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Itunes – www.TonyJavier.com/itunes
Guest Bio: Austin Rutherford
Leverage yourself with other people’s money and without doing full rehabs.
Austin Rutherford and I talk about how to do more with less.
Listen to the full episode at www.TonyJavier.com/itunes and please leave a review.
If you want to watch the video, go to www.TonyJavier.com/podcast.
More about him – https://tonyjavier.com/austinrutherford
Welcome to today’s show. We have Mr. Austin Rutherford out of Columbus, Ohio on our call here. He is a flipper wholesaler does rentals. He specializes in raising private money. He’s raised millions and millions of dollars in private money loves to travel to 25 vacations last year. My kind of guy. So good to have you on the line, Austin. What’s going on in Columbus, Ohio?
I appreciate you having me on man. I’m looking forward to this. It’s a cold gloomy day right now.
Yeah, well, that’s the Midwest man. This time of year, I, I left the Midwest five years ago, as I said a little bit earlier today, but it sounds like you’re wanting to move South into some warmer weather looking at Florida, huh?
For sure. I saw this, you know, quick. So you know, Kelly work for us, so you know, East coast where we’re headed down Florida. Probably.
Yeah, that’s cool, man. I like I said, I did that five years ago, moved to San Diego and run my business for Millie from Wichita. And I, I wouldn’t change a thing, man. I I’ve got a great team out there. It actually allows me to focus on the business, being away from it as opposed to being in like the, every everyday detail. So I think you’ll enjoy that if you’re a visionary.
Absolutely. I’m looking forward to it. What’s what’s been your, the biggest lesson over the five years.
Oh man. You’re interviewing me now. So sweet man. I love it. I love it. I love turning the tables. So biggest lesson over the last five years you know, like I said, I think once I moved, it took me about six months to realize that I wasn’t the best at everything, even though I kinda thought I was and that I could let go. So like for the first six months, like every month I wanted to come back, I wanted to look at properties. I want to check on the team. And then as I started taking more time away from Wichita and spending more time in San Diego or all my team, pretty much all my time in San Diego I realized that I could let go and my team could thrive. And when you have a good team and you, you give them ownership and you let them thrive,uyou know, they’ll do great things. And if you leave and you realize that things are starting to decline, that’s when you know, you maybe don’t have the right team. So you may have to spend more time going back and adjusting. But, think if you’ve got a really good team there, which it sounds like you do that, yu should be able to transition to another state, especially a warm state, um hout much of a problem.
No, I love that. I appreciate that let him go. You know, I, for one have definitely struggled with that and the best
Totally man, it took me over 10 years to really start letting go after 20 years now. And, and like I said, five years ago, I left and it was really hard letting go of the everyday activity. But like I said, as I got more and more out of the business, I realized that I thought I was, and that’s, that’s a thing that entrepreneurs think that they do the best at everything because they care the most and they feel like they know the business the most, but truth is man. You can find every single thing in your business, find someone else that can do it better than you. And that’s when you have a true business, because then you don’t have to take care of all the monotonous details. You can just look at the business from afar and, and make the big key decisions that you need to.
Absolutely. Absolutely. I love it.
Yeah. So cool, man. So let’s, let’s get back to you, man. This is all about you. So appreciate the, appreciate the question and flipping it around. But so you’re doing about 80 deals a year, which is impressive. Like I say, on a lot of shows, as, you know, a lot of people have trouble finding one deal, their first deal, let alone, you know, doing a high volume of deals like you’re doing. So tell us a little bit about,uhow you started kind of how you built the team you have and, and how you,have had success over the years, mcaling up your team.
Absolutely. so I got started about six years ago. You know, met a mentor who taught me how to flip houses. It was a very long road to that first deal. It was a 16 month process to make my first profit in the business but after that first deal,uwe flipped it was $170,000 rehab, so massive project for the first deal, they made $103,000 net profit on that. And then,you know, just literally reinvested all that money back into the business, kind of grew it every year since then. So it was like one deal the first year, you know, seven, the second year, 17, the third year,uhired an assistant finally then about the third year,uwe were doing these full gut a hundred, $150,000 rehabs,uhire the assistant and then hired a project manager, fired them. And then over the last, I guess, year and a half or so, we got out of the monster, you know, huge rehabs,uand got more into the, to, we call them old tales, you know, 20 or $40,000 rehabs, you know, we can get in and out of those and two to four weeks. Uso we’re only flipping, you know, whole properties and now we’re starting to keep it a lot of rentals as well. So I have started to grow my portfolio, more, hou know, today. So right now we wholesale, we do wholesales and then we buy rental properties. I used to do new construction as well, but
That’s cool, man. So we’ve talked about wholesaling before, so those who haven’t haven’t heard that term before. It’s not wholesaling where you sell the property as is, it’s not quite retail where you rehab the property and make it like pristine at somewhere in between almost more towards wholesale, usually where you cleaned it up and kind of make it can make it livable or at least do some minor things that bring some big returns the, on the price at the end. So I love those. I’ve been doing a lot of those, a lot of those lately with the market, the way that it is, it’s really hot as we speak. So, mou know, once you put a house on the market, if it’s in decent shape, decent price for the shape, it’s in, man, it goes quick. So, that’s smart and that’s return on time too, right? I mean, you know, those big rehabs I’m sure were taking probably what, 60 to 120 days, I imagine,
Six months ago, construction, and then still selling it. We’re going to scratch like six to nine months at a time. It was a, that’s why I’m losing hair.
Yeah, yeah. Right. You had full hair when you started this business. Right. So then so then you, you probably, you know, wholesaling is what a month to two months, right?
Yeah, In an hour month to month.
Yeah. Well, good stuff. So your profits probably go down a little bit, but return on time, goes up and you can do a higher volume of deals and it’s less risky because if the market tanks or, you know, something happens, which hopefully it doesn’t you’re more covered there. So I think you said before a call, one of the things that you specialize in is raising money. It’s my opinion that if you find a good enough deal, you should be able to raise the money. Like there’s enough, capital enough people out there. So tell us about your experience in raising money and tips. You’d give,uour listeners that are looking to raise their first,ufirst round of money.
For sure. Absolutely. I’m with you. You know, if the deal is good, the money will be there. The trick is at what rate does that money come in at? So, you know, you can get anybody to fund a deal on 50% equity. You know, there’s a lot of investors that love doing that because they make a lot of money, you know, for not that much work. So the trick is, you know, getting them down to, you know, 10%, 8% and 6%, no points, a hundred percent financing. So that, that’s kind of the niche that I fell into. Just, just talking to people and being able to raise money. So the first deal I ever did, like I mentioned, it was the 74,000 out of purchase and $170,000 rehab budget, a massive project. I was 21 years old at the time. No real estate, no construction, no business background. And I raised, you know, a quarter million dollars from a private money lender at 12% in two points to fund 100% of the deal. A lot of people say one, you can’t get funded on your first deal. And two, you can’t get funded as a 21 year old, no experience. So there’s plenty of money out there. You know, it just comes down to you and talking to other people to be able to present opportunities and give people a lens. So the, the advice that I always give that the big thing for me that changed the game as far as raising money, when I realized that, you know, giving people an opportunity to invest with me, was that an opportunity, not, you know, an ask or not a favor, or they weren’t, you know, looking out for me, nothing like that. I was genuinely giving somebody an opportunity of a lifetime to change their life by investing with me, because most of the people that lend to me, no idea what private money lending is and their, most of their money is in the stock market. You know, earning 3, 4, 5, 6, 7%, whatever it is. But like, as we saw stocks can disappear like that. So me not giving them an opportunity to two or three times their investment with the collateralized asset, you know, as a disservice to them. So when I changed my mindset on that, having the conversations about raising private money, you know, became a whole lot easier because you’re more confident at the end of the day.
Yeah, totally. I agree with that. In fact, it was interesting because I talked to one of my private lenders. Gosh, it was about a year ago and we were having a conversation about something and he brought up the number that I he’s like. Yeah. He’s like something about, you know, you’ve paid me 300 and some thousand dollars over the years and I’m like, are you kidding me? Really? So I looked at the numbers and I’m like, Holy crap, I’ve paid this guy over $300,000 within a six, seven year period on his money. And it’s like, you’re right. Once you have that confidence in doing deals and you look at it as an opportunity, it makes it easier because you have that confidence. It’s not like, Hey man, I need money. Help me. It’s like, no, man, I can make you X amount of dollars on your money. Come invest it with me. I’ll protect it. And I’ll back it by real estate. So that’s good stuff, man.
Speaker 3 (10:33):
For sure. I look at it like, you know, you look at a 70 year old, old lady that has, you know, $300,000 in her IRA and that’s what she’s living on for the rest of her life. You know, if that happened in March and you were that lady, like you’re in a world of pain, and you just lost a hundred thousand dollars of your investment. So I look at everybody like that. Like, I don’t want that to be my mom. I don’t want that to be my grandma. I don’t want that to be my sister. So like, you have to understand that you’re giving people an opportunity to invest. I mean, think about paying somebody 300 grand in interest, you know, that’s literally life-changing
Yeah. Big time. And he’s just a blue collar worker. He’s not a guy that has millions of dollars. I mean, he had a decent amount of money that he was investing, but you know, it’s one of those things where if you take them from 1 to 3% learning on their money, if they’re doing well in the stock market, maybe on average 7 to 10%, but that’s an average, there’s some, sometimes when the market crashes and they you know, they have those moments where they’re like, man, I wish I was in something else. So if you can, if you can take their, let’s call it 3% money, I would guess is probably the average. Most people earn 2 or 8, 10, 12% return, whatever the investors paying. I mean, that is life-changing especially if they’re, you know, under 50, let’s say, and they’ve got 20, 30, 40 years still invest. I mean, the compound interest of that money coming in is pretty substantial. Absolutely. A hundred percent. Yeah. So what are some, are there any obstacles you’ve had or any big learning lessons you’ve had from raising money?
Yeah, so the, the, the coolest thing is like, everybody always asks, like, where do you find private money lenders that like, can I Google them? Like, no, you can’t Google them. That’s why they’re private. Funniest things people hit me up like, yo, can you connect me with some of your private money lenders? Like, go get your home. Yeah. The lesson that I learned is like how to kind of start that so what I do is I purposely go out to eat. I go to country clubs. I go to play golf. I go to car shows. So I put myself around people with money. You know, you’re not going to find people with money in the hood, on the street. You know what I mean? So you got to put yourself in scenarios where there’s money around you. And then the next thing you got to lose, you got to create conversation. So I used to do like a really like shy to myself person. I’ve changed over the years. So now I just start conversation like, Hey man, nice car, nice shoes. Did you see that game last night? And you’re out, looks like a delicious dinner. What’d you get whatever it is just great. The conversation and conversation always leads to, well, what do you do? You know, they’ll either ask me what I do or I’ll ask them what they do. And then if I asked them, they asked me in return. So it always comes back to me. And my answer is always one of two things. It’s always, you know, I’m a real estate investor and I use other people’s money to fund my deals or, you know, I teach other people how to invest their money into real estate. So I don’t just say, you know, I’m in real estate, I flip houses like that. Someone’s like, Oh, cool. And then turns around and moves on with their day. And you’re their sponsor. You’re going to get on. Well, you know, I’m a real estate or I teach other people how to invest their money, real estate, anybody who’s ever had interest in real estate, it’s gonna be like, what, what do you mean? How do you do that? And now your foot in the door to be able to have that conversation, to present the right opportunity to those people. So the big trick for me, like I talk about money to everyone. Some people don’t like talking about money. I talk about it all day everyday. So the biggest thing for me is just been able to start those conversations and create those relationships with people.
Yeah. Some of the two, the biggest investors that I’ve ever done or found our conversations just randomly happened. One is at a gym. So it was a, it was a pretty, I want to say high level gym is that one of the nicest gyms in Wichita and just struck up the conversation. He was probably, I’m guessing 65, seven years old. You could tell he probably done well, I don’t know. You can just kind of tell sometimes it’s, you know, they have that aura and I, and he’s like, Oh man, I lend money on real estate. And I’m like, and within like, I want to say six or nine months, he had like a million dollars invested with me, but then another guy putting yourself with people with money. I, we went on an expensive hike and Switzerland and a couple was there and we spent, I think, five or six days together and just told him what I did. And kind of like you said I, mentioned something about how we, you know, use other investor’s money to do our deals and things like that, and his ears perk up and then he’s actually not too far from you in Cleveland. And yeah, he’s invested millions of dollars with us, just from one conversation, become a really good friend. So you just never know where the money is going to be and you never know who’s going to have money. Right. I mean, you could, you could be sitting next to someone that you know, as in gym clothes and, and doesn’t look like they have a dollar to their name, struck up a conversation, all of a sudden you know, they’re a Walmart error or something like that.
Yeah. Just the money’s everywhere. You gotta, you gotta talk about it. You know, if you don’t have to talk about it, you’re never going to have any.
Yup. For sure. So you started with two points and I think you said 12% on your first deal. I’m guessing that money, that the cost of money has gone down for you. So what do you, what do you typically propose to your to your private investors and how do you structure that?
For sure. So we always ask them like where their money’s at and what type of returns they’re getting and what type of returns do they want to get? I used to just lead like 12, 14%, and then most people like, think that’s a scan, cause it’s like too good to be true. And you’re shooting yourself in the foot because if they’d be happy with eight and 14, like you don’t have to do that. So I always ask them the questions, but I’m happy to pay 8 to 10% flat, no points. I’ll pay 12%, you know, once it starts going to 14 or 16%, like it starts to get a little expensive. I don’t like paying points at all. And then we get a hundred percent of the deal funded, a hundred percent purchase, a hundred percent of rehab. And we also get a hundred percent funded on the purchase. So when we buy it, if it’s a $30,000 rehab, we’re getting $30,000 in our bank on the purchase to fund the rehab. So those are like the terms that I’m happy with and we don’t pay a monthly payments. We pay it all at the end of the loan. We let it accrue until we sell it. So those times like you know, that’s how we do it. And I’m more than happy to pay those types of times.
Yeah. That’s a good point. You know, I used to do that to just throw out an interest rate, but when you ask them like, Hey, what are you earning now? They say 1% then be like, okay, well, what would you be happy with? Like if you could just, you know, have a killer investment, what would it be? And they may say, you know, what, if I get 5% on my money, I’d be happy being, Oh, you got yourself a 5% lender and then as far as the interest payments are concerned. So I agree with you. I think that that is a good way to do it, to have interest at the end of the loan because it helps with cashflow. It’s less bookkeeping, that kind of thing. But what I do is I like to set my investors up on monthly payments because what happens is if they’ve got a bunch of other money sitting, once they get about, I swear, once they get about two checks, that’s I swear, that’s the magic number. The first one that’s like, okay, this is real. The second one. It’s like, okay, maybe I need to start looking at another deal, but definitely by the third check, if the project goes that long, it’s like, they’re hitting you up for another deal. I promise you if they’ve got extra money, it happens. So I think, I think there’s pros and cons to both, but I like doing monthly payments just because it gets them that taste and then they start investing more money with, you know,
I could see that for sure. I mean, it’s real at that point, you know, there’s mailbox money.
Yeah. Yeah. So, cool. Well, thanks for sharing the the private money. Anything else you want to share about private money before we move on to wholesaling and some other topics that I think would be good to get into?
I mean, the, one of the big things that gets my lint, so I always got pushback from Linda’s. All lenders are going to be worried about getting their money back because it’s something new to them. So they’re always going to ask a million questions, you know, why this, how that, how do I know you’re going to pay me back? What happens if you die? You know, all those things so something that I’ve put in place has helped me a lot and this may not work for everybody but I just put like a, a high ticket, you know, term, life insurance policy in place. So, you know, I’m young, so it doesn’t cost me much money at all. You know, if I can have, you know, multiple millions of dollars of life insurance, you know, if anything were to happen and if any lenders ask me these questions, I just say, Hey, I have blank of life insurance. You know, if anything does happen, like you’re good, you know, everybody’s getting paid off. So that’s been something that’s kind of helped me over the hurdle. You know, with talking and trying to get people to invest with me.
Yeah, now, I like that. Any, anything you can do to make your, your lenders feel more safe, the more likely they’re to lend and easier it’s going to be right. Because they’re going to trust you more. And it’s just so talk about so I guess we’ll continue on the lending conversation because I’ve got some more questions. So and some more knowledge to share. So like, you know, when, like I lend money now too. So I, I have a gap funding program. If someone needs down payment money, I provide that down payment money. Cause that’s a huge need right now. And I don’t think there’s anybody really out there to fulfill that need. And so what I tell my investors that are dealing with me, I’m like, if you throw me a bunch of garbage, I’m not going to look at it. Like you throw like something that’s like, like I’ve had people, like, I’ve say send me the, the information and they’ll give me like three numbers. And I’m like, okay, you know, give me something better. Give me a little spreadsheet, give me pictures, give me something. And they don’t, they don’t even tell me what they’re requesting. Right. So I guess just a piece of advice for me as a lender is like, gotta have your stuff together. Like get a deal analyzer together to where if someone asks you for that, you’ve got it. I had a formatted email that I send out. That’s really simple. It’s like here’s what I’m selling it for. Or here’s what I’m buying it for. Here’s what I’m rehabbing it for. Here’s what I’m selling it for. Here are the terms that I’m offering. And there’s a couple other things that I put in there. And then if they ask for more information, I’ll give it to them if they want pictures and things like that. But honestly, after I do my first deal with them and I pay them off, like the next deal is so easy. I send them an email. I get the money wired within a couple of days. They don’t check on me. They don’t ask for pictures. It’s like, it’s super simple. So I guess what I’m trying to say is like, have your stuff together and the more you have your stuff together in the beginning, it’s like the easier it is for them to say yes. And you know, it’s just I don’t know. It, it just boggles my mind. The, the, the information I get from people that I’m like, if you can’t get me the information upfront that is that I can’t understand it at all. And I’ve been in the business 20 years and done a thousand deals. Like you’re not going to be able to manage a rehab. Like there’s no way.
So yeah. They’ll send you an email. Like I need 130 grand. Yeah. Okay. Like for what
Can you give me 130 grand? Oh yeah. Where are you? What are the right instructions, man? I’ll send it right to you, buddy. You know, it’s like, give me, give me some more. Give me some more. So well, cool man. So what else, like, so you, in 6 years, you’ve done a lot, man, like doing 80 deals a year after six years. That’s pretty impressive. So tell us what you think has gotten you from, you know, the first deal you raise your money quickly, which, like you said, like a lot of people are like, where do I find the money it’s hard and you know, it sounds, sounds like you found it pretty easily. So then it, you know, from where you were in your first deal to where you are now, like what are some big things that got you to scale that quickly?
Absolutely. the biggest thing I think is just leverage on a lot of different levels leveraging other people’s money and leveraging other people’s time so money is obviously, you know, buying and rehabbing. You gotta use other people’s money to be able to scale and the other thing is other people’s times, and again, this is multifaceted. So, you know, contractors, I see a lot, like I used to be the one like the GC, so I’d be the one running materials the guys would be working, but I’d be dropping off light fixtures and faucets and insulation and whatever they needed. So that’s what I did, like on everyday and it was cool. We made money, but I wasn’t able to operate a business. Like I was the one running literally all day, every day. So then, you know, I finally got smart and got out of the big rehabs and did the smaller rehabs hire general contractors to do it. And so hire, leveraging contractors the right way and leveraging a team. So now I have a team in the office, you know, we got an ops person, we got sales guys, we got this bug guys, we got project managers. So being able to have a team run the company you know, that, that’s what at the end of the day, lets you scale. You know, because each person has a cat. You know, your cat may be a million. My cat may be 200 grand, whatever it is, each individual has a cap to their income. And the only way that they can surpass that is by leveraging systems or people. And that’s the only way you get, you make more money at the end of the day. So that’s been, my biggest takeaway is finally like opening up and being okay with hiring and paying people and knowing that the investment in them is to double my investment. If they’re not making money, they shouldn’t be working for you. So it took me a long time to get past that fear of hiring people. Ubut now everything I do, I’m like, all right, who can I hire?
Yeah, yeah, for sure. You know, I, I had this conversation with someone the other day, they had a struggle with, they’re like, I’m doing Facebook ads, I’m doing this and I’m doing that. And this guy has been in the business a long, like if I said his name, you probably know it because he’s teaches in the industry and all that kind of stuff. And I’m like, you just need to start playing hot potato. Like if something comes on your lap, figure out how to get it into someone else’s hands. Like that’s, that’s how I, I’m not saying that’s a hundred percent right. For everybody, but that’s the way I like to run my business because if I just start taking all the potatoes that come to me and like, I mean, they’re just going to stack up. It’s like, I want to find the person that would be best to, to pass that potato to, they can take it to the finish line. And I like what you said, I like that term. I’m going to start using that other people’s time. Like people say other people’s money, OPM. I like Oakland. I like that. I like that term. That’s cool. So it sounds like you built out your team pretty quickly. Like how did you learn how to build that team out? Did you, was it trial and error? Did you hire someone to help you build it out? Did you learn from somebody else? I guess tell us, tell us how you,uevolved your team and were able to, to build that so quickly
I mean, some of it’s trial and error, you know, we have a team of 5 now and we probably 9 nine people. Uso part of it is trial and error for sure. Uanother part of it, you know, I have a friend that has a hiring system,uthat, you know, helped me with the hiring process, mnd not, you know, spending 50 hours trying to hire one person. Umo getting good candidates through the door faster. Umnd then, you know, I’ve always had mentors, mou know, in different aspects of the business. Umome, you know, specifically real estate marketing stuff, business, mo, you know, learning from them as well, how to structure and pay team members, mas been big as well. You know, if you hire an acquisitions person, like what, what do you actually like pay him? You know what I mean? Umo yeah, I’ve learned from that for sure.
Oh man. Yeah. It’s, it’s one thing that in the business, so I’ve been in business 20 years now. It took me at least 10 years to figure out that I, don’t need to be figuring everything out. You know, I thought that I needed to figure it out. I’m the leader. I need to figure it out, but man, just leveraging other people. I mean, just like you said, other people’s time, it’s not just employees and, you know, utilizing their time to get stuff done, but it’s also utilizing the experience of other people,uto be able to make those key decisions. That’s why I love coaching and masterminds. And one of the reasons I do this podcast too, it’s it’s to get our listeners that information, but I soak it up too, man. Like it doesn’t matter if someone has done only 10 deals or they’ve done thousands of deals. There’s still something I know that I can learn, learn from other so good stuff, man. So what else would you like to share with us? What are some other keys to success?
I mean as far as really, they, you know, like I said, we’ve kind of switched to start the business model like a year, year and a half ago from a hundred percent, you know, full gut rehabs. Now like people said that run a wholesaling operation but like a wholesaling is just lead gen for myself. Honestly, you know, we actually wholesale true wholesale, you know, very little properties. You know, we’re buying and flipping these decent amount of them and then we’re buying rental properties for a decent amount of them as well. So just being a little, like again, tapping into private money helps us a lot, but being able to maximize, you know, each deal that comes through the pipeline and have multiple exit strategies, you know, scaling a strictly wholesale business to multiple, multiple several figures. It was very difficult to do, you know, you can take the wholesale business to, you know, a hundred grand, 200 grand a month for sure. But, you know, scaling it to a million a month is very difficult. You know, in my opinion, you need to have, you know, the big chunks from the rehabs. You gotta have the cashflow from the wholesales and you gotta have the long-term wealth from the rental properties. So just being, you know, realizing that, chasing that fast dollar you know, it was great because you make money, but you know, keeping in mind your future in the generational wealth portion of it as well. So I always say like real estate is great, but take that money and invest it either into rentals or other cash loan businesses. So all your money’s not based on just, you know, finding that next deep. Yeah.
Yeah. That’s why I got into lending too. I wanted, I love multiple streams of income. I’ve got quite a few, but adding that lending piece to it definitely more consistent and, and gets me good returns and I love helping other real estate investors do deals that they normally wouldn’t have been able to do. So,uyeah, so wholesaling. So let’s dive into that. So what does your typical wholesale deal look like? So for us, I’ll just give you mine to start off with, so, you know, it’s interesting because when we wholesale a deal, you can tell me if you have the same, same thing, but we make as much, if not more money wholesaling, a property as we do as a doing a full rehab. It’s, the weirdest thing I think part of it is it’s a hot market, so that, that has something to do with it. And so, you know, I would say our average, wholesale, we’re doing one right now. That’s probably bigger than most. We’re probably doing a 15 to $20,000 wholesale, but it needs like a new lagoon and stuff like that. So that’s a little anomaly, but I’d say the typical whole deal, the wholesale deals like three grand, right? We go in, we don’t, it’s typically not very livable. Like if someone wanted to live in it, they could, but it’s, things like cleaning all the trash out, giving it a good cleaning to get the smell out of there. Umt might be, mike if the roof is like one of those that you can tell it’s been on there 50 years and it needed replaced 20 years ago, we might replace the roof and spend five grand on that, just to, it gives it a whole new look. So what is your wholesale deal look like? You said 15 to 20 grand. That’s a pretty big wholesale deal, but I’ll let you let you explain
For sure. So I, you gotta understand, like I grew up, you know, doing a , $150,000 rehabs, so I can, I can build a house. Literally. I knew every code and the code book, I knew how far toilets had to be away from walls. Like everyday I’m not proud of it, but it was a lot of work. So like doing a 20, 30, $40,000 rehab to me is like nothing. You know what I mean? So in theory, you’re rehabbing, I just called wholesaling. Ubut like, we’ll do rehabs up to 40 K uyou know, our smallest probably 5 or 10, like you said. Ubut like we do a lot of 20 to $30,000 flips. Ubut we can knock out a 20 to $30,000 rehab in two to three weeks, get it on the market, sell it 30 days later. So body so, or normally less than 60 days. Uso, you know, I guess you can call it rehab and for the most part as compared to the whole time.
So when you do those lighter rehabs, are they, are they usually like in really good condition where everything’s updated or is it more like where you know, maybe keep some things that are outdated and maybe don’t do some of the things you would normally do you know, to a hundred, some thousand dollars rehab.
Yeah. So I, you say, especially in this market is crazy. Like some, like we have a lot of like 60’s and 70’s houses here. So like everything’s functional, you know, they’re just really old cabinets. They’re really old, you know, tiles surrounds in the showers. So like back in the day we would rip all that out and replace them. Now, like we might keep the cabinets or paint the cabinets and, you know, instead of ripping out before, you know, pink tiles surround from back in the day, you know, just putting a glaze coat of white glaze on the bathtub and the shower. So instead of, you know, $2,500 spend like $300 and it kind of gives the same end goal. So definitely what we’re keeping more things intact rather than like gutting everything out like we used to do.
Cool. So what is that done for you? Has that I’m guessing that’s, you know, you’re less project management, less capital investment,uanything else I’m missing turnover, less time on the market. I mean, there’s so many different benefits. Anything else that you can think of that has, has helped you since you scaled down your rehabs quite a bit,
First of all the real reason I did it in the first place was just risk. So we were flipping a lot of those big rehabs. The market was beginning to get saturated. So that was the main point is just getting out of those 6 to 9 month deals because a lot of things can happen in 6 to 9 months. So that was one, but since then, you know, it’s, it’s a lot easier to manage, you know, putting people in place to manage a $20,000 rehab is a lot easier than $150,000 rehab and the biggest thing for me is like mind space, you know, mat sitting up at night, like, okay, who do I gotta call the electrician, the plumber. I got to get the framework back on this job. I gotta call installation first thing in the morning, like that, that takes a lot of time away from your day. So having freedom of mind to go out and create other businesses and create other streams of income,uthat’s probably been the biggest benefit for me. I’m not stressing about, you know, $10 million in construction going on every single day.
Yeah, for sure. So what is next? So you said other streams of income, so you’ve got wholesale a little bit wholesale on wholesaling. You’ve got your retail properties, you’ve got rentals that you’re starting to buy. Anything else you’re wanting to add to the mix?
Yeah, so we have, we have those you know, I started like a brand education side. I started a data company. I started investing a lot of my money into I guess some Amazon stores into stocks in the Forex. You know, like I was hundred percent resistant. I was all in on like flipping houses. And honestly like beginning of the year when my COVID happened, it, it was, it made me wake up. And I took a lot of money that I had in there and started, you know, diversifying into other businesses, other investments. I started lending a lot more money like, like yourself. So, you know, just creating as many, many streams of income as, as possible. Because like my mentor always tells me like what got you to where you are, isn’t going to get you to where you want to go. So my real estate has been great for me and I’ve made a lot of money doing it. But like again, you can’t scale a $50 million wholesale business. So take that money and create those other more passive streams of income to get you to your end goal. And it gets you to the life that you want. So for me, you know, my big push right now is like building the brand. So you know, doing Instagram, you know, doing podcasts or social media, doing events, like all that stuff is kind of my main focus and then the other investments on the side, you know, obviously help with the income as well.
Cool. What your main source of marketing? How do you find most of your deals?
On the real estate side? We do biggest ones, direct mail and cold call. So everyone says direct mail is dead. We’re still pulling deals from it. The, the rate, the response rate has gone down drastically. But it, it works though. And then cold calling you know, has been huge that that’s the consistent one. You know, we get leads every single day from cold calls.
That’s cool, man. There’s not a lot of people that do cold calling the ones that do usually get out of it pretty quickly. What is the, what is the secret to the success of that? Do you think it’s just consistency and sticking with it until you start finding deals.
For sure. So we hire like virtual assistants to do the actual cold calling and then we just follow up on the warm leads, but most people like to start cold calling and they wouldn’t be able to like today, like you got to understand, we’re reaching out to people, direct mail, people are reaching out to us. So like there’s a lot more motivation with direct mail side and you can have a one called close, but on cold calling, usually it’s like a 3 to 6 month follow up. So you got to build your pipeline out. And like you said, a lot of people quit, you know, in between times. So just staying consistent with it and understanding that deals come down the line and not necessarily just
Cool man. Well, good stuff. So we’re going to wrap up here, any last words that you want to give our listeners that are either wanting to get into real estate or even those that are already pretty successful that want to scale up their businesses
For sure. So, two things when people getting into real estate just do it. I mean, everyone always talks about us taking a leap of faith. You know, you’re never going to be where you want to be without actually working on it and failure is going to be part of a process. And then, you know, something I learned back in the day that kind of stuck with me is one of my mentors always told me, you know, there’s always somebody out there, you know, trying to take your spot. So if you are in real estate and you are making some money being a little bit successful, you know, if you’re comfortable, there’s probably somebody trying to get you. And that doesn’t mean, you know, having to work 24/7, 365, there’s different types of work, you know, sending out messages and connecting with people on your cell phone is work. So like I said, it doesn’t mean go out and swing the hammer, but you know, just stay on your toes and don’t get comfortable because I’ve been there, you know, I’ve got comfortable. So it’s not, it’s not a fun.
Yeah, for sure, man. Well, congrats on your success only been in it 6 years and doing the volume you’re doing and doing the things you’re doing is pretty, pretty amazing. Those kinds of people on my podcast here and look forward to continuing a relationship and let me know if I can do anything for you. And we’ll drop a link below for anybody who wants to get ahold of Austin and check him out and get in touch. So appreciate it, buddy. Have a good one and we’ll talk to you soon.
Absolutely. Really appreciate you having me on. Thanks man.