't plan everything out well, and I didn't really have anywhere to go. I didn't have any, when you go into the Navy, you don't make, I mean, they're housing, you and feeding you. They're not paying you much. Right. I got you. And anything they did pay me was not going to, to a savings account for me. It was going to my, my party fund and, um, understand
Speaker 2:
That sounds like a good Navy guy.
Speaker 3:
<laugh> so when I came back, [00:06:00] I, I didn't have a plan. I, I came back and my parents said, you can come live with us. He lived with us, save up, go back to work for the company, save up and you can get your apartment. So I moved back in and, uh, that was not a fun, uh, a fun thing. I appreciate it.
Speaker 2:
So wait, going back to live with mom and dad slash wasn't fun. No. Okay. Just, just,
Speaker 3:
Just, you know, I'll take that. No.
Speaker 2:
Right. OK.
Speaker 3:
So, uh, I, I I've been away for a long time. And then I, you [00:06:30] know, I get back into Houston. My friends are all out, having fun. I'm going out, having fun with my friends. And then in the morning I wake up to go to work to my dad, yelling up the stair, Craig, get up it's time to go to work. Right. I'm like, okay, this sucks. There's no way. Right? Yeah. So I, I started saving up and what I thought was gonna be six months, started moving a lot quicker. I'm I'm working overtime. I'm doing everything I can cause I gotta get outta that house because it's not a healthy environment for me or my parents. I get
Speaker 2:
It probably more so for your parents, but I correct.
Speaker 3:
<laugh> and so, uh, then I, I moved into an apartment and had [00:07:00] fun with the apartment life, but I, I wanted a house. I wanted something, something cool. And, um, in spring branch over on the same, uh, the street that my parents lived on, continued through a major street. So it wasn't right down the street from this
Speaker 2:
Is next to Springwood high school. Correct. Kind in that area.
Speaker 3:
Yeah. There's a, there was a street called metronome and it it's stopped and started it and when it hit Gesner and so on the other side, there was this house and it was all boarded up and it just looked like it was about to fall down. And [00:07:30] so we started calling on and this was the days before internet was, was all out. Right. Um, back when real estate agents had the little, just pages of books.
Speaker 2:
Right. And they'd read about it. Yeah.
Speaker 3:
Uh, so we started trying to find out who owned that house? My dad, uh, when, before he went into business with his father, he had an uncle that was a carpenter mm-hmm <affirmative>. And so my dad had a choice of becoming either a carpenter or a pink contractor. He chose to go with, with his dad and did the painting. But overall, the [00:08:00] summers he'd learned as carpentry skills. My dad was always building stuff.
Speaker 2:
I got it. So you kind of grew up around tools, woodwork. I grew up doing things
Speaker 3:
Rounded. I wasn't really doing it myself. Okay. My dad had all the knowledge, had everything. Right. So, uh, long story short I'll shorten that we, uh, we found out who, who owned that it was a, uh, bank repo mm-hmm <affirmative>. But I mean, this thing was, I mean, this was horrible, pretty
Speaker 2:
Gnarly.
Speaker 3:
And it was on a demolition list for the city. The city was to the, that bad, [00:08:30] where they were gonna demo this house.
Speaker 2:
So the lot I'm thinking is worth more than, I mean, it's worth a lot.
Speaker 3:
Value's, that's what they were saying. Okay. And it was a really, it was a kind of a modern looking house for, for the time it was built in the seventies. It was actually built by a Houston DJ here and he died in a plane crash
Speaker 2:
Really.
Speaker 3:
And I can't remember what his name was, but he, it was for like 95.7 when it was the country. Yeah.
Speaker 2:
Yeah. K
Speaker 3:
I K K. And, uh, yeah, so he had died in there. [00:09:00] And so, you know, I, I had the whole, it haunted stuff and, and, and everything. Well,
Speaker 2:
I can understand that. Absolutely.
Speaker 3:
But, um, we found out, uh, uh, who owned the house and purchased the house and I'm a single guy. Yeah. So I lived in a back room, I fixed up one bathroom and a back room and I lived there. So
Speaker 2:
You fixed it up with the help of your dad? Yes. I mean, just coming in, what do I need to
Speaker 3:
Do here? Yes. Okay. He helped me, uh, so I didn't have money. Yeah. And so he really, he put his time in there. He helped me, [00:09:30] you know, time and he was teaching me how to do stuff. Um, and we went in, we put in, uh, these, uh, fake wood floors that per like Pergo. Ah, yeah. Yeah. And then we put a tile in the kitchen, um, carpet, nice green nineties carpet. Oh, was
Speaker 2: It SHA, SHA? Would've been, it wasn't quite shad. I mean, you had the seventies home going. So
Speaker 3:
It was, it was, it was sweet. It was nineties throwing up everywhere, but it was, uh, got it. I got it, but I, I could [00:10:00] live in it and it didn't matter. And, and you know, I've, I've noticed when you're young or when I was young, I just didn't care. Absolutely. Uh, you know, I didn't have heat and not that it gets that cold in Houston who needs heat,
Speaker 2:
But
Speaker 3:
Who needs heat during the mid of winter? You know, I'm just throwing blankets all over the place and whatever
Speaker 2:
It takes,
Speaker 3:
Man. And, um, most people wouldn't wanna live in that, but it was, it was, it was easy for me. And so I fixed it up. I lived in it for a while and then when I sold it, it was a payday. [00:10:30] I mean, I, I,
Speaker 2:
So you made, you made money on the fact that, so you didn't go into this house with the intention of fix it. Hey, I'm gonna flip it. I'm gonna fix it out. And
Speaker 3:
Stuff did not, did not think about it as a flip, maybe in the back of my mind, because I've always been interested right. In real estate. Um, as a kid, my, my parents would always drive around. My mom loved looking at houses so I can, can't tell you how many houses I've been in as a kid. Mom would just go through and we'd walk 'em. Um, so there was always that interest for me, but there was not the intention [00:11:00] that, Hey, I'm gonna buy this house. I'm gonna flip it and I'm gonna make some money. But as I started talking to some of my mom's friends, there's couples that they knew that got together and Stacy would never do this. <laugh> move into a house, fix it up right. Then go to the next bigger house. And then 10 31 get into a bigger house. Right. And then keep doing that until they get in this gargantuan owls, right. Or whatever, uh, size they want or whatever equity they want. But that's what I did. I, I sold that. And then this was during the time that they were [00:11:30] given, um, loans to, to anybody for, for loans.
Speaker 2:
Yeah. I think the loan check at that time is you come in, they see if you have a pulse, if you'd have a pulse, there you go.
Speaker 3:
And I, and I had a water cash. And so I went and bought in the next house and the next house was way bigger way nicer, great neighborhood over off Memorial, spring branch, over off Memorial and Kirkwood.
Speaker 2:
Yeah. That's still country spring ranch school district. Yeah. Yeah, yeah. That would've been, um, old Westchester or Stratford high school.
Speaker 3:
So, uh, I guess area [00:12:00] I'm, I'm living in a nice house at that point. Right. And much nicer than I should have been. And uh, okay. And, uh, so I lived in that house for a while and then decided that I needed to, to downsize. Okay. I kind of changed my lifestyle a little bit. Um, but I always kept that mentality of the, I like the fixing, the buying things. I went and got my real estate license. Um, I wanted to learn,
Speaker 2:
I had no I've known you for a long time. I had no idea. I knew that Stacy was giving me, you have your
Speaker 3:
Real estate license. Oh yeah. I've had it for a long time. So that was my thing I wanted [00:12:30] to learn about real estate. So the best way to learn about real estate is go get real estate license.
Speaker 2:
Makes
Speaker 3:
Sense. No, don't do that. Yeah.
Speaker 2:
Makes a lot of sense. Go pay for an education that you
Speaker 3:
Won't use. Right? Don't do it. No. Well, I mean, I use it, but the fact is becoming a realtor, puts you in a whole different category. So if, if you are an investor, stay an investor, you can build your team and become an investor. You don't need to get your real estate lives. If you want it, go get it. If it's something you've always dreamed of, but there, there comes. [00:13:00] Um, you have to live to a higher standard as a realtor because you now have a fiduciary responsibility to people.
Speaker 2:
Yeah, I get it.
Speaker 3:
I get it. Um, so it's more than just, uh, an investor. It's the
Speaker 2:
Ethical
Speaker 3:
Side of it. There there's, I don't want anybody to be unethical. I'm not gonna go unethical. No, but there's that, that side to it where you're held to, um, higher standard of checks and balances and people will mm-hmm <affirmative> uh, exploit those if they can understood a
Speaker 2:
Little bit understood.
Speaker 3:
[00:13:30] Um, but it's not something that you have to do. Got
Speaker 2:
It. All right. So now we're through the second house. Did you end up doing any work on that house or it was pretty much didn't buy another clunker. No,
Speaker 3:
I didn't buy another clunker. I bought, I bought one to impress. Okay. And, uh, and, and it was only impressive for a short amount of time. Cause reality hit and I needed to move on and
Speaker 2:
Knowing you a little bit, I'm guessing you bought it to impress some of the ladies, but then the problem was the ladies always got to know you. Is that what happened?
Speaker 3:
Thank you.
Speaker 2:
You're
Speaker 3:
Absolutely. Thank you.
Speaker 2:
[00:14:00] Um, alright. So you go through that house. Now you're into your third house, but that's, you're not really making a living. You make some money, but it's not, Hey, I could continue to do this as a side hustle or whatever. Right. When did that idea cross your mind? It's like, okay. I, I enjoy this number one. I think I have some skill at this number two, number three, let me start kind of doing this or I'm not living in the houses, but let me actually start buying a house, fixing up and [00:14:30] then selling it.
Speaker 3:
I always talked about it that, Hey, I'm gonna start doing this. Hey, I'm gonna start doing this. And you know, and then let's fast forward a few years I got married and, and Stacy, um, Stacy was interested in it, but Stacy, wasn't going to grab me and point my face this direction and go, go do it, Uhhuh, go do it. Mm-hmm <affirmative>. I just kind of played around with it for a long time. And then finally I
Speaker 2:
Said, by playing around with it, let me you one at a time, you pick up a house, fix that, do it every couple years.
Speaker 3:
And, and, and just try to look through MLS, uh, the multiple listing service [00:15:00] Uhhuh, uh, I would try to, to talk to people. Maybe I could find something and everybody talks about buying hold. You wanna buy and hold, you wanna buy a hold? You wanna get a house? You wanna hold it? And then you're going to bring in. Now you got a monthly income and you know, they're shooting for around $500 a month.
Speaker 2:
These are the guys who wanna rent it.
Speaker 3:
Yeah. And so the flip people, people look at it as too much work. Mm-hmm, <affirmative>, it's too much work, buy and hold. If you buy and hold and you get five or six of those, and then you bringing in an income, you don't have to go out and find a [00:15:30] flip. You don't have to go swing a hammer. You don't have to do anything. It's just yep. Money coming in. Um, my, my personality's a little bit bigger. I like the, the, the action of the,
Speaker 2:
The needle. Yeah, I
Speaker 3:
Gotcha. And so the flip always okay. Was really attractive to me. Um, I've also not a stock market or mm-hmm <affirmative> um, any other kind of investment type person. I like tangible assets. Mm-hmm <affirmative> and I was looked at a house as [00:16:00] let's say, the works happens, and I've got this house. I've still got the house. Absolutely. I've got the house. Absolutely. If the house burns in, I've got insurance on it. Yep. If people steal from it, I've got insurance on it. Yep. There's there's just so many levels of protection there. Mm-hmm <affirmative> the house could appreciate, it. Could depreciate it really haven't seen that mm-hmm <affirmative> much, you know, and, and when it does it recovers fast, and then if the, if the,
Speaker 2:
In the Houston let's clarify in the Houston area more in
Speaker 3:
Yeah. And then if, if it hits the fan and, [00:16:30] and everything goes to hell, you can rent it.
Speaker 2:
Right.
Speaker 3:
So I'm I'm. I just, I like it. I like real estate. Um, got it. It's, it's something that, and you know, I could live in, if I needed to
Speaker 2:
Some of the sages advice I've heard from people who write books on investing and talk about investing is number one, invest in what, you know, I mean, invest in what you know, and obviously, you know, real estate. So you've now kind of branched out. You're finding houses, you're fixing them up. I would think in the [00:17:00] beginning. So in the very beginning you had that, I'll call it a flop house for lack of better word, and you're fixing up what you need to, you needed the toilet to work. So you're gonna fix that up now. I think so here we are in 2022, I'm sure you have a, a process in place for what you look for in a house, what you need to come in and do. And then how do you get that done and then on a budget. So I'm sure you have some kind of a process in place you want, what do you look for? Let's start with that. The beginning of the process, you're looking, [00:17:30] you've got cash on hand. You want to put some money, some equity into a piece of at home. What are you looking for?
Speaker 3:
It there's a lot of depends. There's a lot of depends on what your situation is and, and what you want to do. Some people go out and buy 'em and they're going to spend their weekends for the next X amount of months, right. Working on this with their wife, and maybe it'll be a bonding experience or they can teach their kids something or a
Speaker 2:
Divorce experience.
Speaker 3:
Yeah. Right. So it could be a good experience. It could be a, a bad experience. [00:18:00] Right. Um, so it really depends on, there's so many different ways to do it in with, with real estate and with the flip for me. Um, so I joined an investing group. I, I joined a group of people that, that do investing. Now. They are more of a buy and hold group. And
Speaker 2:
Is this real estate investing, would you say?
Speaker 3:
Okay. And so they're more of a buy and whole group. And then they also do apartment investing, which [00:18:30] I have not done yet, but intend on doing it at some point. But right now the, the, the flip's sexy to me. So I understand. So I do that, the other thing, um, so I, as I networked and got to know people, hang out with people in the real estate industry start sure. Start, you know, that's where you really get, you can read all the books and all that, but until you go put yourself out there, yeah. Go look at some houses, go look at, at, at, go join. Some groups be around that, roll around in it,
Speaker 2:
Just get immersed [00:19:00] in it.
Speaker 3:
Yes. And then people, people love to share their experience. Mm-hmm, <affirmative> people love to share their knowledge. Um, they just can't help it. People do it. And they are so proud of themselves that they wanna share it. Right. I mean, I'm, I'm the same way I do something like, wow, I did really good on this. This is
Speaker 2:
What I did. Sure.
Speaker 3:
Um, so I, the way I do it is we buy from wholesalers. So you can go find, you know, [00:19:30] you see all the signs on the road, home investors, we buy ugly houses. Yes. The, we buy ugly house people. Yes. Okay. That's a wholesaler. And then, um, you'll see. Um, when you pull up to a stoplight, somebody will have a stick stuck in the ground. Yep. It says, I buy houses. Got it. You see it on a truck, buy houses. People are calling them, trying to sell 'em the houses. Mm-hmm, <affirmative>, I'm calling those people, trying to buy the houses that people are selling them.
Speaker 2:
Okay. So they're, they're working as a, as an I between, or are they selling you their inventory?
Speaker 3:
So a lot [00:20:00] of the wholesale, when the market's really good, some of those wholesalers are doing their own flipping. Okay. But there's other times they get too many of 'em. Yeah. Or they've they they're running low on capital there's there's million. One reasons. Yeah. Why they, why they, they move this property or that property. But if you prove to them that you're a real buyer and that you can work with them, and then once you build that trust with them, now they call me mm-hmm <affirmative> Hey, I've picked this up. Uh, are you interested? Come look at it. And what they do is the wholesaler goes to, they do the, [00:20:30] the legwork on finding it. They go to, they look up divorce, uh, place, uh, they look in the courthouse to find a divorce record. That's
Speaker 2:
That's nice. So cuz in my head, I always, I always see, let's say with you driving around, you see a house. Oh, let me look into that one. You've got people calling you now because they've
Speaker 3:
Got the supply. They call me. Oh, that's great. But there's other times that I call them and Hey, I'm ready. Hey, I'm ready. And I'll call four or five of those. Hey, I'm ready. Right. And then maybe a month, maybe two [00:21:00] months, depending on the market, they'll reach out and go, Hey, if you're still looking, I've got XYZ. Come look at. But it's from uh, parents, elderly parents. Yes. Uh, get moved into an assisted living. Right. Or they pass on and the kids live in, in New Mexico and they're like, I'm not coming back. Mm-hmm <affirmative> I'm not going back here. Just we'll we'll sell it to a wholesaler and we don't have to deal with it, stay done with it. So the wholesaler goes in there, puts it under contract and they make the contract assignable. So okay. They just basically for [00:21:30] a fee, turn the contract over to me. Mm-hmm <affirmative> and then I sign for it and I become the lawful person on that contract. They're just
Speaker 2:
Right.
Speaker 3:
Turning it over.
Speaker 2:
So would you let's let's get into bras tax here. So you're out, you're looking at a house. What are you looking for when you're looking at a house? Cause obviously you're a flipper you're looking to sell it. Is there anything that you're kind of looking for that you've learned that you can identify when you see a piece of property, when you see an asset [00:22:00] and go, all right, I think I could do this, this, this, and make this worth 10% more, 20% more, whatever. It may be
Speaker 3:
To an extent. I, I, I wanna say and throw this out there. If you wanna flip houses, Don't watch HG TV. Don't watch zombie house flipper. Don't want, those are TV shows. That's all, those are TV shows.
Speaker 2:
So that's not what the real world is like. It's not like we're seeing it
Speaker 3:
On TV. No, no, that's really cool. [00:22:30] Note of that. And, and I would love to, to do that. The houses that I buy are the three bedroom, two bath houses, two car garage. I, I venture on both sides of that. Mm-hmm <affirmative> but that's about what you're looking for. Um, in a, in a medium income neighborhood, right? Um, you can go buy the really nice house and you'll probably make a bigger spread on it, but you're gonna spend a lot more and you've gotta do really good work. But [00:23:00] when, when I walk into a house, I don't walk in and go, okay, I'm gonna tear out that wall and we're gonna put a grand chandelier hair. And I think that I could do this cute little art niche and paint job,
Speaker 2:
Which makes sense. Cause I would think the less work you put into it, the, the that's just, uh, overhead. That's it is.
Speaker 3:
We're just, you've got a budget. You've got a budget that you want to hit. You think that you're gonna be able to sell this house for X amount. Okay. I do. So
Speaker 2:
That's really, that's really first you think you could sell it worth, you determine what it's worth. The wholesaler says, this [00:23:30] is what I'm selling it for. And then you're, you're trying to fill that gap and sell it obviously for as much as you can with as minimal with the minimal amount of work involved,
Speaker 3:
The wholesaler says I'm gonna sell this house for X. Yeah. And you try to negotiate X as much as you can. You can negotiate with wholesaler.
Speaker 2:
Do they move much?
Speaker 3:
Sometimes mm-hmm <affirmative> sometimes they'll move a little bit. It depends. Every situation is different, but in a hot market. Yeah. It's hard to find the wholesaler and yeah, you, if you do go ahead and buy it because they're not gonna, they're not gonna move. They know that they're gonna call the next guy. Yeah. [00:24:00] And he's gonna get it or the next lady is gonna get it. Um, so I look at the, at the house, what the ARV after repair value is gonna be. I look in the neighborhood at what the houses are selling for per square foot mm-hmm <affirmative>. And then if I can bring that house, I look at the pictures of the houses that are for sale yes. In that neighborhood. And then I go back and look for four to six months of the houses that have sold, see what they're selling for, what they looked like on the inside. Were they updated? Did they have new appliances? So once [00:24:30] I get that price and I see what I'm buying this house for, it doesn't matter what the wholesaler paid for the house.
Speaker 2:
Correct.
Speaker 3:
Just don't ever go in and look at the wholesale and go, well, he's making $30,000. It doesn't matter. Mm-hmm <affirmative> the only thing that you're looking for is I can buy the house for X and I can sell it for X. Yeah. A lot of people get tucked up in the fact of, well, he's making a lot of money now drop that. Don't do that. Um, so I go in there and see what I think I can sell it for [00:25:00] you. You go into a house. So the things that, that we do are roof, if it needs it. Yeah. Um, AC yeah. If it needs it, both, those are two items that I look at very carefully. Um, depending on how old the AC unit is and how old the roof is. Right. Um, they always get new, new, uh, paint, Uhhuh, new carpet mm-hmm <affirmative> we put in new toilets with the elongated bowls, we upgrade the light [00:25:30] fixtures, um, put in, um, new countertops, typically like a marble or, or something mm-hmm <affirmative> or a granite, uh, depending on what what's popular in that neighborhood and the houses that are for sale. Right. And then all new appliances.
Speaker 2:
So kitchen bathrooms, obviously roof and AC or primary. Uh, but then flooring, kitchen and bathrooms is where you're really looking to improve upon the, the look of the house where you think you could then make [00:26:00] a difference when you sell it is in those specific areas. So when we see these different shows where they, we were, I'm knocking out the bedroom here and I'm gonna, that's just a bunch of hoo-ha. I mean, it it's great for TV and I can understand why it would make a difference, but I think it would
Speaker 3:
Cost a lot. Now I did move a couple walls in the last house that I, that I did. And it was, um, they had a single sink in the master bedroom and they had two closets. And so I took one closet and made a little smaller where I could make [00:26:30] a double vanity in there, Uhhuh <affirmative>. And then I put a sliding barn door on there where I didn't have to open something up into the room, but that's like the most, you know, I'm, I'm not going back and you
Speaker 2:
Keep it simple,
Speaker 3:
Keep it very, very simple Uhhuh. I'm trying to buy this thing and I'm trying to get rid of it. Okay. As quick as I can. Okay. Um, I don't do a whole lot. The house speaks for itself. So you've got, uh, you've got these, these buyers and they've been looking around at houses [00:27:00] and then they walk into a house in a neighborhood that they've been looking around in this house, smells brand new mm-hmm <affirmative> they walk up, it's got appliances with the protective tape, still on them. They open up the oven and there's the instruction, booklet, all the lights, all the plugs and switches are new. Mm-hmm <affirmative> everything in this house looks brand new, but it's an existing house. It smells like a new house. Now the roof may have a few years on it. The AC may have a few years on it. But like I said, if it was older, [00:27:30] we replaced it. Or if it, if it was broken in any way, we also set, we also put a warranty with the house. So it's one of those warranties that when the buyer gets it, if anything's wrong, they just call that warranty company.
Speaker 2:
Um, I'm trying to remember, is
Speaker 3:
That like shield or, or so fellow motor warranties. Yeah. Got it. So we pay for those. So they're pretty safe with that with, um, it's, it's kind of a, I mean, it's an insurance policy for them. They, yeah. You know, the appliances are all appliances are always [00:28:00] new, right? I have not, not changed the appliances. So
Speaker 2:
Where you're gonna be spending a little bit of money outside of construction costs with roofs and AC is on, uh, hardware. So this is the kitchen, it's the countertops. It might be cabinets or whatever it may be. So is that where you end up where you have to really watch your budget because that's where we're gonna wind up spending money, the paint, the car, the flooring, are you doing just carpets? Are you doing hard? It just depends. Or
Speaker 3:
So it depends on the neighborhood, whatever the neighborhood is, is going on in the neighborhood. [00:28:30] So some of them, we put down, um, this isn't the house you're gonna live in either. So don't look at it as well. You know, I want the nice wood. I want this. I don't want that. Unless it's in a nice wood neighborhood, you're
Speaker 2:
At Memorial and Pty point, you know? Right, right.
Speaker 3:
Yeah. Um, so we've put down, uh, vinyl plank. Mm-hmm <affirmative> that, that looks like wood and it's, it's been gorgeous. Yeah. Um, the finishes are not that expensive. You can get nice finishes, but they're they're builder grants. Where,
Speaker 2:
Where [00:29:00] are you getting these?
Speaker 3:
Um, I've I've purchased
Speaker 2:
Is wholesale buildings wholesale. Are you getting it all?
Speaker 3:
Or I've purchased stuff from, from home Depot, right. Uh, floor decor. Okay. But then some of the contractors I use, they just supply everything. They've got contractors that come out perfect. And they show you. Okay. So a lot of these guys fix up, uh, rental homes. Mm-hmm <affirmative> and basically they've done this so much that they come to you and go, do you want package 1, 2, 3, or four package four is brown walls. That's nice brown carpet and these [00:29:30] kind of pools and these,
Speaker 2:
These, and that's also good for you in decision budgeting and decision making. It is to know exactly what it's gonna be and what's gonna
Speaker 3:
Happen. Now. I have my contractors that I've learned to use. And I, when I tell them I'm looking at a house, I'll bring 'em to look at a house with me. Okay. I mean, I will have them price. That's smart at that point. And I always get an inspection on the house.
Speaker 2:
Okay. So you've got the contractors with you. So let's say you've got the roofing guy, you got an AC guy you've got, I'm gonna lack of better words. I'm gonna call the interior,
Speaker 3:
Basically. Just get, you've got these guys that do this for a living their [00:30:00] GCs. Yeah. Okay. So they're going to handle, they can look at all of it. They're gonna handle everything. And they've got a buddy that, that, that does AC and yeah. And when I say they got a buddy, these are people I've worked with a
Speaker 2:
Long time. Absolutely. Yeah. You have a relationship. So they're also gonna give you a really good deal, as opposed to maybe if I'm doing it and I've never done it before. Right. I could be, I'd be paying probably a lot more. Uh, so, but you've built up these relationships and you have them. So they're able to come in, they're able to get the job done. And then what is your timeframe? So after [00:30:30] the, obviously I understand construction can take time. We don't know how much time, but what do you look for to be able to go in, have a house done and then get it back on the market. Do you have a kind of a goal set time or what you'd
Speaker 3:
Like to see? I wanna see it faster, but it's averaging only about four months.
Speaker 2:
Oh, so it's about four months from the time you buy it from the wholesaler till it's ready to go back on the market.
Speaker 3:
From the time I put it under contract, you're 30. When you put it under contract and you're 30 when you sell it.
Speaker 2:
Got
Speaker 3:
It. So 30 days.
Speaker 2:
So you got about 60 days [00:31:00] in there. So 60
Speaker 3:
Days in there do the work. So depending on the workload of the GC or how good the GC is or how much you're doing yourself, you know, um, I buy things with cash and I'm doing one house at a time. Mm-hmm <affirmative> now you can buy things with hard money, but you've gotta make sure that you've got plenty of fluff in there for a hard money loan. Cause a hard money loan is a high interest loan. So where the bank's gonna loan it [00:31:30] to you, I don't even know what rates are now. Let's say four. Yeah. Four and a quarter. Yeah. They're gonna be charging you 18.99, right percent on that hard money loan.
Speaker 2:
But it's a 60 day loan is what you're
Speaker 3:
Hoping for. But sometimes it works, uh, well for, for the hard money, because if they can turn it, they will take it, uh, a hard money loan and turn it into a conventional mm-hmm <affirmative>. So, because the bank's not gonna loan you the money typically to fix up a
Speaker 2:
House,
Speaker 3:
Right? If you come up to the bank and say, I found this house and after repair value is gonna be [00:32:00] a hundred thousand, they're gonna like loan. You loan you 50 on, on, you know what it is, the hard money guy they're gonna loan you 85% of that or 90% of
Speaker 2:
That. And so these are a different set of lenders that you're going to, and you develop again, developed relationships
Speaker 3:
With, and if you type hard money loans into Google,
Speaker 2:
You'll see
Speaker 3:
'em, they're everywhere. Okay. They're everywhere. It's, it's easy.
Speaker 2:
So you get in there and, and you've got 'em and so you wanna do it within this, you know, 60 day period. [00:32:30] Um, so now you've, you've got a few under your belt. One of the questions that I love to ask people in any business, regardless of what they're in is what are some of the busi biggest mistakes or the biggest mistake that you have made? And what did you learn from it? Because I know with me, I know when I've made these big mistakes and stuff like that, there are lessons that I generally learned pretty well. And, um, to make sure that I don't do 'em again. So are there any particular lessons out there that you've learned said, you [00:33:00] know what? I wouldn't go this route. I wouldn't do this because you know, it really burned me last time.
Speaker 3:
So I met this girl and we got married. No,
Speaker 2:
No, no, not Stacy. I don't mean Stacy don't do that. I will probably be seeing Stacy later on this evening. Yes. At around six 30. I'm looking at my clock going, yeah, she already hears this. I'm gonna get nails.
Speaker 3:
The, um, so
Speaker 2:
I,
Speaker 3:
Each time there's, there's something, there's something to be learned each time. There's, there's a different way to do something and you've got to log your lessons learned, you know, [00:33:30] write it down. Uh, oh, I like
Speaker 2:
That. So keep, keep a list of your mistakes.
Speaker 3:
Absolutely. Because it's very, very easy to forget because when I buy a house, I work through it. I, I have a, a hard time with something. Um, and then eight, nine months goes by and I think, oh, you know what? Tony could really help on there. Yeah. And then I called Tony, he's like, why are you calling me? I'm like, oh yeah, I forgot. We hate each other. <laugh> or, or, or, you know sure. Silly things like that. So I think everybody's gotta keep their own lesson. [00:34:00] Uh, log of lessons learned, um, for me right now, I'm going through one. I, um, I purchased a house, uh, with a tenant in it and that tenant will not leave. Okay. And so I'm going through, I've never been through the eviction process,
Speaker 2:
Just walked a client through that and
Speaker 3:
It's going through that right now. And when I purchased it from the wholesaler, oh yeah. The lady knows that she's gotta get out and she'll be out, you know, a few days after. So there was this sweet deal of she was gonna be out within, [00:34:30] uh, we served a notice before we closed. So like six to eight days after closing, she was gonna be gone. No, no, she is. She is hole up in there and I got a court date coming up. Yeah. And, um, she's a squatter. I mean, and it's just, it's, it's a pain in the rear because now I've got 60 days that, that I've kind of gone through this process that I could have. My money's just sitting there. That house is just sitting there. I can't do anything. I'm watching interest rates go up and [00:35:00] market's going crazy. You know what,
Speaker 2:
So then, but that's, that's again, that's one of those lessons that we really only learned after we've made the mistake. And so don't buy a home where there's a renter
Speaker 3:
In it. You know, you said do things that you understand. I didn't understand the eviction process. I took people. Yeah. For when they said, oh, it's easy. This is all you gotta do. Is this, this and that. And I'm like, oh, okay. That sounds good.
Speaker 2:
No, it's a lot more intense than that
Speaker 3:
Question. Everything is what I try to do. And my other business is question, if you tell me it's sunny outside, [00:35:30] how sunny is it? How do you know it's sunny? What is it gonna be later is it's, I'm gonna ask you all kinds of questions on, on this one with the eviction thing. They said, oh, it's easy. I was like, okay.
Speaker 2:
I like the old Ronald Reagan quote. Uh, he said, you know, what about trusting people? Or just believing them? He said, he said, look, always trust, but verify. And I think there's a lot of, uh, wisdom, uh, behind that so that you don't create, you know, other mistakes
Speaker 3:
And the mistakes are easy to correct. Mm-hmm, <affirmative>, they're typically easy to correct, but [00:36:00] they cost money and that's the thing it hits. And
Speaker 2:
In this case, and in your case, especially if there's a hard money, loan time is costing you money. If you had time is against
Speaker 3:
You. If you would trying to evict somebody under a hard money loan, you are getting ready to get it handed to you. Right. I mean, it's, it's not gonna turn out well, and it doesn't take a whole lot. I mean, you there's, there's a main, and one things that can pop up in a house. Right. And I've, I've had things pop up in houses. After I sold it, I had a sold a house and, uh, we did a really, really good job on it. But underneath [00:36:30] the house, a route penetrated, the sewer line that had nothing to do with me fixing up the house, nothing. Right. And so the guy calls me and says, Hey, there's a route penetrated the sewer line. You need to, to help me with this. And I'm Hey, we, we closed the house. It's it's, everybody's got a risk mine at that point was yeah. Um, you know, I, I, my, I feel
Speaker 2:
Change Christmas cards every year.
Speaker 3:
<laugh> <laugh> Now I [00:37:00] keep moving. OK.
Speaker 2:
I understand. I understand. So there's a lot of people. So I, I get this question, as you can imagine, people will ask me know, I think I'd like to try this and like to do this. Is this something that you would say, yeah, give it a shot, see how you like it, or would you tell a novice? You probably should stay away from, from doing something like this and just, and really do what you know,
Speaker 3:
For me, I've been in the painting business and around construction my whole life. So it was very easy. If you walk me through a [00:37:30] house, I know I'm very familiar with what you're talking about. So I'm a little biased because it it's been easier for me. However, my wife does not. Mm-hmm <affirmative> she doesn't know a lot about the inner workings of a house. She's learned it and she's learned it pretty quickly. Um, so I think anybody can learn it if you, if you immerse yourself in it and talk to people, I think just be realistic. Look at what the house will sell for. It is brick and stick [00:38:00] or whatever. The, the thing is, okay, it's not memories. It's not your, your kids' prom. It's, it's, it's a house and people come up and they're like, oh, this houses worth so much because I raised my whole family here. That's great for you. And then
Speaker 2:
There's no emotion in
Speaker 3:
It. Not for the next person. You've gotta look at a house and say what it really is not what it could be. What is it really? What's it worth? What's it gonna be? How much can I spend
Speaker 2:
And then be willing to move on if they're not willing to absolutely
Speaker 3:
Walk away. Say no, say no, mm-hmm <affirmative> [00:38:30] is meant you were better off saying no to a good deal than saying yes to a bad
Speaker 2:
One. So just off the top of my head, if we've got somebody out there that says, they want to kind of look into this, and you had mentioned groups and getting it to use your language, getting immersed and it, where, where are some places people go, whether that be online or what have you, that they could start the immersion process to learn more about and get educated on the house, buying, uh, flipping, rebuilding it, flipping [00:39:00] it, uh, process,
Speaker 3:
Find somebody that does it look around. I, I would jump in like the, the Facebook groups, um, any kind of like good point social media groups start kind of following those. There's 1,000,001 people out there that, that are gonna sell you a, their patented plan to do it. And I never, no, I never did any of that. Right. You know, they say during the gold rush, it wasn't the people that, that, that got the gold. It was the people that were selling the stuff. Yeah. And that's the same thing around the house. [00:39:30] They've got a red and green system that you put in the address that's gonna take, get away from all that. Right. Get away from all that. Talk to real estate agents, talk to investors. You can find these people. I promise they will help you.
Speaker 2:
Yeah. Do what I have found in, in, um, in my own business, uh, on the marketing side of the business, people are always flattered. When you tell them, I really need a mentor. The fact that someone gets asked to be a mentor, they're really flattered. And I have never had someone [00:40:00] I have had someone say, look, I'm really busy. And I, which is fine. And I respect that. But most people are flattered to hear that. So get onto the, what you're saying is get onto these Facebook groups, get onto whatever group. And then just start interacting with people, ask someone to go to coffee, ask someone to go to lunch, something like that, start picking their brain. And then because people enjoy telling success stories,
Speaker 3:
Talk to a real estate agent, find a real estate agent and ask, ask real estate agents if they work with investors. And then when they say, if you find one [00:40:30] that says, yes, would you introduce me to, I'm really interested. Could you introduce me to some investors that real estate agent is gonna look at it and go, Brad wants to talk to some investors. If I teach him now I've got another client. So it's gonna be beneficial for them as well.
Speaker 2:
So getting good with, with a, with a, with a realtor. So it's, that's, if someone's, you know, wants to get into it, the market itself obviously plays a big role. If the markets and right. And we have been in a smoking hot housing market [00:41:00] for the last few years, if you look at it over the long term, is this something that you think can continue, will probably slow down a little bit? Does it affect what you do too terribly much?
Speaker 3:
Um, so the pandemic hit and we're freaking out we're oh my God, what what's gonna happen? We've gotta get rid of the, you know, house. We, we can't do any the flipping things over. Okay. And then all of a sudden it's not right. And it's,
Speaker 2:
It's changed it a little
Speaker 3:
Bit. Oh, it, it, all of a sudden [00:41:30] it is everybody's selling for over asking and oh, okay. We gotta jump back in. And so, you know, we jump back in hot and heavy and started doing it. The last two flips that I've sold have both were in bid wars. They sold for really over, over and one sold, uh, the first day and the other one sold the second.
Speaker 2:
So don't so really don't be afraid of a hot market. What you're saying, if you find the right asset, I guess
Speaker 3:
If you find the right deal, okay. It's all about the deal. Okay. If you find the deal and it will, will do what [00:42:00] you think it can do.
Speaker 2:
Yeah.
Speaker 3:
And then I always go in there because every wholesale whoever's selling you, the house is they say, this house is gonna have the ARV of, of this. It's gonna be worth 300,000. Mm-hmm <affirmative>. I always come and look at it and go, okay, we're gonna, let's say that we can sell it for two 60, you know, or whatever. It's I always bring it down. Sure. Because I conserv
Speaker 2:
It's conservative budgeting, and
Speaker 3:
I want to be conservative because I, I, I don't [00:42:30] want it to have to have the stars align and everything for me to get the, the price that I'm looking for. And it's been a good market. So I've gotten more, but it's plan it for, for plan, for the worst and expect the, or, you know, try to get the best.
Speaker 2:
Yeah. Yeah.
Speaker 3:
But if you, if you shoot it way up here, oh my God, here's this house that I'm gonna make X amount on it. And then you, you don't really plan it out well, and then you're gonna set up for failure.
Speaker 2:
So here's kind of the final question. As we're trying to look at the time here, I try to keep it around the 40 minute mark. [00:43:00] And we're, we're a little over that now, but so you and Stacy just built a home, any chance that on the market,
Speaker 3:
Any chance that that's on the market? Oh my God. Give me about a year when I run outta money.
Speaker 2:
<laugh> I know she would kill
Speaker 3:
You. Oh my God. I would kill if
Speaker 2:
Y'all worked so hard. Yeah. It's a custom home that y'all been working on and just all the little details and stuff like that. And you just, what, three weeks ago, just moved in.
Speaker 3:
It's yeah, it's been about three weeks. And then, uh, you know, I haven't moved [00:43:30] for 11 years and right. And I forgot that. I hate it
Speaker 2:
Was so funny. I just looked at my calendar and I still don't see the house warming party on my calendar. I was like, what, what what's going on?
Speaker 3:
Well, I remember now that after you start, um, when you move yeah. That there's takes like six months to finish everything.
Speaker 2:
Oh. But you can do it in, in six days. Oh yeah. I've seen you work. I've seen you work. Hey, thank you for coming in. I really appreciate this. This was a good time. We're right in the middle of this series. The next person I'm trying to get on here is someone that [00:44:00] I think, you know, I think, you know, Whitney snow and I'm get, uh, Whitney snow realtor to the stars in Cypress, Texas, uh, to come in here and just kind of talk about what we can do to get our house ready so that you can get into those bidding of course, and get those sold, uh, and get it ready to list. And for those of you who've been listening, I really do appreciate it. So we got Whitney coming up. I'm really, and I'm, I'm saying it on the mic again. Cause I want Iggy Iggy grill all. I want you to hear this. I'm gunning for you. I want you on the show to talk about apartment building, to talk about the seniors [00:44:30] market, to talk about the boomers. I'm calling you out. Iggy. I want you on this show. Thank you everybody for listening. I appreciate your time. Thank you for being here, buddy. Thanks Brad.