How To Avoid A Bad Turnkey Provider | Real Estate Investing | Turnkey | REIal Talk Podcast | EP. 15

Hey, everybody. Flip and Danny here, co founders of the Freedom Real Estate Group family of companies.

Thank you, Flipper. And we are here for our podcast, Real Talk, which is Real talk for real estate investors. I'm wearing a jacket today for those watching on YouTube. It seems to be our most popular avenue for people to watch. And I feel bad. I was like, I'm wearing a jacket. I'm feeling weird.

Yeah, well, we got our. We're repping our bulldogs. That's right.

Anyways, today's episode, we're going to be talking about how to avoid bad turnkey provider liars. This was actually a topic that was recommended at the very beginning when we started doing the podcast. And they said, you know, what are the things that you've seen since you've been in business? And we've been doing turnkey real estate since 2015 when we moved here in Ohio. And that's. So that's six years now. And we have seen quite a bit, not only learning lessons that we had as we grew, but also having conversations with other people that bought from other turnkey providers or hearing news stories about other turnkey providers or lots and lots of breaking news. Right?

Yeah.

So this was. It's been a really big learning experience. And so somebody had said, you know, at the very beginning, hey, would you talk about this? Because we'd love to hear all those stories. What you guys would say would be the top, you know, list. So we. We have a list of seven. So that's what we're going to talk about today.

Awesome.

Okay, are we ready to get started?

Let's roll.

Okay. All right. The number one reason that we have listed here is are you the real seller and do you own the property? And so the reason that this is important is because there's a lot of people out there that white label properties. What white label means is that you pretend it's your own. So when we talked about breaking news. Yeah, that's because if you've been in the turnkey game for a while and you know the space and you know who out there is selling in this space, then you know, there was one of these white label providers who was selling the property as this, as if it was their product to their clients, and it was a big, big, big, big mess. Because the problem of doing that is that you're not involved in the purchase of the property. You're not involved in the renovations of the property, you're not involved in the management of the property. So when things go wrong, you. You're suddenly accountable for somebody else's actions. And that's what ended up happening.

Right.

As you know, we actually did work with this particular investor, and we did a really, really good job for him. There was no complaints on our properties.

Right.

However, the other vendors that he worked with, it was like, okay, you needed to have vetted them and kept checking on them and making sure they're actually doing what. What they say they're doing, because you're putting your name on the line for those. So it was a big, big, big, big thing. I think there's still lawsuits going on with, you know.

Yeah. I haven't. I haven't heard about it in a. Or so, but I mean, they've. They've left the company. They've left the country.

Yes.

I mean, and this. The. The person was a. Like a major news anchor for one of the major networks. Well, I mean, he wasn't doing that lately, but he was. And. Yeah, then they. They said that they. They left the country. And I can't remember. They're over, like in Spain or something. I can't remember which. Which what exact country. But it was crazy. I mean. I mean, I like, you can't even imagine this. I mean, there were stories about people were buying properties, and then they decided to go and visit their property, and when they got there, there was no house there.

Yep, exactly. Right. Yeah.

And they're just like, what? Where's my house?

And in my opinion, this person who white labeled it, I don't even think. I don't blame him. I actually don't think he's a bad guy. Right, but you're still responsible, especially if you pretended, not pretended. You white labeled a product and acted as if it was yours.

Yep.

Now, that person that you sold to was relying on you not knowing to rely on the other person. And, you know, it was just a.

Gosh, there was another company. It wasn't that same company, but there was another one. And it was a property, I think, in Georgia. For some reason that stuck sticks out in my head, the person bought the property. And then six months later, because they said that they were still working on the property, and six months later, they decided to go visit the property. And it was this property, which is overgrown weeds and boards in the windows. And nothing had been done on the property.

Yeah. And it's just full freight, right?

Yeah.

For the purchase rehab, they were supposed to have a perfectly remodeled intended cash flow.

It just. It makes me sick to my stomach just thinking that.

Yes.

Yeah.

Anyway, so there's that one. So there's people who private label. Right. They actually don't own the property. They're just acting as if they do and they're selling it to you. They're obviously making their margin. So you just paid more for a property than you would have otherwise because they got to make their money for what they're doing.

Yep.

So there's a reverse way of doing this, and that is companies who educate on turnkey.

Right.

Or have a network of people who would like turnkey and they act as a middleman and essentially are making a fee for sending a buyer your way. So they're not the direct seller. They're just saying, hey, I work with Freedom Real Estate Group and they provide X. And they could have vetted us. They could have not vetted us. So that's one of the things. It's like, know who you're working with. So if you're working with somebody who is referring business, which is there's a lot of great people that we work with that refer us business, and they are great themselves. They're turnkey providers that don't have enough inventory. And they're amazing. And I look up to them and they send us business. They're people that are on podcasts and very, very highly ethical and they send us business. And their fees are not on top of it. Like, there's not extra. Right. We are actually having a relationship with them now. Our fee to them is included in the price. We would have charged the same anyway. We're just giving some to them because they're great people and we want to be working with them. But there are people who are going to tag their fee on top. So you, as the person buying the property, are paying more than you should have, because we would have sold it for, say, $80,000, and now it's being sold for $85,000. So we don't work with those types of vendors. But those are things that you want to look out for, is figuring out, does the person that you're purchasing from actually own the property and are they handling everything? I think that's just key number one. Find that out first and know that you're working direct with seller. So that's number one.

It's just crazy, the stories you hear too. And it's anyway, that topic.

We could just spend the whole podcast story and if you have another story, go for it.

No, no, no, no, no, no. Those are good enough, I think. I think we've put the fear in everybody's eyes now.

So, okay, so number two is how Long have you been in business? This is going to be, I'm going to let Flip talk about this. I will say that the key to this is every, every time you do anything new, you learn, right. You make mistakes. So if somebody's been doing this and this is their very first year and we have clients that work with us in our first year, we made mistakes.

We did.

We fixed them.

We did.

And we continue to make mistakes. Now we have such a streamlined process that, that's what kind of what I want you to talk about here is, is knowing that you're working with somebody that's got the experience and, or has the ethics to fix what goes wrong. You know, you're relying on somebody that is kind of new to the space, right?

Yeah, it's. It's doing your, your due diligence. And a lot of the other, other topics that we're going to talk about here are going to help you if you've not done anything in turnkey or if you have still to do this, due diligence. Because there's, there's people that are trying to. Well, I mean, there's companies out there that, that when they first started, you know, the famous line, you don't know what you don't know.

Yeah.

You know, and there was a lot that we did not know. You know, we knew the basics and we're like, we're doing this and we found out a lot of things that we didn't know. But like you said, we fixed, you know, and so it's. But finding out how long they've been in business because the longer in the turnkey game, it's not just, it's not easy real estate. You know, people think it's, you know. Well, for the buyer, it's easy real estate because you're just buying a house and it's supposed to be taken care of for you and you're supposed to be making cash flow on the owner side of things. The owner of the turnkey business. It's not easy real estate. This is very, it is very difficult because you're dealing with the purchase of the property, but that's nothing. It's everything that happens after you've bought the property, the renovations, the property management, just everything else. And there's so many moving parts that it's like you always used to say spinning plates. You know, there's 10 different plates and you're spinning them and you're just constantly going back to spinning the plates. And it's, it is definitely. It opened up our eyes And I mean, I love it. I still love it. Hands down, it's my favorite of all the real estate strategies. And I'm so glad that we went into it. But yeah, it's, it's. It's definitely something to find out is how long have you been in business? How weathered is your company?

Yes, absolutely. Couldn't agree more. Okay, so the next one is number three, do you own rental property in the areas you offer turnkey properties? So there was a little spin on this. So a lot of people say work with people who are doing what they're selling. Right. Who you take ownership of. I am providing this opportunity for you because I do it myself and I love it. Not. I'm providing this opportunity for you because I learned it's a great way to make money. And I don't do it myself. So I don't even believe in it.

Right.

Whatever that case may be. So I actually took the spin out of it in, in the particular area. So we have been investors for a long time. We've got properties across the United States. But do we have properties in Ohio?

Right.

That would be an important, like, variation of that topic. We moved to Ohio to do turnkey. Do you own properties in Ohio? Are you actually investing in Ohio or you just have these properties everywhere else? So I put that spin on it just to, you know, really kind of dig into who they are. And it. I wouldn't say necessarily that that is truly, truly important. But at the same time, why are they in that market? And, you know, if they are depending on the class of property that they're selling or offering up to investors, are they investing in those same classes? So, like, we don't buy a class, we don't buy D class. And I think we might get into this, but I'm jumping in here just in case we don't. And it's because A class doesn't have the cash flow we want, D class or in war zones or, you know, areas in which we don't want to invest, we don't want to deal with that type of tenant. And so we're focused on BNC cash flow. It's also what we offer and specialize in for other investors. So really knowing and understanding the people that you're working with and if they're doing the same thing that you're doing. And I'm going to go into a little bit also why that's more important on step number seven. Because they suddenly are experiencing the things you are experiencing.

Right, Right.

So if somebody gets on the phone with you and I and says, blah, blah, blah, blah. We get it. We have rental properties, too, in this area, so we totally get it. We relate. I think that's super, super important to be working with, you know, people like that.

Yeah. It's funny because it always reminds me of the. The commercial years ago, the Gillette commercials, the razor commercials. The guy that owns the Patriots. I'm not a Patriots fan, and I can't think of the guy's name, how about Them Cowboys? But it's on the tip of my tongue. But anyway, the commercial used to be, I'm not only the owner, I'm a customer or I'm a client, you know. You know, so he's. So it's the same thing, you know, it's a. You want to. You want to. You know, do they believe in their own area? Do they believe in their own system? And. Yeah, I love it. I love it.

And all the areas that we're going to eventually get into, assuming, you know, we say we always build these, you know, visions, right, of, you know, one year, three year, five years, 10 years, that where we're going to go. We think that we're going to enter in all these markets, and the markets that we chose are markets we actually want to invest in ourselves, especially on this journey of multifamily. We're already looking at them, so why wouldn't we offer opportunities like that? Right. If we're going to do it, we believe in it enough to do the same for others.

All right, so number four is, what are your property standards? This is very important. Being the director of acquisitions, I used to. I don't anymore, but I used to, when I got a property, I'd go walk it, you know, and I'd go check it out. And I can't tell you how many times somebody said, oh, this one is rent ready. You can buy this one, put tenants in it tomorrow. And I'm just like, oh, okay, so let me go check it out. I was like, oh, my gosh. I know there's no way I would put a tenant in this property tomorrow. You know, just. Just the level of. Of it's not rent ready. But there's. That's what a lot of people do. They'll. They'll throw carpet and paint and done, you know, and if that. And it's. And the carpets, the, you know, the cheapest carpet possible, and the paint just painting over cracks and everything else anyway, they're not fixing anything, and they're painting over the light bulbs and they're painting over the. Oh, my gosh, don't even get me started on paint.

Smells that they should have cleaned up.

Yeah, yeah, exactly. And so it's finding out what their property standards are. This is something very important for us. We always, from the start, we said we wanted to build the McDonald's of turnkey real estate. And so our property standards are across the board. It's. Everything stays the same. If one thing is adjusted, then we make sure that we have to tell someone who's going to buy that property, hey, we made an adjustment on this one. So this is going to be different because typically we do LVT in a property, but if we get a property that the hardwood flooring is perfect, we'll finish the hardwood flooring. But then we let them know, because we want people when they buy one property, they know that when they go to buy another property, it's the same property. It's just a different shape, different form, whatever, but it's still the same flooring. It's the same light fixtures, it's the same kitchen. So we try to keep everything the same so that way people know what they're getting every time, but it's where those standards are. We actually had a property. I'll just wrap it up with this one. We actually had a property that we bought it for turnkey property. And so the crew went in there and did it. We call it our signature series. And they rehabbed it to the, you know, to the top for the signature series. And we realized that by the time we got done, it's not like the renovation took a long time. It was actually the purchase price. It took a long time. But by the time the renovation was done, we looked at the comps and we're like, wow, we can actually sell this one on the retail market. We didn't have to do a thing to it. It was already better than the comps in the area. And that was our rental signature. That was our rental standards. Was better than retail properties in that neighborhood. So we sold it retail, and we sold it above our asking price. Go figure.

Yeah.

So I don't know if you want to touch on anything in that one.

No, no. Yeah, I. I think that's fantastic. I will say that the LVP that we put in, it's. So it's become a pro. Process of. When we started, we created property standards, right? We wanted to have some type of McDonald's approach that everybody could come in and know what to expect when they got a property. Real estate group, right. And so we. But we continually improved on those property standards. We'd have like a client come into town, we walk the property, he's like, why do you do this? Why do you do this? And asking great questions like, well, here's why we did it. Do you have a better idea? Do you have feedback?

Right.

You know, guinea. As a landlord for years now, I prefer to have, you know, the LVP everywhere.

Right.

Strong, it's durable. I don't. The carpet, I'm going to end up having to, you know, replace it on a tenant turn eventually. Whereas LVP is strong and durable should, you know, stand up to the test of time. Certainly longer than parking. And turnover is a major cost for landlords. So we listened to feedback and we started updating our property standards every time. So, like, if you look at property that we did at the very beginning, compared to what we do now, it's much different. Not like a ton ton. But there's no carpet in our property. There's now AC on nearly all of our properties where we didn't offer it at first because here in Ohio, one of the things when people said, I don't know what, I don't know what should I be asking?

Right.

And I always said, well, here in Ohio you should be asking what's different about Ohio? Because we've lived in Florida, Texas and Arizona. And what was new to me when we came here was that most properties didn't have ac. Yeah. And then also that when you rented a property, it didn't have appliances. I was like, what? You know, that was weird. So as I'm talking to out of state investors, like, here's what shocked me when I got here. So I'm sure it shocks you. So we didn't, you know, we still don't supply appliances because it's, you know, that's a nightmare for landlords to have to, you know, cover, replace everything else. So it is an Ohio standard that you bring them in anyway unless it's four units or greater. So we left that alone because that helps our owners and it's common for residents anyway. Acs. It is common not to have ac, but we decided that it was a benefit to the residents to have ac. We're going to rent it faster, probably rent it for more money. And so all these factors kind of came into play as we're learning little lessons and talking to people and residents and about what's important to get to where we are today. And probably LVP across the board. It was our most important improvement to Everybody that I talked to.

And it's funny because, I mean, born. Born in Ohio, raised in Michigan, I didn't have AC in my house at all ever.

Right, right.

You know, until. Until I moved to Florida. But, yeah, so it's. It's funny that you've. You've never lived in a house that's not had ac. That cracks me up.

Very hot states, I've said.

All right, number five, okay.

Do you offer warranties on your property? So this is important, and it ties in a little bit to number six. But this is important because of the trust. Right. Are you doing a good renovation? Do you put your money where your mouth is?

Yes, that's exactly what I was going to say. Yep.

So we do. We. We have actually two different warranty packages for this specific reason of telling people, hey, and number six, I'll go into this a little bit more, but actually, you will go into this a little more, but, yes, we stand behind our renovation, and we're going to offer you a standard package, and we have an extended package if you want the extended package. The extended package even covers, like, promised rents and some instances. So we offer both to give our clients the opportunity to choose what they are most comfortable with, because everybody has a different level of, you know, I'm really comfortable with this, or I'm fine with this. And so we offer both. And it literally is because we have such great relationships with our contractors that many times over the next three items, we're going to talk about this, about the contractors we work with. I always say the two hardest businesses that we're in is renovation and property management, largely because of contractors. Contractors are the toughest people to freaking work with and find reliability, find good quality, and find people that actually show up, which turns into speed, actually getting the project done. So renovation, obviously, is. That's a core part of that model. But property management, they have to rely on it for maintenance, returns for everything. And we struggled in that area. But as we built up the renovation side. Renovation, I'm not. You're going to talk about it some.

And I'm going to talk about it again.

Renovation is now helping. You know, that other company.

Yep.

Which I'll really hit on number seven. But do they offer warranties? Do they stand behind the work that is being done, and what type of warranties are they? And that's kind of. It's kind of a simple bullet point, but very, very, very important, too. All right, next one.

Okay. Yeah. You know that when you try to remember somebody's name or Try to remember something and you can't think of it, and then all of a sudden it pops back in your head. Robert Kraft. Done. Thank you. The owner of Gillette. And it was a Norelco commercial.

Rewind to the last story.

Well, we really rewound there. Sorry. Anyway, cut that off my. Okay, moving on. Do you control and manage the renovations?

Number six?

Yes, this is number six. This is, this is important because, you know, when we first went into this, we didn't really have much knowledge of renovations. You know, I really don't. I mean, I still don't. I mean, I. I know some. I know enough to get me in trouble, but there's a lot that I don't know. A lot that I don't know. And. But there's, you know, it's just making sure that, you know, because we don't know. Well, we hired somebody to come in that does know, you know, and they run it and they handle everything so that everything is being taken care of and so there's no corners being cut. You know, it's. We're doing everything exactly how it's supposed to be done from the beginning. So that way we know that there's not gonna be a problem in the future. Cause that's what we don't want. We want people that are so happy with their properties and their properties are doing great that we don't want them to going, ah, that was shoddy. Work on that. You know, we don't want that. You know, and it's. This is one of the reasons why we like going into turnkey. I've said it before, is because of repeat clients. I love building up that, that client base that these people, they bought one and they're so happy, they are buying another one or two. And, and they're telling their friends that they bought one or two. And then their friends are coming over for the. Our referral program, which is very important to know about our referral program. But, you know, so it's very important that they are running it and that they are controlling it and like the Bulldog renovation. And so it's an important factor because also, for example, I always love talking about the one client from Israel. You know, we're taking care of such great care of him that he wrote to Tiffany, who was our transaction coordinator, she's handling things for him, just because she knew it would be easier for her to just keep helping him. And he's like, I feel like I'm five minutes away. That's what you want. You know, whether they're in Israel or whether they're 10, 10 minutes down the road, you want them to feel so taken care of that they don't even need to worry about it. They don't need to drive by their. Their property. They don't need to send somebody else to drive by their property. They're. They're taken care of from the start.

Yes. Yeah. And so I'll add a couple things, and I don't know if I'm gonna remember them all. I should be, like, writing them down.

I'm sorry.

One is that you pointed out the project manager. We've always had a project manager. Why? Because we're not the expert in the renovation world. And if you're going to attempt to do something that you don't know how to do yourself, you can't teach it, you can't check it, you can't find the BS meter. When people are telling you a story about you, you have no idea. So you have to align yourself with somebody else. What I now call a who that comes in and manages that part. So we've always had a project manager who was able to create a scope of work, walk contractors through the scope of work, answer any questions that came up during the renovation, things like that. Because we never wanted. Also we wanted that person to be paid by us, Right? Contractors, of course, are paid by us, but they have no loyalty to us. They could do one rehab and then scram, Right? Totally screw us and then scram, which has happened even with a project manager. But at least we had a project manager that their sole job was to protect us and our company and to watch out for contractors. We were going to steal a lie, cheat, whatever it was that they were going to do. We still had hiccups, but the amount of hiccups that we would have had had we not put somebody in that place, in that seat would have been catastrophic. So doing that really helped us. And then also building that relationship with contractors. I don't know if we have any contractors from, like, day one, but I would say probably within a year, we started getting some of these better contractors, right? The quality. And why we started getting some of those contractors because contracting world is small, just like the investor world. A lot of us know each other, and the word on the street was bulldog renovation space. Every week on time, you're not gonna be waiting around for a check. They're not gonna screw you. So we start getting people coming to us, hey, you know, I'd like to, you know, get a job with your company. And so we start testing out new contractors again. Went through a bunch of bad weeds who say, ooh, bulldog renovation space. Let's go. Screw them. So we still had to weep. And so we would learn to give small projects, you know, test them out before giving something large because we made the mistake giving them something large. And then, you know, mistakes happen. And every single bulldog renovation process was built out of all the mistakes that we had. But we built the foundation of why we're so successful now in one of the hardest parts of real estate, which is managing contractors. We are now freaking superheroes at it. And it's partly because of the very, like, our second who in our company that I always talk about that he came in and he's now leading the charge, right? Not only a contractor, he's a licensed inspector. Like, he knows the whole entire game. He's a phenomenal leader. He knows exactly how to lay everything out, how to work with the contractors, how to set expectations. Like, he's just blown us up. So we learn, learn, learn, learn, learn, learn, learn. Develop. Like this thing where, like, we seem to have all the. The pieces, but we really needed that who to come in and take all those people's pieces and go, I got you, and then just, you know, hit the ground running. So that's what's happened. And I don't think we would have gotten here without going through the path.

Oh, absolutely. So, yeah, we needed to learn.

Yes.

And we learned the hard way, which sometimes that's required. And I was just thinking, while you're talking, the. One of the main crews that we have, and I say main crew, he has multiple crews under him, but he's been with us for three years. Two of the other main crews have been with us for two years. And, you know, so. And they all have multiple crews. That's a majority of our crews are under those three guys. But in talking about our project manager, you know, about how he's able to do all this stuff, he has the amazing ability. Because you talked about the BS meter.

He.

Oh, boy, he's got this BS radar, and it goes off, and he is not afraid to call them out. In fact, even the guys that have been with us for the longest time, you know, it doesn't matter how long you've been with us, he'll call them out and know you. That's not right. You need to fix this or, you know, oh, yeah, it's. It's. It's beautiful to watch. It's.

It's shout out to Steve because nobody's allowed to steal?

Yes, yes. In fact, it's a funny story. When we first started going into this, I talked to somebody, another investor here in Ohio, and I said, you know, do you have any good contractors? Because I'd love to, you know, we'd love to give him some work. And he laughed and he said, you know what a good contractor is like a little leprechaun. Once you get one, you just put them in your pocket. You don't let anyone else have them. And that's true. That's why we never mention our contractors on these recordings, because we don't want anyone to know their names.

That's so funny. Yeah. I just recently asked Steve because somebody in one of my masterminds needed help with some terms because they're behind because contractors are tough. And these are investors that have like 300 plus houses, plus they manage some other ones. And like all of us, it's always tough to find those contractors. So, like, I'm willing to help. I think we might have to prove that it's not totally, you know, stretched. And when I asked Steve, he was like, oh, he stretched. Don't you dare be sharing my contractors now. So, yeah, it was. It was really, really funny. But it is one of the hardest parts of the business. And when I said that, Bulldog Renovation started getting their name known in the area because we paid on time.

Right.

Also, once we went through all the bad apples, we started creating a list that we now call personal experiences. List of all these people that have screwed us in some way. And we want to be able to tell other people, don't work with these people. We've lost a lot of money going through this, and thankfully, we could afford, like, we're still alive and running today. But some of the losses that we had would have torn apart any other investor. Yeah. And they'd be out of the business now and probably would never. They'd be just too scared to get back into it because it was nasty. But the good ones, as you found them and you gave them that volume of work and said, I'll have another job for you and another job for you. You'll never have to go to some homeowner and negotiate another deal and write another scope of work. You're gonna have the same property standards when you know we're taking care of you. You can just focus on building your crews and doing more jobs for us so that you can make more money that way. And we're gonna pay you on time every single Friday. And we have this system that's how we got to here where we are right now, then top it off with Steve, our second, who. Who just blew it up. Yeah, yeah. So that was number six is huge. Hardest, hardest part of the business. Contractors, renovation company. And then we're going to tie it into number seven, because property management has to do with them, too. Unless you have any other stories to share.

One last one. One last one. I'll never forget this. And I'm not going to mention his name because like I said, we're not mentioning any of the crew's names. But his first house he did with us was a house that was done. It was built in 1905 or something like that, like, you know, the OTS. And I went out with the project manager and he wanted to introduce me to him. And so he. He introduced me to him. And. And we started walking around the house, and one of the things that this contractor wanted to point out to me was how good the hinges looked on all the doors. And I was like. I was like, oh, my gosh, those hinges are amazing. Did you buy those? And he goes. He goes, nah, I took them home. And I said, okay. He goes, yep. And I boiled them. My wife is still mad at me for that. And I'm like, you boiled them? He goes, I boiled them. I got those things spot clean. I brought them back out here, put them on the doors. And I'm like. I looked at the project manager and said, oh, he's a keeper.

Yes, yes. And he still works with us today. He's growing his crews and. Yeah, yeah. Love finding good people like that. That's what business and life is all about.

Yep.

Okay, so let's dive into our last point that we really felt was worthy of this podcast.

This could have also been a whole podcast.

Oh, yeah, it could have been. So we're going to talk about number seven on how to avoid bad turnkey providers is do you have property management in house? And we learned this the hard way. If you've listened to some of our podcasts and how. How our companies got created, property management was. We had always intended to build property management. We just didn't intend to do it as fast as we did.

Yep.

And it's because we went through five other property managers that were horrible.

Five, five, five.

Yeah. And the property mismanagement, financial mismanagement. That just nonsense that went on. We were losing customers because they. Our turnkey product is sold, and then their relationship is truly with that property management company.

Yeah.

And we were losing them because property management companies weren't Doing a good job for them.

Yep.

So we ended up, let's, we're going to build our own. We're just, we're bringing in all of our clients and we're going to make it happen. And you know what, when you do that, you're going to screw up and we're human and that happens. But we're going to fix it and we have the control to fix it as opposed to those other five. We couldn't jump in our fifth one actually we had a relationship where we said if you're going to be our property manager, you have to allow us to jump in because we need to help these people. If they're, if you're too busy, we will go help. These are our clients and we want them to trust us and buy more properties. We want this long term relationship. We're in business for hundreds of years because we're going to keep on growing and it's be to going, going to keep on going. But we're not in business for two years. So don't screw up this relationship.

Right.

It still didn't work at one point. The, the relationship went bad and they're like, nope, you can't help anymore. It's like you seriously, you're telling me we can't go help somebody when we're not charging? We're just helping one of your clients actually. So it was a mess. We just went ahead and brought it all in house. So now having that control for somebody who's buying turnkey properties, you really want that turnkey provider to have the control to be able to go. We're now in a 15,000 square foot office and we've got the turnkey a company in here, we've got the renovation company in here, we've got the property management company, the brokerage, the acquisitions, everybody is here. So guess what if there's a problem, problem like you just mentioned for the Israel investor, Tiffany's taking care of it because we're all right here and she can quickly ask a question, not send a client to somebody else. I'll take care of it. You can go knock on the door. Hey, Mr. Chris Sonino, who is our senior property manager, can you help me with this? Right here's a problem. Any of us can jump in and help because we're all under one roof, one family of companies. So we have the control to be able to serve our customers. And then now you also have the care. Right? Because we do care. We've shown that we've cared. We cared so much. We Built a business before we were ready for it. And so, and that care is not only for the owners, but we're property, you know, owners ourselves. We have our own, you know, portfolio. We understand how important it is that you treat the residents and we use the word residents on purpose, not tenants. They're residents because we want them to feel like, hey, this is your home, we care about you. We're going to do things that other property management companies don't. Why? Because that serves our owners. Because we're spending more money to do special things for the resident care program that isn't coming out of owner's pockets. Coming out of our pocket because we want to show them, hey, we want you here. Not for one year, five years. If you'll last for five years, that would be fantastic. Because it's, you know, constant rent, you know, lease renewals, no vacancies, no, you know, missed payments, no, just no turnover costs. That's a big one. Right? Vacancy and turnover costs are the biggies. And so we're trying to do our best job for the residents so that they're happy because serving our owners best. So the care that, that extends to the clients is the other reason why you wanted to have it in house? Because we want our clients to keep coming back. We want them to buy 10 from us, to work from us, as many as they possibly can because they trust us in every aspect of the business from the actual property renovation to the company that's going to manage it long term and take care of it. Another bullet point I put under number seven is if you're using a third party management company and we've experienced this, there's a lot of finger pointing because where do they make their money? Yeah, we don't care if property management companies is flat for us. Trust doesn't make profit because they are there to serve our clients. Right. And to allow us to have that control and that care and that piece that allows us to build a long term relationship and keep this business running for a long term. The other company is in it for lease up fees, maintenance fees, turnover costs. Right. Because that's how they're making their money. They're not, they're not making it on the sale of the property and they do need to make a profit. You know, they've got to pay their bills and do everything. So that's. And so it's very easy for them to go, oh, Freedom Real Estate Group, they're just, you know, they suck that their rehab company, they're horrible. They did all this Stuff on why? Because, oh, we're going to fix it and we're going to charge you to fix it. And now we look bad for no reason. And they're making money off of a client that didn't need some of that stuff done. Because what do we do? We, we have the renovation company in house. What do we do? We send the contractor that did the work right back out. If there ever is a problem, guess what? You work with us and you work this long time. You want another house, go fix the problem.

Go fix what you did wrong. Yeah.

What just happened. And that happens less and less because we've always held them to it. Right. And we have those relationships. And also because we have the renovation company. So we're not. We're not, again, we're trying to run flat. We don't care about profit. And this has been true for us since inception of coming here and doing stuff. Profit wasn't the goal. It was. We want to be in the turnkey space because we love the wealth that we built by real estate and we want to do it for us. And we're going to help do others the same because we're here full time. Right. There's a whole bunch of people that don't get to do this full time. So we're going to help them. And so with all of that, we never cared about profit. There was times where the companies weren't profitable. The profitable company was loaning the other company money just to get started because we needed it to serve our clients. And then we started another one. We had to keep on doing the same. Right. But we weren't worried about that. We were worried about what, what does this look like in 10 years? Are we successful? Are we serving our clients? Are we serving our residents? Did we build everything that we wanted to build despite lack of profit? Whereas other companies that don't have this big vision and this, all this vertical integration of other companies, they don't have that site. Right?

Right.

They're in it for today and they're in it for the money. So. So that's where the renovation company comes in, is because we actually had our CFO have a rehab that he needed to do. He had our Bulldog Renovation company go get it. We had another contractor go bid it. The difference in price was like. He was like, okay, Bulldog Renovations is not charging enough for their rehabs. Like, and so we're not. We don't have those hiked up margins.

Right.

Again, Bulldog Renovations is also serving our other, you know, clients. We are starting to do external stuff for our, for other investors. They're starting to do external stuff for our property management company. Right. Because our property management company is struggling. Just like every company struggles with contractors and vendors and they get behind on turns and bulldogs is like, hey, we're up and running enough. We think we can help the property management company. Guess what? Now the property management company is getting cheaper bids from a reliable source that did the renovation in the first place, or even if it's an external client, knows the type of properties that we want to do, knows the rental standards that we love and provide a good, you know, turn at fast quality and at the best price. They're saving money and it's all in house. So we just, you know, we're not going to have getting done.

Right.

So that's the benefit of being in house and then the owner. So us, we're the client of the company.

So we're not only the owners, we're a client. Yeah. Thank you, Robert Kraft.

So that, that is where we kind of alluded to it earlier, that this is really super important because we not only own properties and we own properties in this area, we're also a client of the property management company. We're not self managing. We rely on the same company you guys all rely on to manage your property. And whenever something goes wrong for us, we're like, hey, don't like this? Can we change this and how it looks? Because I bet our owners are experiencing the same thing that we just did. So let's, let's change how this looks. Let's do this better so we get this super cool insight into what we want to see as an owner so that we can again change it so that every one of the owners. So I just, I think that's like the coolest thing. Talk about being invested in the entire process from A to Z. And I think that's, you know, what ultimately makes companies like all of these, you know, just continue to strive to be the best they can be.

Yeah, it's, yeah. And my wrap up, I gotta look this up though, because I always screw it up and I don't want to screw it up. And the handy thing of having a computer right here, it's when you talked about the, you know, how we are, we want to do this for other people. It's, you know, it wasn't what we weren't driven by. We want to make the most money.

Right.

You know, it was, we want to, you know, because we knew the power of cash flow and we wanted other people to be able to have that as well, because that's what turnkey's for. It's for the busy professional.

Yeah.

You know, that doesn't have time to learn about real estate and doesn't have time to swing a hammer. But they want to own real estate, and they want to have cash flow, and so this gives them that. This is their vehicle. But it's one of your favorite quotes from Zig Ziglar, and he said, you can get everything in life you want if you will just help enough other people get what they want. And we always, as a team, watched Darren Hardy in the morning, and he talked about givers and takers this morning, and we've always been givers. And that's been one of my favorite quotes. One of your favorite quotes. But I can never get it right. So that's why I had to look it up. But that's just what I want to wrap it up with. It's always been very important to us.

Yeah. And it's not that we don't want to make money. It's just that that wasn't the first priority.

Right, right.

Like, we're in real estate to make money.

Well, yeah.

And we built these businesses not just because we wanted to sacrifice ourselves on flames and all the pain it took to get us. Get us here, but we wanted to help others do the same. And ultimately, knowing it was going to make a whole lot of money for our team, for the leaders in the company, for us to be able to give back to more people. Like, there's money. It's just not number one.

Yeah.

Right. So. And I. I think we live and die by that zigzag quote.

Yes. Yes, we do. I'll still never get it right. Maybe just get a tattoo right here.

I don't get it right either. I don't have that elephant brain.

Yeah. Yeah.

It comes in and it goes right back out. And I'm like, what just happened?

And I just read it. I couldn't even tell you what it was now, anyway.

All right. Anything else you want to say?

No, I think this is. This is the longest we've ever talked about bad turnkey provide. So I think. I think I'm good.

All right, well, we hope this helps, you know, give some insight into what you want to be looking into if you're working with a turnkey provider. And that's all we wanted to do today, is give you some stories and knowledge of the experience that we've had going through the pain so that you don't have to go through the pain.

That's right.

So thank you for joining us for our Real Talk podcast, which is real talk for real estate investors. And we always like to end with invest smart, live happy. Bye, buddy. Bye.

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