September 2022

Dave:
Hey, everyone. Welcome to On the Market. I am joined here with Jamil Damji, coming to me from Phoenix, LA? Where are you?

Jamil:
I’m in Phoenix today, enjoying life, enjoying all of the fun-ness that comes-

Dave:
What’s the fun-ness? What do you-

Jamil:
What’s the fun-ness? Well, we actually got some offers on some of our flips. That’s been really relieving to me. Beyond that, I’m almost done filming season two of our television show. So, I’m about to become a free man.

Dave:
Dude, you’ve literally been saying that since I met you which was at least six months ago. It’s so hard. I hope you’re right this time.

Jamil:
Me too, me too. But I’m super… This guest was amazing.

Dave:
Oh yeah. John is great, and honestly, a lot of people have been messaging me and asking me and saying… A lot of the people come on the show share a similar opinion. If you’re looking for a contrarian opinion, that’s not that wild, I don’t think it’s crazy, but a very informed opinion about what you think is going to happen the next couple years, listen to this interview because John has access to data none of us do. He has his own consultancy firm, and he just provides so much good context and things that I’m good to go sit in a dark room and think about for the next like three hours.

Jamil:
Really though, I think one of the most enlightening conversations I’ve had all year. So, you guys are in for it.

Dave:
With that, we’re going to bring in John Burns who’s the founder of John Burns Real Estate Consulting. But first, we’re going to take a quick break. John Burns, welcome to On the Market. Thank you so much for being here today.

John:
Oh, I’m looking forward to this. You guys are great.

Dave:
Thank you. Well, I’ve been following you and your company for quite a while and I’m a big fan of your work, but for those of our audience who aren’t familiar with you and your company, can you just give us a brief background?

John:
Sure. I started it 21 years ago to figure out what was going on the housing market for investors, mostly big companies, and there’s 115 of us now that are trying to figure that out. We have a research subscription for big companies, it’s pretty expensive, and then we also do about 900 consulting studies a year. That’s very skewed to new home development.

Dave:
Wow. So, safe to say you’ve figured out the housing market, right? You know everything that’s going to happen over the next couple of months?

John:
No, I mean, our purpose statement is to solve today to help navigate tomorrow. So, I think we’re pretty good at solving today. What’s going to happen tomorrow, your guess is as good as mine.

Dave:
Well, I was hoping, that’s why we brought you on, John. You’re going to tell everyone exactly what was going to happen. So, we’ll just end the interview here.

John:
I do have a guess. So, I can tell you our… I mean, I have to decide how aggressively we’re going to grow our business. So, this is near and dear to me, believe me.

Dave:
Well, I’m just kidding. Obviously, we would love to learn as much as we can from you. So, just tell me a little bit. Over the last 21 years, what are the key variables, what’s the data, the economic indicators that you’re looking at to help understand what’s happening in the housing market?

John:
So, when I started the business 21 years ago, it was hard to find data. So, we were getting out and finding data, and now there’s just too much data. I feel like we’re become a data filter, and we’re still looking for more data. At the end of the day, the local market from a macro standpoint is all about job growth, and that’s free data. It’s available from the Bureau of Labor Statistics, always compare July to last July because it’s seasonal. We do that for our clients. That’ll tell you whether your local economy’s growing or not. There’s two surveys. The right answer’s usually right in between both surveys. So, I advise everybody to do that.
And then on the supply side, I know you’re monitoring listings and things, and we can get into the new home market versus the resale market because I think they’re going to behave massively differently this cycle, but just monitoring listings and days On the Market, everybody can do that, but that’s a very short-term indicator that can tell you what’s going to happen. The job growth will tell you whether or not your market is adding more people who can afford to rent your house or not.

Jamil:
I love that. It’s so simple.

John:
How did I build a business just on that, I don’t know.

Jamil:
I think that’s the key though, right? The more simple that you can make what you do so that people can digest the information, the better, right? From the perspective of your average investor in real estate, for the most of us that are involved in, I guess, the information that you’re disseminating, we’re looking at it from a resale perspective, right, and there’s not a lot of people that I know that are huge new home builders. For the most part, what we do is we buy distress property, fix, and flip them. So, if you don’t mind, Dave, I just want to come out the gate swinging here. I want to understand because you said something that is all the light bulbs in my head right now are firing off. How different is the new home market and the resale market going to look coming around the corner here?

John:
Well, we’re recording this at the end of August, and the typical home builder in America has already dropped price 5%. I don’t think the resale market has done that. So, the home builders are leading indicators, and there’s actually 23 of them that are publicly traded so you can listen to their calls for free and they’ll tell you what’s going on right up to the minute. There are businesses that are going to end up with empty homes that need to be sold, and actually, they’re going to convert, they are converting quite a few of them to rentals. They hadn’t thought of that 20 years ago. So, that’s going to be an interesting play here, but that’s what you might call a desperate seller. Even though their balance sheets are really strong, I wouldn’t say they’re desperate, but they’re businesses.
The resale market, as long as the economy is growing and people are not moving or not losing their job, they’re not desperate to sell their house. In fact, if they bought their home more than a year ago, they’re sitting on a ton of equity. They can just stay put. And the mortgages this cycle, as you know, have been pristine, so I’m wondering where the supply is going to come from in the resale market, and I don’t think there’s going to be a ton of supply. I think we figured out it needed to increase 800% just to get back to normal. I mean, that’s how ridiculously low it was.

Dave:
That’s from its low point though, right, not from right now.

John:
Yeah, yeah, maybe not quite that much. Maybe that was actually, that was a new homestead, but it needed to increase significantly just to get back to a normal level, and I don’t know where that increase is going to come from unless Jay Powell is successful in engineering a really bad recession. It seems weird to say successful about a recession, but in my view, that’s the only thing he can control to get inflation down, and he’s got a long way to go because the economy’s still super strong. Unemployment’s still super low. Maybe he’ll get lucky. Something will happen and inflation will tame down, or we just end up with inflation for a very long time which will be high borrowing rates which people don’t like.

Jamil:
John, would you mind clarifying that to me because we’re obviously seeing something a little different right now in the short term, right, with respect to listings and how things have sort of shifted since we’ve seen the interest rate spikes and all the people that were thinking of selling have rushing into the market and putting their listings On the Market which has obviously swelled inventory in many markets. One of the markets that I’m in… I’m in 132 different markets just to give you backstory on me. I run a wholesale franchise operation and we’re all over the country. Primarily though, the majority of our volume is sitting in Phoenix, Arizona, and we are fixing and flipping robustly out here, and throughout the year, we started the year off with… We would finish a house, we’d put it On the Market, and it would sell immediately over list, all kinds of crazy scenarios there.
And now, since the market has started turning the corner, we’ve seen that our flips are sitting longer. We’re taking price reductions. We’re getting lowball offers, something that we hadn’t seen in quite some time. Do you think this is temporary? Because from what you just said, the resale market is not going to have enough inventory to meet demand. Is this all a temporary blip where we saw this huge rush of listings and then maybe coming around the corner that might disappear.

John:
All right. Well, you’re not going to like my answer be because you’re like a home builder. I mean, if you’ve got a house that needs to get sold and it’s empty, you’ve got to sell and you’ve got to find the market. So, that’s exactly what’s going on. The difference is hopefully for you, you’re trying to find the market where there’s not a lot of other homes for sale, and so, yeah, maybe you have to price it back where things were in January or maybe even last spring or something when you got into the deal, and nobody likes that. But if you’re out in a new home area, they tend to be 10 builders across the street from each other, and there’s a hundred empty homes for sale. That’s a much more distressful situation.
The only advice I would say is you got to find the market. You made that investment when interest rates were three and your consumer was going to be able to buy the home, or maybe somebody would buy it from you and rent it out and borrow at three. Now, they got to borrow at five. They just have to pay less, and that’s happened.

Dave:
John, you said, and I tend to agree that the new home market and the existing home market are sort of going to behave differently in this cycle. Do you have any context how big the new home market is compared to the existing home market, and is it possible that trouble with builders and new construction could start bleeding into the existing home market?

John:
Yeah, the new home market is about 11% of all the sales in the country or something like that, and historically, it’s usually around 15. So, the lack of construction everybody’s been talking about is part of the reason why it’s less. Existing home sales are coming down so quickly, maybe they’ll be at 15 pretty darn quickly, but that’s a national number. I mean if you’re in Denver, it’s out by the airport where there’s a lot of new homes and it’s not near Stapleton where there used to be a lot of new homes. It’s a very different sub-market and behavior.

Dave:
I’m impressed by your knowledge of Denver. Do you live in Denver?

John:
No, but we do 70 pages on a hundred Metro areas and I’ve traveled enough to have gone to all home games at all 30 major league baseball teams. So, I travel a fair amount.

Dave:
Wow. That’s a very cool bucket list claim to fame.

John:
Yeah, I know, I know. They keep building new stadiums, so I got to get going again.

Dave:
So, what we’re talking about so far, I presume, is mostly with single family homes. Is that right?

John:
Yeah. I mean, town homes are similar to me. Apartments are different.

Dave:
So, can you tell us a little bit about how apartment conditions are a little bit different than town homes and single families?

John:
Well, right now, it’s a completely different story. When you jack mortgage rates, you tell renters who want to be homeowners, “You got to stay renting.” So, the demand is gotten even stronger which is really the challenge for the Fed. I think the CPI measure, I think 30% of that is rent. So, when mortgage rates go up, they’re actually pushing inflation up, not down because rent’s such a big component of it. Their favorite metric is something called PC. I think it’s about 17%, but they’re doing that really in my view to kill the economy because that’s what they need to have happen so demand slows, so inflation calms back down because history has shown that sustained inflation can actually be long-term worse for the economy than just ripping off the bandaid and having a short recession, like what happened twice in the early ’80s. I hope we don’t have to go there again, but it’s starting to smell like that to me.

Dave:
We sort of talked about the long-term and short-term prospects. Given what’s happening in the new construction market and home builders are having a hard time selling, do you think we’re going to start to see, and we’ve already seen construction start to slow down, but do you think there is a risk similar to the last recession where we just saw home building fall off a cliff and it took years, almost a decade for it to come back to that level? Is there a risk that we’re going to enter another period where we already have a housing supply issue in the US and it’s maybe going to get worse?

John:
Yeah, well, it’s going down. I mean, 23 public builders have told you they’re going to start less homes next year for the most part, so I’m not forecasting other than telling you what the guys who are going to build it are saying is going to happen. So many things are different this time, and I hate that phrase, but I mean, we are building less. We’re not building 2 million homes. We’re building 1,700,00, so still pretty high. There is a big pig in the python of all these unsold homes that are under construction that are going to get finished over the next 12 months. So, I do think that’s what’s going to drive prices down.
But what is different is the builder balance sheets, public and private home builders, have never been stronger, never. In fact, we just polled them on our client webinar last week. So, sales are down dramatically. Housing market should be the poster child for the industry that’s getting destroyed. We polled 400 clients and said, “Do you have more employees than you did at the beginning of the year?” and only, I think it was 20% of them had fewer and only 30% said they were going to have fewer 12 months from now which is very consistent with what they’ve been telling me is like, “John, we made so much money and we borrowed very conservatively, and if we have a recession, I don’t like it. So be it, but I’m not letting go of my good people, and I’m not dropping land, and I won’t grow as much.”
So, that’s a different story than the last cycle where people were borrowing money like crazy, and the consumer was levered up to their eyeballs with subprime debt, but most consumers can afford the payment. They’re fixed rate payments with their current jobs and they’re getting better raises than they were anticipating due to inflation. So, I don’t think we see anything like last time, unless the Fed induces some massive recession or something I don’t see coming.

Jamil:
John, how prevalent or important do you think the institutional investor has been in leading up into our current situation and possibly leading out of it? Because it’s interesting, I read a report that one of the major institutional buyers has just raised a tremendous, I mean, a sickening amount of money to purchase new homes and resale homes in the downturn that they’re currently describing. So, almost as if they have purposely pulled back, knowing that while the rates were spiking, they pulled back purchasing and everybody in the business of buying and selling, like myself, felt that, we all felt the institutions leave momentarily so that they could create a drop in demand, and then that will automatically create a drop in pricing, but they’re positioning themselves to come in and take a massive position. How impactful do you see that being in what we’re going to experience five years from now?

John:
So, we have done so much research on this.

Dave:
Finally. Someone.

John:
We’ve gone down to mapping each house that the publicly traded institutions have done and matching it to what they’re disclosing publicly. So, we’ve got it down to the house, and the headlines are complete BS. I won’t say the whole word, but they’re complete lies. So, I’ll give you some clarity on that. So, the iBuyers are 2% of the market nationally, two. Companies that own a hundred or more homes are three. Companies that own 10 to 99, which you’re in one of those camps, is three. And then those that own less than 10 are 19. Now, that 19 does include second homes, and the way we get the data is we say, “If the property tax bill is being sent somewhere else, this is not an owner occupant.” So, that’s how we… Maybe it’s not perfect, but The New York Times hates any PE firm that starts with Black. Congress gets reelected when they’re bashing Wall Street. So, all the headlines are on that, and I’m sure, and I’ll clarify it some more.
We actually summarized it by zip codes. There are some zip codes where the percentages of buying by institutions are like five times what I just told you. So, they all have this thing they call a buy box that you’re probably familiar with the term.

Jamil:
Yes, sir.

John:
So, the buy box is not in every zip code everywhere in the country. It’s in fast-growing metro areas, right around the median home price, right around a nice rent. That’s where the competition is super severe, and I totally get it, but I’m willing to bet that people listening to BiggerPockets is far bigger than anybody coming out of New York when you add it all up.

Jamil:
That is incredible to me. I want to reiterate this because I just had my mind blown because you just described what I… Leading up into this, John, I’ve been characterizing the private equity or the institutional buyer as the 800-pound gorilla, and you just told me that it’s actually, it’s an 80-pound chimpanzee.

Dave:
That’s really interesting. But maybe, Jamil, maybe you’re noticing it because they’re really active in Phoenix.

John:
It’s super active in Phoenix.

Dave:
Yes.

John:
Yeah, the percentages are bigger in… And you would really know. Are you in Charlotte?

Jamil:
We’re in Charlotte, yes.

John:
They’re crazy active in Charlotte.

Jamil:
Yes, sir.

John:
And actually, Dave, in Denver, it’s one of the least markets where they do the least. So, Denver and Austin.

Dave:
Really? Because it maybe’s just too unaffordable at that point?

John:
Well, for Austin, it’s all mom and pop. It’s all BRRRRs.

Dave:
Huh.

John:
The buy box is not working for the big institutions. Even with one of the biggest institutions in the country being headquartered in Austin, I think those hundred-plus are only buying 1% of the homes in Austin.

Jamil:
So, to just recap that, you said the iBuyer is 2% of the sales, of the purchases. The small institutional buyer is 3%.

John:
Well, yeah. Well, if they own a hundred or more nationally, they’re three.

Jamil:
Okay. So, that’s the large institution. That’s the big private equity firm.

John:
Yeah. Is that you too?

Jamil:
No sir. No, sir. That’s not us.

Dave:
Yeah, he’s just trading them.

Jamil:
I’m trading. Yeah. So, I sell to these large institutions.

John:
Yeah. So, flippers, flippers we think are about 8% of the market, but they’re coming in and out of that number, right? So, it’s hard. Some are in each of the buckets.

Jamil:
This is data that I don’t think anyone has put out there. You’ve got different data than I have seen. So, how did you track this? If you don’t mind, I know that’s proprietary probably, but how did you get so granular with it that you got it down to the house?

John:
We bought every transaction in the country. It was very expensive and we cheated a little bit. We did buy zip code because that was easier. So, if the proper tax bill’s going to a different zip code, that’s an investor. And then I just have a bunch of great people with databases that know how to run the math, and then we geo coded it too and did a lot of back checking. This took more than a year. I mean, this was not an easy assignment, but I knew it was critical to understanding the market.

Jamil:
The risk of a massive dump in inventory by a huge private equity firm isn’t as great of a risk as wall as the headlines or the media outlets are trying to make it.

John:
Well, I’ll even make you more comfortable with that statement. So, if you’re a REIT, which the bigger ones are, you pay a tax penalty as a REIT for selling houses.

Jamil:
What?

John:
Yeah.

Jamil:
I did not know that.

John:
Well, you get structured as a REIT, your income is tax free as a company and you pass it on to your shareholder. So, that’s the REIT benefit, and the flip side of that is they penalize you for becoming like a regular company where you’re selling homes, you have to pay regular taxes that way. And also, even further, they’ve borrowed money, putting all those homes up as security and a cash flow income stream, their debt covenants don’t allow them to sell a lot of homes.
The bigger risk is the guy who owns 10 homes and five homes and 20 homes times the many thousands of people that there are like that. That’s the person I think who dumps their home, and we’ve been talking to them. There’s a couple brokerage services now like Rootstock and SFRhub and others that specialize in that person. So, they’re clients of ours, and we’re asking them, “When you see a surge in selling, you be sure to let me know,” and they’ve seen a little bit of a surge, but what they’ve learned is that those sellers need to provide great information, like how have the financials been the last year and other things to sell these homes, and they don’t have it.

Jamil:
Because they’re not a sophisticated owner. They’re small ma and pa property management companies.

John:
So, they’re going to have to wait for the lease to expire and then kick somebody out and sell the house to somebody else. So, it’s not going to happen overnight. It would happen over time, if people are playing that game.

Jamil:
Wow. And primarily they’ve been purchasing with some tremendously low debt, right? And so, leading up into this, they’ve been holding a lot of inventory with some very favorable terms, and so, maybe that’s the vacuum we’re feeling right now is them leaving the space because the BRRRR’s not working as well as it was seven months ago.

John:
So, we have this fix and flip survey which by the way, if any of your BRRRR clients want to participate in that, just send it to me at [email protected], and I’ll get you in on the survey because we’re trying to stay on top of what people are doing. People are exiting and then not reinvesting the proceeds yet. I know that there’s 1031s and other things associated with that, but they’re not finding deals that are as underwriteable right now. In fact, I don’t have the exact stats. I’ve got it in the survey, but the percentage of ARV that they’re willing to pay now versus three months ago has gone down dramatically.

Jamil:
Do you have an average of what that has gone down?

John:
We have it by distribution, but it’s gone down maybe 10%.

Jamil:
Yeah.

John:
So, maybe if I was going to do a 75, I’d do a 65 something, but that means I’m going to pay less for your house or I’m going to borrow less money.

Dave:
Can you tell us a little bit more about that survey, John?

John:
Yeah. So, it’s just, it’s a survey. We partnered with a couple companies, Flatiron and Sundae and some others that are involved in this business. We’ve got a couple clients that fund fix and flip, and yeah, it’s just about 10 questions, but there’s a lot of participants, and you’re asking me these questions I don’t know the answer to, but if I ask a thousand people and poll them, we’re hoping to get those answers and find these things out. I want to ask, are you going to sell?

Dave:
Oh cool.

John:
Or are you going to reinvest?

Dave:
So, our listeners, if they want to participate and contribute data to this survey, they can, that’s what you were saying, email you or go to your website.

John:
Yeah. We’ll get you in. We do it once a quarter. We’ll get you on the next survey and then you’ll get all the results in return. That’s our give back.

Dave:
Cool. That’s awesome. I mean, if you’re a flipper, that’s a no-brainer. Go fill out 10 questions in exchange for a lot of information about your market. So, we’ve talked a little bit about what’s going on and what’s happening here, and I do want to get your opinion, I know that’s not data supported always and no one can predict the future, but what do you see happening over the next couple of months, and how do you feel about the long term prospect of housing valuations in the US?

John:
I mean, we think they’re coming down. I’m not going to quote the percentage, but it’s substantial, but I’ll say it another way. So, we just went through say two to three years of really substantial price appreciation. What if you had to give a year of that back? Would that sound unreasonable? No. Do the math on that percentage in your market. It’s a lot.

Dave:
Yeah, it is. And do you think that’s going to happen universally across markets?

John:
No. Every market is completely different.

Dave:
And so, you’re saying on a national level sort of-

John:
Yeah, right. And then those stats I quoted you, they’re so different in Charlotte than they are in Phoenix than they are in Denver, though that was all national. This is very local, and even I remember I have the Charlotte map kind of memorized in my head. It’s like all the east and west side of Charlotte where all this activity’s going on and nothing in the north and the south. So, it’s very zip code specific.

Jamil:
John, you’re saying that you’re seeing that housing values are going to come down based off of the research that you’ve done and some markets more than others, and I’m not quoting you, but possibly erasing an entire year’s worth of appreciation from our balance sheets. What’s the timeframe?

John:
I think it’s quicker where there’s a lot of desperate sellers like home builders, and it’s really slow on the resale side where people are not desperate.

Jamil:
So, emotions again, just like how we saw the massive appreciation happen based off of emotions because there’s a term that I love using, I call it emotional equity. That’s where we had people coming in and overpaying by 100,000, $200,000 more than a property was listed, and this isn’t lender-backed value. This is stuff, they were waving appraisal contingencies and just coming in and slapping down cold, hard cash to close this deal, and so, that equity, that appreciation that happened will disappear, and you’re saying it’s going to disappear as fast as it came here because it’s an emotional-based situation.

John:
Yeah. So, actually, a guy named Robert Shiller who won the Nobel Prize not that long ago for economics primarily won it for what you just said was his analysis on psychology and it feeding on itself. When things go up, it forces things to go up even more, and I think we’re going through a psychology shift the other way where if now’s not a good time to buy, I should wait three months or I should wait three… And I think that’s the most likely scenario until some new information comes along and changes everything I just said. But the other part of this question that I do find flippers don’t talk enough about is the mortgage rate and the borrowing rate. When you see 40% home price appreciation and rates go from 3% to 5.5%, who thinks that doesn’t matter? I mean, but that’s what you’re saying. If you don’t think prices are going to fall, you’re basically saying that doesn’t matter.

Jamil:
It has to matter.

Dave:
Of course, yeah.

Jamil:
It has to matter.

Dave:
Yeah, I mean, affordability is I think I saw some stat recently that said is near a 40-year low in terms of what people can afford, and of course that matters because it dries up demand and just less people are willing to get into the market. Do you think, John, this bodes… So, that’s sort of your short-term view. What do you think about sort of the long-term prospects of the housing market? Because we’ve done some analysis at BiggerPockets just about previous recessions, previous housing cycles, and to us it looks like the outlier is 2008 in terms of how deep housing price declines were and how long it took to come back to pre-crash levels. Do you see something like that as feasible? I know you can’t assign a probability or anything like that, but is it even feasible?

John:
So, that is the data and that’s exactly what it says when you chart it nationally. If you chart it locally, you’ll see that there are other precedents where things have taken just as long. So, like the S&L crisis happened in the mid-eighties in Houston, it fell for four or five years and took another nine years to come back.

Dave:
Wow.

John:
It happened in California in 1990. I mean, my wife and I bought our first home in ’91 20% off the initial asking price and sold it five years later for a loss.

Dave:
Whoa.

John:
And then seven, eight years later, it came back. Yeah, so this has happened. Yeah, look at the construction starts in the local markets. Now, I’m not saying that’s going to happen again. Those were all financial crisis. You know what happened last time before than that, it was the collapse of the S&L industry. There’s certainly no financial crisis that I’m aware of happening in real estate. If they were lending on Bitcoin or lending against hedge fund portfolios or something, then there could be one, but I don’t think it should play out like that, and we are undersupplied, our view is by about 1,700,000 houses right now. That’s a lot of undersupply. As we mentioned earlier, the apartment market is completely full. Until we finish all those apartments under construction, that’s going to stay the case. Yeah, it shouldn’t be something like you just outlined.

Jamil:
So, do you think the… Because we were sort of playing with this number of 10%, right, a 10% reduction in value, and do you think the 1.7 million houses that we’re short, do you think that’s what backstops that from a crash?

John:
Well, a simple demand supply chart, I think demands and rents have already corrected for that supply. So, probably priced out of those 1,700,000 people. So, as you drop rents or as you drop home prices, you allow those 1,700,000 to split up with their roommate or whatever they’re going to do and get their own place. So, I do think there’s an affordability component to that, but yes, the fact that we’re entering this undersupplied rather than oversupplied, which is the case in 2006 is a far better situation to be in.

Dave:
So, I’ll ask you the question probably on the mind of all of our audiences. Are better buying opportunities sometime in the near future rather than today because in your mind prices, values are going to fall?

John:
Well, the flippers have told us that. So, your listeners have already said, “My borrowing costs are up. I’m not going to take a bet on home price appreciation like I used to so I’m going to buy at a lower percentage of ARV,” and this woman, Kyla Scanlon has coined this term calling it a vibecession. We’re not in a recession, but it feels like it, the vibe is like we’re in a recession.

Jamil:
I like that.

John:
It’s exactly what you were just talking about. People are hitting pause, and when people hit pause, demand slows. What’s different this time is I don’t think supply is really going to skyrocket. So, that’s good, and people aren’t going to have to go through foreclosure and things like that in a big way. That actually argues for it taking longer to get back to where prices and rents need to be.

Dave:
That’s really interesting. Yeah, I love that, the vibecession. That’s a good point. We did a whole show on this, but basically we’re not technically in a recession, but who really cares because all of the underlying economics have been… The trends are what they are and people are feeling like it’s a recession which is pretty much what matters.

John:
Exactly.

Jamil:
Yeah, I mean, a hangover is a headache, but you can call them both the same thing, right? Either way, it doesn’t feel good.

Dave:
Yeah, exactly, yeah.

John:
Yeah. At least you know that’ll go away.

Jamil:
So, is there a way for a fix and flipper to bake in their forecasting? Because the bottom line is is that when we do this full-time for a business, right, it’s very difficult to just pause and wait and say, “Okay, look, I’m not going to purchase right now. I’m not going to…” Because you’ve got crews that you need to be responsible for. You have wages to pay. There’s things that need to keep the machine moving because if you don’t keep the ball moving, the entire thing falls apart, and then reassembling that later on is next to impossible, or it looks really different from what it looked like right now.
And so, I’ve seen a lot of rehabbers that I work with at least, they’re saying, “Look, Jamil, we can’t pause. It’s impossible for us to pause. We’ve got way too many people that we’re responsible for. We have a lot of inventory that we’re holding. We’re going to continue pressing forward, but we’re going to bake in some understanding. We’re going to bake in value, or we’re going to bake in a deceleration in pricing,” whatever you want to call it. What would you say to a fix and flipper that is trying to orchestrate a business plan for the next 12 months? How would you advise them?

John:
So, I mean, this has been really interesting for me because everything you just said, you sounded exactly like a home builder. Exactly. “I’ve got all these homes, I’ve got all these people.” What you didn’t say, but is underlying in all this is, “I’ve got a lot of debt that needs to get repaid,” and that is the answer to your question. So, if your debt is low or you’re able to restructure your debt and you can be patient, you’re going to be patient. If you have no choice, you got to go as fast as you can to make sure you pay back your debt, and Dave asked about the builders in the last cycle going under, they had a lot of debt. This cycle, they’ve been able to borrow like 4% fixed rate and it doesn’t mature for six years. So, they’re like, “I can be patient.” Their borrowing literally is like 30% against the asset value or less. If you’re at 70, 80% leverage, you’re in trouble.

Jamil:
You just described how rich they all are right now because they made so much money leading into this. So, when you’ve insulated yourself with all of this, all these years of really, really great returns, you position well to be able to come out of this at least intact.

John:
So, if your listeners have sold some house and stuck some cash in the bank and paid down their debt, they’re fine, but if everybody rolled it back to just keep buying more homes, which I know there’s a tax incentive to do that, you’re taking a lot of risk in a cyclical industry, and everybody knows housing is cyclical.

Jamil:
So, the depreciation buyer might not appreciate what you just said.

John:
Well, but they can hold on and enjoy the depreciation for a very long time. I mean, if you’re in a shape where you can just rent this out and refinance with some long-term debt, you’re fine. I know people that did that in the last cycle too. Some builders actually did that. There’s a famous one in Houston, did that with 4,000 homes that were intended to be for sale and they ended up renting them all out. It was awesome. It’s a different lender on a perm financing on something like that so you can get a fixed-rate debt too. I mean, maybe not from everybody, but that’s how you get through. You rent it out.

Dave:
John, this has been super helpful. I’m curious if you have any other things you think our audience of aspiring and active real estate investors should know about this about the housing market or where you think things are going.

John:
I’ll end on a positive because I felt like a little bit of a Debbie Downer today. I think this is not discussed enough. The housing boom of the early 2000s was 18 to 20 years ago and homes need a remodel on average, we’ve got the census data, 20 to 25 years after they’re built. So, the number of old, tired homes that need a refresh is massive. We have a lot of clients who are building products, clients who sell to the remodelers. We’re very bullish on remodeling and the need for rehabbing homes, purely due to the number of homes that was built 20 years ago.

Dave:
Oh, that’s fascinating. I didn’t ever think about that.

Jamil:
To my taste, Dave, I can’t live in a house that hasn’t been remodeled five years ago.

Dave:
Oh, I know, I know you buy a new house every year, Jamil. But do you think it’s possible, John, just curious if builders have all these people they’re trying to employ and they don’t want to build, would they reallocate resources towards remodeling? Is that possible?

John:
To some extent, but they’re also entering this with a labor shortage. So, it’s not like they have too many people they’re trying to… And actually, home builders are different because their trades are on somebody else’s payroll, but there’s been such a trade shortage here, I think some of those trades will flip to remodeling. In fact, I’m sure of that.

Dave:
Yeah, that’ll be interesting to see. John, I have one last question and it’s entirely selfish. I feel like the housing market is very confusing and so is the economy right now. In your 21-year history of looking at housing market data, how does this stack up in terms of complexity and normality, I guess?

John:
This is about as complicated as I can remember, but I think I would’ve answered that question the same over the last 20 years. It just seems to get more complicated.

Dave:
Yeah.

John:
There’s more things going on, and as I mentioned, there’s more data to analyze, like, “Oh my god, I hadn’t thought of that.” This flipper stuff, iBuyers, who was talking about iBuyers before? Yeah, it’s super complicated which actually is kind of good for our business.

Dave:
Yeah, it’s good for our podcast. That’s why we created it. But yeah. I mean, I think it’s reassuring to know for people who are new to this industry that this is complicated, that if you’re listening and feel a little bit confused about the economy, you’re not the only one.

John:
I think the guys in charge of the economy are confused about the economy.

Dave:
That is a painful truth.

Jamil:
Oh boy.

John:
When the Fed chair is apologizing for getting it wrong, don’t feel bad that you got it wrong.

Dave:
All right, John. Well, we’re very grateful. As investors and just people interested in the economy, we’re very grateful to have some time with someone like you with such great experience and access to so much unique information. So, thank you so much, and for anyone listening, if you want to connect with John, it sounds like the best place to do that is on your website or is there anywhere else they should do that, John?

John:
There’s a form on our website that would be awesome. Just fill out the form and say, “I want to be in the fix and flip survey,” or you can email it, [email protected] Someone will get back to you.

Dave:
All right. Great. John, thanks so much for joining us.

John:
All right. Take care.

Dave:
Dude, I feel like we need Kathy here to calm me down. We need to call her so we could have her soothsay to us for a while and make me feel better.

Jamil:
Right? That was sobering and depressing, but at the same time really interesting, right? I mean, I would have never guessed that 19% of the properties owned are just mom and pop investors. My eyes have been on these institutional investors in Wall Street, and it’s like one of those moments where you realize that you’ve been diverted, your attention’s been diverted to the wrong thing, and meanwhile, the actual situation is happening behind the scenes, and it was incredible to hear John describe that.

Dave:
Totally. Yeah, I think it’s one of these things that you look at data, read about data where it’s like is institutional investors going up, probably, but just with inventory and other stuff in the housing market right now. Is it going up from 1% to 1.5%? Will that impact a market? Sure. Is it going to impact the national housing market? Nah, probably not that much. So, it’s really important to get those sobering facts from someone like John who obviously knows. I guess, what I feel like if the housing market goes down, that obviously is bad for homeowners, for a lot of investors. That sucks. I think what’s making me just feel sad right now is just the lack of consensus. It’s like every person you talk to, it’s completely different, and the only truth is that no one knows right now, and it’s honestly great. It’s so good to have an alternative perspective. It’s so, so important because we’ve had other really prestigious analysts like Logan Mohtashami and Rick Sharga on the show, super experienced, saying something pretty different from that.

Jamil:
Totally different.

Dave:
I think the theme though that we’ve seen through the last couple shows is every market is going to be really different from here on out, and you really just got to understand your niche.

Jamil:
I think that’s really important, Dave, and I think that a reason why the BiggerPockets audience really needs to pay attention to this is because no one is going to give you the silver lining or that one-stop-shop answer. You’ve got to get into your local RIAs. You’ve got to get into your local marketplace. You’ve got to talk to the buyers out there. You’ve got to talk to the rehabbers out there. You’ve got to talk to the lenders out there, the hard money lenders. You’ve got to really do research for yourself to understand am I in a market right now that has the fundamentals that are going to remain strong so that I can make a decision. I mean, guys, he did not say that it was bad everywhere. In fact, there was a lot of positivity in those markets where that had strong job growth, right? If you’ve got strong job growth in your market, you really do have some insulation. So, paying attention to these key market indicators are super important in making a decision on how you’re going to progress your real estate investing business.

Dave:
Honestly, something about this makes me a little bit excited and feel like I have a bit of an advantage because the last two years it’s like you just throw a dart at a dartboard and you’re going to make some money. Now, it’s kind of like a researcher’s market. If you’re someone who likes to understand what’s really going on in your market, you’re going to have a huge advantage, and listen, there’s flip sides to both of these things. I feel like people I talk to, half the people are like, “Oh no, I’m so fearful of housing markets going down,” and the other half are like, “Can’t wait, can’t wait till the housing market goes down.”
And just the truth is that every market, like he said, even in Charlotte, new construction is different from existing homes. The north side is different from the east and west side. Single family assets are different from multi-family assets. There are going to be opportunities, but you’re going to have to try harder, and honestly, that’s a good thing. When it was easy the last few years, look how much competition you were facing. Everyone was out there trying to buy stuff because it was so easy. When it gets harder, the people who are committed to it and the people who really understand it have an advantage. And so, not wishing for anyone to lose money, but I’m just saying it means there will be opportunity, if John’s right. Who knows?

Jamil:
Yeah. Well, I think that’s great. You are right, and the good news, guys, is that you’re tuning into a podcast that’s going to keep you abreast of all of the information that we can find out there, right? We’re going to hear from all of the point of views, whether it be from somebody with a really optimistic, robust point of view of where things are going to somebody who’s looking at it from a different perspective. Always know that if you’re making decisions based on data that you’re doing a much better job than people that are just throwing darts at a dartboard.

Dave:
Totally dude. I mean, I think the thing I love about this show and everyone who’s on this show, I’m going to toot our own horn a little bit, is everyone just seems so willing to learn. We’re just taking information and changing your opinion, and I think that’s so important. So many people you see have said, “The market’s going to crash,” and they’ve been saying it for seven years. They won’t admit that they were wrong seven years ago, and we don’t know what’s going to happen. I don’t know if John’s right or if Logan’s right or whoever, but what we can commit to you is that we’re going to keep just bringing on people who are smart and who understand the industry and give you as much information possible, and hopefully, you can make good investing decisions with that. All right, man. Well, it was great having you on, really appreciate it, and hopefully we’ll have you again soon.

Jamil:
Always good to see you, brother.

Dave:
Well, thank you everyone for listening. We will see you all again next week. On the Market is created by me, Dave Meyer, and Kaylin Bennett, produced by Kaylin Bennett, editing by Joel Ascarza and Onyx Media, copywriting by Nate Weintraub, and a very special thanks to the entire BiggerPockets team. The content on the show, On the Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.

David:
This is the Bigger Pockets Podcast, Show 656.

Trevor:
And I think it’s about being proactive, and then also letting your ego take a backseat because as you guys know too, everyone in the real estate business is not the most friendly person. So you can get into these conversations where you got to be careful not to have a pissing contest with someone and realize that the greater good of everyone is just getting the deal closed.

David:
What’s going on everyone? This is David Greene, your host of the Bigger Pockets Real Estate podcast, here today with my co-host, Rob Abasolo. In today’s show, we interview brothers Trevor and Tyler Sarter, who run a business together that does all things real estate. These two brothers focus on helping other people make money through real estate while also earning a living for themselves, former basketball players that have learned the importance of chemistry, both with each other and with their clients, and most importantly, doing whatever it takes to win, which in this case is getting the deal done. In this episode, we dive pretty deep into the mindset required to succeed as well as some practical tips that you can use to build your own buyer’s list, find motivated sellers, and make sure you get to the closing table. Rob, what were some of your favorite parts from today’s show?

Rob:
Yeah, I really like a good brother dynamic, and this is just a good wholesome episode with two brothers, former college basketball players. And they actually talked about the number one thing that they learned from basketball that fuels their very successful real estate business today, so I thought that was really fun. And I think for them, their big thing is how to keep the art of the deal alive, right? How to keep any deal alive by any means necessary, what you have to do to get to that closing table and sign those documents and close that deal. So I thought this was a really, really fun episode just to kind of explore the brother dynamic and see how they run their business from day-to-day.

David:
I also like when you see two brothers that actually get along, because oftentimes families don’t get along. So when you see siblings that not only they get along or it appears so, but they’ve built a successful business together, they get to work together, I thought that was pretty cool.

Rob:
Yeah, yeah. But before we get into the episode, today’s quick, quick, quick, quick tip is brought to you by David Green.

David:
Nicely done, my man. Today’s quick tip is-

Rob:
Thank you. Thank you.

David:
We are heading into the traditionally slow season by seasonality for real estate, which means there are usually less buyers competing with you to get that great deal. So when you combine this with rising interest rates, fears about a recession, and the constant negativity that we’re seeing in the news, coupled with a slowdown in the competition that you have to buy houses, you are likely to find a better deal now more than at any other times. My advice to you would be to target houses that have been on the market longer than their competition, and reach out to the real estate agents to find out how motivated the sellers are and then write very aggressive offers and hope for the best.

Rob:
And that was today’s quick, quick, quick, quick tip.

David:
All right. We’re going to bring in today’s guess if you would be so kind, leave us a comment on YouTube and let us know what you thought about today’s show. If there was questions that you wish we would have asked or what you liked, also please go give us a review online on the Apple Podcast app, Spotify, Stitcher, wherever you listen to your podcasts, those really help this podcast get to more people. All right. Let’s bring in the brothers. Trevor and Tyler Sarter, welcome to the Bigger Pockets Podcast. How are you two doing today?

Tyler:
I’m hanging in there. David, how about yourselves?

Trevor:
Doing great.

David:
I’m hosting the best podcast in the entire world. I couldn’t be doing better. And I get to talk to you two fine former basketball players at a college level, men after my own heart. And we get to join that with real estate, so I’m doing good. Thanks for asking. If you don’t mind, tell me a little bit about the business that you two work in as well as your personal portfolios to get started.

Tyler:
For sure. So we’re more so a full service real estate investment firm company, per se, definitely heavy in the wholesale arena, do some fix and flips, and then also advise and consult a lot of international buyers, so that’s pretty much the gist of it. I’ll let my brother weigh in if I left anything out.

Trevor:
Yeah. I think that kind of describes what we do. When we started this company, Promise Land Realty, in 2015, it was pretty much solely focused on wholesaling and just being a cash building platform for where we were in our careers at that time. Since then, we’ve grown to do our own fix and flips. We hold just a couple rentals. We’ve offloaded a bunch of them while we still had good margins there, but now we also consult with international investors to get their short-term and long-term portfolios built up.

David:
All right. So you said you’re a full-time real estate firm. Are you guys doing direct mail campaigns to get deals coming in or are you more representing other investors, finding deals for them?

Tyler:
So both. So we use our website as a platform to get deals, to actually source deals from investors. And then, we also use it as our vehicle to offload portfolios for the clients that we service, so we’ve focused on both sides, acquisition, and sales. So we’re more so of a full service real estate investment firm.

David:
So give me an example of the different types of clients that you guys might get and the ways you help these different people.

Tyler:
Right. So right now, we’ve been working on a deal for about a year, and I won’t go super in depth here, but it’s an international buyer and the property that he was targeting, unfortunately had some title issues. So we were able to connect him with an attorney to complete the quiet title process, which took about a year. Also, coordinate inspections, there were some issues with the basement on that property, kind of rectify those issues or point him in the right direction of the best help, and then get everything back on track to a year later now being able to finally close this deal. So that’s just a kind of brief example of keeping the deal alive and kind of what we specialize in and working with investors who don’t have boots on the ground.

Rob:
Tell us why you worked on this deal for a year. I’ve got to imagine there was some financial incentive, right? Because if it was a $30,000 flip, you probably wouldn’t work so hard for a year, but I’ve got to imagine there’s something here, right?

Tyler:
Right. Well, it’s kind of what we do. We stick the flag in the ground. We go all the way to the end with every deal that we’re involved in, win, lose, or draw. And that’s what kind of makes us stand out from other wholesalers or real estate investors. It’s kind of like a “never say die” mantra, and it leads to repeat business. Yeah, the wholesale fees are good, but real estate is a relationship business. And doing good business, going the extra mile for a client, leads to referrals or repeat business from that client, so that’s kind of what we built our business around.

Rob:
Okay. So when getting started in real estate, you obviously started in the wholesaling side of things. What was your reason there? Everyone’s got a lot of reasons for starting out in wholesale, and obviously that’s the big bread and butter right now of your company, too. Was there something that attracted you to that? Did you have a mentor that brought you into it, because it’s always a thing about circumstance, right? So what was the initial draw to that section or that niche of the industry?

Trevor:
Well, initially I started off marketing and managing bank-owned properties quite some time before we started the wholesale business, so in ’07, and my little brother was in high school. We got to be on the good side, if you will, of the economic crash and in terms of being signed up directly with the banks to help manage their inventory. So from there, I was able to get listings as an REO agent for pennies on the dollar and make good commissions. But then in hindsight, we thought about those investors that were actually making those purchases and that were able to cash out once the economic crash was over, and it was kind of like, “How do we become that guy? Right? How do we become the person that’s actually capitalizing in, that has less liability than say an agent?”
So when we got back together, started this kind of trek to figure out what that looks like. As far as starting Promise Land Realty, my brother was able to go up to Baltimore and become an intern with Jay Morrison and he got the textbook and sent it to me. And we learned about this thing, wholesaling, where we already had an idea of how to have a Rolodex of buyers and sellers. But now, with this new weapon, if you will, it kind of changed our mind state and expanded us from just being local in Michigan to possibly having a nationwide business.

Rob:
Okay. So Trevor, you started out, you were already kind of in real estate, Tyler came to the table. Is that right?

Trevor:
Yeah.

Rob:
And then you guys sort of came together. Now you have this firm. I’m kind of curious, what role do you take on out of the two? And then Tyler, I’d like to hear from you, what do you do and how do you guys complement each other as brothers in this? Because I know that a little bit of a family dynamic here can sometimes either complicate things or excel things.

Tyler:
From my perspective, I mostly deal with acquisitions and bringing properties into the pipeline, so going out there and sourcing deals, connecting with investors, and kind of solving their problem. And then my brother, and I’ll let him speak after this, he deals more so with offloading the properties or working with the buyer. So we’re like peanut butter and jelly, so to speak, you can’t have one without the other.

Trevor:
For sure, for sure. And just to that point, this deal he was describing and why we do take on deals for that long is because he actually has a relationship with the seller, and I myself have a relationship, personal relationship, with the buyer. We’ve closed several deals. The guy’s a real cool guy, straight shooter. And it was a great property that I wanted him to have after we had done so much work. So that’s just an example of one of many deals that’s been like that where my brother has had some sort of relationship within his network with the seller and I’ve had a direct relationship with the buyer and we’ve been able to make it work.

Rob:
That’s really cool. And I think in kind of digging into your story a little bit here, I found out that one of the first deals you’ve ever closed was actually a church. Can you tell us a little bit about that? How did that come to fruition?

Tyler:
Yeah. So that was our first deal. It was actually a storefront church that we were able to wholesale to another investor, and then the church was repurposed into a small grocery store. So that actually came through a friend of mine, Brandon Brand, who’s a real estate investor in Detroit. So Brandon, if you’re listening to this, thank you. We appreciate you. But it was like just jumping out there, and we got our wholesale contract. We’ve got a friend who needs to offload a property at the time, and just throwing our hat in there. We were using all type of tactics at that point, going to Craigslist, blasting out emails, violating all type of email rules at that time. We were just novice wholesalers, so yeah. But we got it done in a pretty short amount of time, so it was a good experience for all of us involved,

Trevor:
Quite a few of our deals, as I was taking notes for this, quite a few of our deals have been helping out friends, even childhood friends. One of the last closings we had together in Detroit was for the Chapman’s, who is my brother’s childhood friend. And that was a real smooth deal, one of those just dream deals. The guy comes in, does the inspection, two weeks later closes. And we also did another deal for one of my real close friends who was having issues with substances at that time, got behind with HOA like $18,000, and we were able to help him sell it. And he actually netted a $55,000 profit, was able to kind of turn his life around. So I think as we started getting into it, it became about more than just the money, knowing that we could actually solve some of our friends’ life problems and still earn a living at the same time.

David:
All right. So give me some stories that you guys have had with a deal that you thought was going to fall apart and maybe what you did to keep that deal alive.

Trevor:
So this is actually a deal that we just closed, what, about two weeks ago?

Tyler:
Yeah, about two weeks ago.

Trevor:
About two weeks ago. And actually, when the deal came in, it came in through a buddy of Tyler’s, so it was already kind of like a daisy chain. And so we’re like, “Okay. Let’s see what we can do,” because we didn’t have any attachment to the seller at all, really. And once we started fishing up interest, it became real frustrating because we couldn’t get any answers. So we kind of gave our guy who gave us the lead, we kind of gave him every chance, “Okay, can you get answers back? What’s going on?” This went on for probably about a month and a half. And so, finally he kind of threw his hands up like, “Man, I don’t know what’s going on.” So Ty and I got together, I reached out to the seller, got him under contract with the expectation of closing in three weeks, because this is a no-brainer in Detroit, all brick, two family flat, paying tenants, in good condition, just a decently moving deal.

Tyler:
A layup, yeah.

Trevor:
A layup, supposed to be a layup. So I reached out within my network to source one of my investors in Detroit who’s a real rascal. The guy is a real trash talker, but a guy who you can’t leave him alone because he’s probably going to pull through, but you want to leave him alone because he’s so full of crap. So this guy gets in the deal. Now, this seller we’re dealing with is a man by the name of Mr. Tally, who’s 91 years old. Okay? So he’s looking to just cash out and go on his way with his wife.
So our guy, Rodney, keeps telling us, “Okay. I’ll be able to close this out two weeks, no problem.” So this is in early April, I believe. So he’s like, “Two weeks, no problem.” So every week it’s something else. So, Mr. Tally has a CPA at first. They’re on us because it’s not even him, so he is like, “What’s going on with the deal, guys? We’re trying to hang in with you guys.” So long story short, Rod was getting financed by another guy and then trying to set up a double close to a whole nother lady who we had no idea about until like two months in. But we finally were able to line up all the stars after what, about five, six different delays and get it done. And we still-

Tyler:
After closing without funding the deal first, and then funding the deal probably two weeks later or something like that. So it’s all about managing people’s expectations, knowing your buyer and your seller’s personalities, and being able to keep everybody in, keep everybody engaged until that wire gets in the air and it closes. So I think that’s a good example of us keeping at it.

Trevor:
Yeah. And even after, because a lot of people, and you guys can attest to this, when the deal gets closed, they’re done with it. But it takes a real professional to really follow up, making sure, especially in a tenant-occupied situation that the keys are transferred, water bill gets turned over, all those things like that.

Rob:
We just closed on a hotel, and there were so many components to making sure that that transition went smoothly, that in retrospect, we probably would’ve made a few different decisions moving into it, but we figured it out along the way. And I think one of the things that I really like about y’alls story here is I see a theme and the theme is persistent. You guys are very persistent with your deals, right?

Tyler:
Absolutely.

Rob:
And you talked about how you closed on a deal that took you a year. Most people probably would have walked away from that, especially if it was a wholesale contract. But you guys kept with it, this deal right here, kind of dealing with the buyer and everything like that. So I know that one of your specialties is the art of keeping the deal alive. Do you think you can walk us through some tangible steps on how people can do that and how they can just make their way to the closing table at all costs?

Tyler:
Right. So a few ways that immediately come to mind is when you’re in a deal and you’re working with a buyer and seller, transparency and transfer of information is imperative, so keeping each side updated with new information constantly. It can be small or big. If title work came back, following up that, following up and sending it to both parties immediately, addressing any issues that may come up with a deal, immediately following up on every email chain, coordinating the inspections, collecting your END, confirming your wiring instructions with your buyer and your seller. Basically, leaving nothing to chance in a real estate deal and making it easy for both sides to close, I think is what you get paid for as a wholesaler. It’s more than just assigning a property. It’s about doing all the dirty work to make sure that you get to that closing table and you collect your commission at the end of the day,

David:
Something I spend a lot of time teaching the people that work for me on the real estate team, or it works with investing as well, is real estate is this unique industry where you can do 99% of the job and you get paid exactly the same if you don’t get to 100% as if you do 1%. There is this often a subconscious belief that we get from working in the W2 world, where if you work a half day at work, you get a half day’s pay. So it’s not as good as a whole day, but it’s still something. And then you get into our world, and it’s so discouraging because you feel like you’re working so hard, but then you’re making no money, because if you don’t get all the way to the finish line, it’s nothing. It’s everything or nothing in our world.
And I’ll see that if you don’t have that killer instinct, that, “It does not matter. I will do whatever it takes. It has to close.” You’re not going to last in this industry very long, because you’re just going to be burning a ton of energy and not getting a result. Do you guys mind sharing a little bit about your experiences with that concept?

Tyler:
Yeah, definitely.

Trevor:
I was just going to say, to your point, I definitely agree with you. But I have to add something to that, that keeps me having faith as I’ve been doing this full-time for so long, is on the other side of the coin is no work is done in vain. So yeah, you might have a couple closings where you did everything you could do and you kind of fell short. But something in that last deal that didn’t happen prepares you for the next deal, because either you’re going to win or you’re going to learn, basically is kind of my ideology with it.
But to your point, yes, for sure. As a grown person, knowing that we have to have funds to pay our bills, you have to check every box off to close, yeah. And I think that’s one thing that kind of separates the killers from the wannabees is that one instinct to where it’s like by any means necessary, and everything that’s physically possible and legal, within legal bounds, you have to be willing to do that if you want a consistent check in this real estate business.

Tyler:
Right. It’s like you eat what you kill. There’s another mantra we have, it’s called “lions only.” In this business, if you want to be successful, it’s lions only. So basically, doing whatever it takes. I can go into a very quick example of what I mean by that. There was a commercial deal actually, I just helped sell the barber shop that I go to on a weekly basis. So the seller was out of state, New York seller, we were supposed to close on a Friday, mail-away closing.
The title company gets the closing documents out late. His originals all have to be signed in blue. So he gets it, he is going to mail it back to me to obviously save time. I’m so on it that I hold the package for delivery because we have a 1:00 PM closing time on Monday. I go, get there, get to the FedEx location, pick up his originals. He has a partner that I have to meet. Drive it 30 minutes to meet his partner, get it notarized at the local UPS Store, then take the documents myself to closing, just to make sure that we get it done in time, all because the seller was initially inconvenienced by the title company getting the closing package out late. So that’s just some of the stuff that you have to do if you want to keep a good name in this business and you want to actually get deals done. You have to take things into your own hands.

David:
Trevor, what’s something that you’ve learned as a former college basketball player? For those that didn’t play basketball in general, to understand why I’m bringing this up, everyone plays basketball. It’s not like baseball or football where you’ve got to get a whole team together, and you can just go grab your buddies and go play baseball or something. Football is the same way, right? Once you get out of school, there’s not a football league you could go join in most places. But there’s always basketball. Every gym you go to, every playground, you can grab your buddies. So everyone grows up playing basketball, which means if you want to play it at a high level, it is incredibly competitive. A lot of people are all chasing that same dream. So in order just to play at college, you have to be very, very good and very, very driven. And I’m curious, what are some of the skills that you learned in that environment that are now helping you be successful with your role in the company now?

Trevor:
I think the number one thing that I learned from basketball was that you can get better. When I was in, I think, seventh grade, I got cut. And it was the first time that I got cut from the AAU team, and it crushed me. I did skip a grade, so I was a year younger, but still I thought I was real good. And we’re from Michigan. That next year, man, I shoveled the snow, anything. I shot every day. And I was starting on that next year, but it just showed me if you put the work in, you can actually get better. You don’t have to stay at the same level if you don’t want to, as long as you’re willing to put the work in. And I think that’s one thing that I kind of carried into the real estate business with my brother and I, is a lot of things we didn’t know starting off, but I was like, “Okay, as long as we keep studying, as long as we keep making calls, showing up, eventually we’ll get better, and the numbers will reflect.” And that did happen.

Tyler:
That’s a great question, by the way. But I would have to say, when you start off, it’s kind of like street ball, and then you go into organized basketball. And then from being an organized basketball team, you look at a team that’s intricate, or has very detailed, like the Golden State Warriors. So just that maturation in our business; when you first start off, you’re playing street ball. You’re just trying to score a basket. And then you understand the rules of the game and you become more organized. And then you become a fine-tuned machine like the Golden State Warriors. So I think we look at great sports organizations, Chicago Bulls, we mentioned them earlier, the Detroit Pistons of 2004. And in the 1980s with Isaiah Thomas, being a well-built organization and kind of following those teams. We watch those games in the background when we’re writing PAs or sending assignment agreements. It’s kind of like nostalgia. It definitely keeps us worn, for sure.

David:
Something I learned about really well-run sports teams that helped me in business that I needed, was I looked at business like there’s a blueprint that everyone follows to be good at this thing. And it’s always the same for everyone, as if you could build a sports team just by, I get five players at these positions. The better players I have, the better the team is going to be. And it’s not that simple. The chemistry between the players means a lot. And you see the really good teams, like we’ll take the Golden State Warriors. They’re built around a star, like let’s say Stephen Curry, and then they look for support pieces that have a better chemistry with Stephen than they would on… So if you took Draymond Green off of the Warriors, he’d be a good player. He would not be nearly as valuable to another team as he is on that team, so they get more out of each person they have.
And when I started approaching my business like that, I’m the Stephen Curry of this business. I need people that support my unique strengths, my skills. And that would be different than Rob’s business, because he has different strengths, and people that might support me might be useless in his organization and vice versa. I guess it was hard for me to give myself permission to admit I’m that important in this business. And I need people to surround me that will help me be good. Would you guys mind sharing what your evolution was like, where you realized, “Hey, I am good at this thing. And I’ve got to own that and put people around me that allow me to be good at it.” We’ll start with you, Tyler.

Tyler:
I think, for sure, just being the expert in my peer group, my circle of influence, with regards to real estate. It took me a long time to really step into that gift that I have, just my passion for helping people through real estate, my passion for continued knowledge within the industry and different parts of the industry, as we are trying to transition into more commercial and then into development. I definitely think that’s the natural progression, and just stepping into that and just acknowledging your talents and accepting your gifts and using them, because if you don’t use them, you’ll squander what you’re really supposed to be doing and it’ll be taken away from you. So that’s what did it for me.

Trevor:
Yeah. I think, especially starting off, it’s a matter of fit and feel, especially when you’re trying to form different teams. And it’s part of overcoming ego and just looking at the facts from where you are gifted at, because I know, and this has just been from facts, from proof of concept. If I get the right people around me, I’m good at developing other leaders. And so, that’s kind of what I look to now, is if someone has potential, as long as they want to work and as long as they want to learn, I can put them in a position to help me more by becoming the best them.
But that doesn’t happen if the environment is not safe for me to do what I do. So I definitely hear what you’re saying on that, Dave. It’s so key to have the right energy too, because you might have… Look at the Brooklyn Nets. You might have super killers on your team, but you can’t win because everybody doesn’t see it the same way. So I think that’s the difference between a good squad full of guys in a championship ball club is that chemistry, that communication, that sort of thing to make this work.

Tyler:
Being on the same page.

Trevor:
Being on the same page.

Tyler:
Understanding our system and what works for us like you were saying, David, because the Princeton offense is not the same as the triangle offense. So understanding what our system is and bringing in the players who fit in our offense and can make things work with us.

David:
Yeah. I had a cop I worked with, and we were actually learning building search stuff, which is incredibly difficult. I won’t go too deep into it, but it feels exactly like when you’re playing a sport like basketball. Depending on if this person goes this way, you’ve got to go this way. You’re quickly adapting all the time. There’s new stuff getting thrown at you. It’s very challenging. And they were talking to us about teamwork and he said, “Look. Let’s say you take a team of NFL All-Stars. You take the best players from the entire league. You put them on the same team, and the next day they’ve got to go play the New England Patriots. Which team is going to win?

Tyler:
The New England Patriots.

David:
It’s pretty obvious, right? The Patriots are going to crush them, right?

Tyler:
Yeah.

David:
And it just was an example of, it’s easy to not factor in chemistry when you’re looking at building the team. Do I work well with this person? Do we communicate well? Do they have a complimentary skill set? You don’t want a team full of five point guards. And I think a lot of people looking at the industry from the outside, it’s very easy to just think, “Oh, I just need to find people. Build my team, find a person that’s good at whatever they do.” But no, you’ve got to find a person that works with you because you’re building it around you. And that was a big step for me as I built things. Rob, did you have a similar sort of epiphany, or are you still trying to figure that out?

Rob:
Yeah. I’m kind of in the throes of it. I’m trying to keep up with all the basketball lingo here. Admittedly, I’m not very good at basketball, and that will be revealed very quickly in this podcast episode. But I will say I did watch The Last Dance, and so I understand the triangle offense thing. I’m pretty sure I can keep up with that. But, yeah.

David:
Robby.

Rob:
And I took that personally. But yeah, I think ultimately for me, it does come down to team chemistry, right, because everybody really compliments each other. I heard a very important phrase that a mentor told me one time, and he said, “If we are the same, then one of us is unnecessary.” Right? And so, that is something that has really resonated with me ever since, because me and my business partner, he’s kind of like the COO of my real estate business, and we’re both very visionary and very kind of big picture thinking. And so, what I kind of came to realize was we both really can’t be working side by side on the same project because we both do the exact same thing, and we both think the exact same way and we execute the exact same way.
And so, there’s a lot of times where we were working on a project and stuff was falling through the cracks because it’s like, “Oh, I thought you were doing that.” And it’s like, “No, I thought you were doing that.” And it’s like, “Well, I usually do the big picture stuff.” And he’s like, “Me, too.” So we kind of learned that in order for us to function as a team, we sort of had to lead our own projects. And there’s a lot more collaboration that comes from that because there’s not the pressure of having to double fill the same role, right? And so, I think for us that’s something that we kind of learned, not necessarily the hard way. I think we’re happy to have gotten there, but I think we’ve seen a lot more progress in our own systems and our own practices as we’ve kind of taken on different projects and can kind of come together for bigger strategic meetings, but execute on our own different projects, if that makes sense.

Tyler:
Absolutely.

Rob:
Yeah. So I kind of wanted to keep jamming a little bit here on the keeping the deal alive, because I know you talked about the persistence, we’ve talked about team chemistry here. And I know one other kind of aspect of this was being solution-oriented. I know you kind of spoke to this a little bit with one of the deals, of kind of having to make sure the information was all being transferred and everything like that. But can you give us a little bit more in the world of being solution-oriented and why this is so important to keeping a deal alive?

Tyler:
Yeah. I think just in real estate, in a real estate transaction, nothing is ever going to go as planned. I think you two can attest to that, the unexpected circumstances that arise. And it’s a mentality, it’s a mindset, being solution-oriented, and just having that approach, knowing going in, “Okay. It says 30 days, this deal is going to close in 30 days. But we hope. We’re going to do everything within our power to make it close. We’re going to control all the variables that we can control personally to make it close. But being able to accept that when variables outside of our control arise, that we’re going to be solution-oriented. If the title’s not clear, okay, we’re going to order a FOIA. We’re going to wait for the FOIA to come in. If the FOIA doesn’t cure the title, then we’re going to pursue a quiet title suit. If it takes a year, it takes a year. But we’re going to get the deal done no matter what.” That’s kind of my approach. And I think you have to have that to be a successful real estate investor.

Trevor:
And I think it’s about being proactive, and then also letting your ego take a backseat, because as you guys know too, everyone in the real estate business is not the most friendly person. So you can get into these conversations where you’ve got to be careful not to have a pissing contest with someone and realize that the greater good of everyone is just getting the deal closed. Because there’s been times, people talk to you crazy on the phone, and you could look at what you’ve got going and be like, “Yeah, I don’t need this. I don’t have to sit here and listen to this.” And in some cases you don’t, right, as long as you’re not being disrespected. But in some cases, you have to just put your ego to the side and be like, “Okay, is this something I can deal with? Yes. What’s going to go ahead and get the deal done will be me doing X, Y, Z.” Instead of beating your chest up against a buyer or a seller, just go ahead and get it done.

Tyler:
How many inspections am I going to coordinate on a specific deal to get it done? As many as it takes. Am I going to wake up and go at 6:00 AM and go get photos of this property? Yes I am. Because that’s just the intangibles to make a buyer or a seller more comfortable to get the deal done.

Rob:
Yeah. So I was wanting to ask because I’m kind of curious, do you feel like you stepping in and making that solution yourself, if that means you have to personally show up at 6:00 AM to take those photos or if you have to actually get your hands dirty, do you consider that a solution? Are you willing to do that? Or is a solution for you more so in the camp of, “Who can I empower to go and do that for me?” How involved are you getting in some of those day-to-day “solutions?”

Tyler:
So, from my perspective, I’m very involved on the day-to-day. If I personally have to do something, I take pride, I enjoy getting my hands dirty, even still, even with I don’t know how many deals we’ve closed. I still like it because it keeps you alive. Real estate is personal. A lot of people don’t do it hands-on, but for me it is hands-on. Eventually, yeah. Of course, we want to create the team to where we don’t have to do these things and we have people on staff, but you always have to be willing to roll up your sleeves, and if push comes to serve, get the job done yourself.

Trevor:
Yeah. We pretty much had a frontline attitude from our days in marketing, managing the bank-owned properties, where we got large amounts of BPOs back then all across the state of Michigan. And so, we had so much work at some points that Tyler in high school would get the photos as well, and we’d split the money. And then, it was like you’re going into some of the wildest neighborhoods in Detroit, no doors on the homes. So coming from that to doing this is kind of like a piece of cake for us now. So we always had that frontline attitude to where it’s got to get done. And dealing with the banks, we were all raised on a timeline, so I think subconsciously we’re still on that 24 hour, 48 hours, it’s been 36 hours, so trying to get items done on time.

Rob:
Yeah. Yeah. And I know one of your underlying philosophies here with keeping the deal alive is also showing up. I’m kind of curious, what do you mean by that? What do you mean by showing up?

Tyler:
Showing up means going the extra mile. So for example, and I’m going to use this as a tip for all real estate investors out there, especially wholesalers, take care of the people who take care of you. So if you’re dealing with a title company and you close a couple of deals and you’re satisfied with your experience, drop them off a gift card. A little appreciation goes a long way. Just recently, I had a deal that closed, the Claremont, which we were speaking about earlier in the podcast. I just dropped off some gift cards to all of the staff at the title company. And that led to the actual processor or the person in control of funding the deals sending us two additional deals for us to work on directly through her properties that she owns herself that she would like to offload. So that’s just one example that I could give. And that’s not your typical example. That’s why I wanted to share it.

David:
That is awesome. And I think that’s a good point to transition into the next segment of our show. It is the fire round. We don’t always do this, but when we have extra intelligent guests, we like to fire questions at them and see what they would say. So I’m going to start, and we will go, how about Tyler then Trevor, for each of these questions. Question number one. Is there anything beginners should know based on your experience in this industry before getting started?

Tyler:
Yeah. So do everything to build your knowledge base before actually trying to get out there and get a deal. So that means tune into this podcast that we’re on right now on Bigger Pockets, join the Bigger Pockets forum. Read as many books as you can, definitely those beginner books, Millionaire Real Estate Investor by Gary Keller, Rich Dad, Poor Dad by Robert, Kiyosaki. Just build your knowledge base so that way, when you’re in the field in live action, you have those reps. So it’ll make your deal go a lot smoother.

Trevor:
Definitely preparing yourself mentally for a grind. And I think the mental preparation is everything, because the majority of what we’re talking about is entrepreneurship. So I think starting to understand entrepreneurship on the basic level is a good start for someone, too, just so you’re kind of braced for some of the frustrations that may occur as you’re trying to pursue your goal. And I definitely agree with my brother in reading as much as you can and getting as knowledgeable as you can. And also, if possible, shadowing someone or finding a mentor. I think that’s so key. Whether you know that person or not, whether it’s someone on YouTube or Bigger Pockets, someone that you can kind of follow their moves to where you can see in reality, it’s doable for you and repeatable for you as well.

Rob:
So a follow-up question on this, how do you go about getting a mentor? Do you have any tips there?

Tyler:
Getting a mentor? You have to seek, you have to go. If you want water, you have to go where the water is. So actually, when I wanted a mentor back in the day, I think my brother mentioned this, it was Jay Morrison at the time. I actually drove to Baltimore, got there early, and helped set up the seminar, and the relationship develop that way. So not just always having your hand out saying, “I want this information. I want this information. I want you to be my mentor.” But adding value to whatever the source that you’re seeking out, adding value to that situation and being selfless is a good way to stand out and secure that mentor relationship, for sure.

Trevor:
On the backside of that, I’m going to say one of the quotes is, “When the pupil is ready, the teacher will appear.” So basically, when you’re taking massive action towards what you’re trying to do, basic human nature is someone who is more experienced will say, “Hey man, tell me what you’re trying to do.” And they might have already been doing it or might be already great at what they do. And when you recognize that same energy within someone else, it’s easy for someone to bring you on board because you’re already actively trying to do it. Whereas a lot of people are just sitting out with their hand out saying, “Oh, why doesn’t anyone help me?” Because they don’t see what you’re doing. I think you can attract mentorship when you’re kind of engaged in process, making mistakes or whatever, and you kind of stumble upon that right person to help you and guide you in the right way.

David:
All right. So any tips from each of you, we’ll start with you, Tyler, on how to go about finding the mentor? I love that piece of advice. “When the pupil is ready, the teacher will appear.” And none of us ever want to hear that. We’re like, “Why can’t I just find someone that’s going to make this easy for me?”

Rob:
Right.

David:
We’ve all been there with that person that wasn’t ready to learn. And it was a disaster for both people. So what advice do you two have about finding a mentor?

Tyler:
For me, is actually going out and seeking, taking action, adding value to the relationship. For me, I went and sought the information out. I drove to Baltimore for a mentor, Jay Morrison, that I was pursuing at the time. And actually helped him, got there early, nobody asked me to do this, got there early to help them set up the event and make sure everything was coordinated for the people. And that led to a good relationship, and actually us getting started with wholesaling was actually through that interaction, and just being willing to go the extra mile and help outside of just having my hand out, being willing to give to get.

David:
All right. Next question. How much money should I spend on tools to get into wholesaling? Do I need to spend money or is there stuff out there for free?

Trevor:
My whole motto is to do everything that you can possibly do for free first and then start spending money, because when we got started, we were really on a shoestring budget. I didn’t even know about MailChimp initially. I was sending a thousand emails out name by name on Gmail, until my buddy was like, “Man, what are you doing? You can sign up with MailChimp and log your CRM that way.” But I would say once you start getting results on the stuff, whether it’s Facebook, whether it’s Craigslist, whether it’s bandit signs, whether it’s calling people on Zillow, I think you exhaust all of those free resources and start getting return and then you start making investments.
So some main investments I think you need to make once you get your wits about you is definitely real estate software, whether that’s REIPro or PropStream or whatever you use, just so you can get accurate data. I think it’s worth spending, tools, on anything that you absolutely need, but outside of just having just a bunch of shiny object syndrome, cool microphones and headphones and all that stuff, I think you need to just invest in stuff that’s going to bring a return first before you start spending a lot of money.

Tyler:
Yeah, definitely. I would say invest in your business, because yourself, you are a business. You need a professional website. You definitely need… It still holds true and true. A lot of people don’t have business cards, but I can’t tell you the amount of times a day that I wish that I had business cards on me. So definitely just investing in the simple things to set up yourself as a legitimate business, as a wholesaler or a real estate investor, not just a wholesaler, just making yourself appeal to your audience or to your target market the way that you want to present yourself in a professional manner. So invest in yourself is what I would say. That’s the best investment you can make.

Rob:
That’s awesome. Yeah. That’s very similar, I think. Trevor said invest in something that’s going to make you money. Investing in yourself and education, you really can’t beat that.

Tyler:
Yeah, for sure.

Rob:
How crucial is it being overly communicative? Can’t I just coast once I’m looking up deals?

Tyler:
Not if you want to get paid. But yeah, I’ll take that one. I think over-communication, and this is something that I learned. I also have a background of working in corporate America. It’s better to over-communicate and not leave things to chance. I think over-communicating gives everyone in the deal confidence that things are progressing. Even the smallest update makes a big difference in just keeping everybody engaged, because that’s a key component to keeping the deal alive is everybody has to be engaged. And the only way to do that is to over-communicate with all parties involved. So it’s definitely a pillar of success, I would say.

Trevor:
I think so as well. I’ve witnessed it as my career is matured. And a lot of the rockstar agents that I do deals with in St. Louis and other places, and even Tyler, I learned a lot from him and over-communicating just to be honest, because I was kind of a coaster because I was closing something like that. I was like, “Oh, it’s good. I’ll check back in with the title company.” And then you check back in and they’re like, “Hey, we don’t got you guys on the schedule.” You’re like, “Hold on. What do you mean?” So yeah, it’s definitely key because it keeps everyone in the game and everyone on the same page. Going back to what we’re saying on chemistry, everybody’s got the same point of view, whereas if you’re communicating with some people and not others, other people are going to be like, “Oh man, I thought this deal was dead.” I’m like, No. We’re closing next Friday.” So it definitely helps to just keep everybody in the same train of thought.

David:
Any cool tricks to find buyers and sellers that either other people aren’t doing or that you found work for you two that are under-utilized?

Tyler:
So, I will start with sellers since that’s more so my wheelhouse, and I’ll let my brother speak to securing buyers. So one thing that I picked up on is contacting people who are behind on property taxes or are maybe in the redemption period of possibly losing their home and offering them, being solution-oriented will say, “Hey, we don’t want you to lose your home for nothing.” So definitely going back, searching a public record. If you’re an agent and have access to last deed recordings, if you’re not an agent, there’s websites out there, Spokeo, where you could find out who the property owner is and have their contact information and just reaching out it. The obstacle is the way. So those are two strategies, especially for inner city markets such as your Detroits, your Baltimores, your Memphis, Tennessees, where there’s a lot of possible tax delinquent homeowners in those situations, definitely that’s one way I would recommend.

Trevor:
As far as buyers, I would say the number one for me is landlords. So these are “for rent” signs, signs that you might see every day. You can call and ask if they’re interested in purchasing more properties. Nine times out of 10, they probably are in the market to purchase something. One of the best ways I learned, especially before COVID and coming back now, is the real estate meetups, joining real estate clubs and getting there face-to-face with buyers, people that are act actively searching for properties in your area, real estate agents. That might be one of the best ways to find buyers for sure, because they’ve kind of automatically got buyers through access to the MLS and their network.
And then, once you build up your website, online lead capture is very good. And I will say for people just starting off, kind of a tricky way is also ghost bandit signs. So just kind of describing a house like a three bed, one bath, fixer upper with a phone number, and kind of trying to build your database that way. And you can’t leave out Facebook Marketplace also is one of the main tools that we used starting up to build our buyers list directly with emails and kind of getting a feel for who’s looking for what and in what regions.

David:
All right. This brings us to the last segment of our show, the world famous-

Speaker 5:
Famous Four.

David:
In this segment of the show, we will fire questions at you and we will let each of you take turns answering the same questions we ask every guest, every show. Tyler, we’ll start with you. What is your favorite real estate book?

Tyler:
Millionaire Real Estate Investor by Gary Keller, for sure, is what I started on. The blue book, the infamous.

Trevor:
I’m going to say the same thing, Millionaire Real Estate Investor, just because it was the most comprehensive book I found that kind of laid it out from start to finish. It was before a lot of other books came out, but that was kind of my bible for so long and how we got started.

Rob:
Okay. Awesome. Great books. Question number two, favorite business book?

Trevor:
So my personal favorite business book is Millionaire Fastlane by M.J. DeMarco. It really kind of revolutionized the way I looked at our business, and it took us up a level from the things I learned from Richest Man in Babylon, if you will, just about finances and what was possible. It kind of really expanded my mindset in terms of what could be possible when you pair real estate with the internet and the other pathways that come from that. So I’m going to say Millionaire Fastlane, for sure.

Tyler:
For me, this book is not directly related to business, but it applies to business in so many facets. I’m going to go with Mastery by Robert Greene. I just feel like that book has a lot of examples of how business leaders and leaders in culture and art and have mastered what they were pursuing. You look at Leonardo DaVinci to Freddie Roach in boxing, and just what all went into them pursuing their craft and mastering themselves in what they’re trying to get after, so that’s one for me.

Rob:
Awesome. And then, when you guys aren’t out there running your own real estate empire as two brothers, what are your hobbies?

Tyler:
So I can start here. I’m actually taking up a new hobby, which is boxing, not professionally or anything like that. But when you’re dealing with all these buyers and sellers, you just need a release. Sometimes you just need to hit that heavy bag. So that is definitely… You can catch me in a boxing gym if I’m not in front of my laptop writing a PA or sending an assignment agreement or researching a property.

Trevor:
Yeah. So I started off boxing too, but chess and boating now, my girlfriend and I, she’s really introduced me to this whole world of boating, so I’m really enjoying that, especially this season. We’ve been on a boat a couple times this summer, so I’m really liking that. And then, chess, I’ve loved that since I was in high school. Actually in Nashville, had a program to teach community youth how to play and we had to tournament, so I really like those things.

David:
All right. Tyler, in your opinion, what sets apart successful investors from those who give up, fail, or never get started?

Tyler:
Action. Taking action separates 99% of the people who succeed or fail. And then, knowing when to say no separates the other 1%. Knowing when to turn down a deal and not pursue an opportunity sometimes is the caveat that a lot of people overlook. I think the worst thing you can do is buy a bad deal or do a bad deal. So having that discernment is what separates the 1% from the 99%.

Trevor:
I’m going to say the will to keep going despite failure and frustration. And I’m also going to say being focused on one thing. I think a lot of people get started, they start on one thing for a while and then they split off in all these directions. And it’s like diverted effort is not as impactful when you’re chasing a million different rabbits. I think that discipline of just staying focused on one thing is what separates successful people from those who aren’t in this business, for sure.

Rob:
Okay. Awesome. Well, lastly, can y’all tell us a little bit about where people can find you on the internet?

Tyler:
For sure. Mostly at our website, if you’re looking for a deal or if you just want… We have other things, audiobooks, eBooks, promiselandrealtyllc.com and also Promise Land Realty on Instagram and on Twitter, where my brother is a super influencer and superstar. Promise Land REI, that is where you can find us. We’d love to interact with you guys and see if we could do some deals together.

Rob:
Awesome. Well, as always, you can find me at Robuilt on YouTube, Robuilt on Instagram. What about you, David? Where can people find you?

David:
You can find me at DavidGreene24, pretty much everywhere. If you got correspondence from me, make sure it’s me. Check the screen name very closely. And then, I’ve often said if I reach out to you for some reason and you’re not sure who you’re talking to, ask for a voice note. At this point, you know what all of our voices sound like, so I think that’s one work around that I encourage people to use.
And then you can follow me on YouTube at David Greene Real Estate. Gentlemen, this has been fantastic, and we really appreciate your time. I always love hearing about how the struggles that we go through at one point in life help us in the next phase of life. I feel like a lot of people are trying to get all the rewards without going through the struggle, and it just doesn’t work.
And I also like that line you dropped about When the pupil is ready, the teacher will appear.” It’s actually up to us to put ourself in the right frame of mind to get what we need to get to the next level. So you guys have a very inspirational story, very cool people to talk with, and I appreciate you guys sharing your information there. Any last words before we let you get out of here?

Tyler:
I just wanted to say thank you to all of the mentors that we’ve had along the way, all of the people from Detroit who have given us the opportunity to help them out with deals and in other markets, but Detroit has really been a springboard for us. So I just want to say we appreciate you guys, and just looking forward to doing more positive things in the future.

Trevor:
Definitely. Thanks. Thanks to you guys.

David:
All right. This is David Greene for Rob, my pupil with the coif, Abasolo, signing out.

Coming soon…

Glenn Kelman, Redfin CEO, joins ‘Power Lunch’ to discuss if buyers and sellers will get on the same page soon and offer insight into home purchase agreement cancellations.