Real Estate Investing Mistakes To Avoid Before Quitting Your Job

Hey everybody, this is Toby with Global Integrity Finance. Today we're here with Adonis and My360 REI. I think it's My RE 360, I'm sorry. But we're here, going to talk with Adonis. Want to talk about what he has done in this industry, where he started, where he's evolved at today, and where he's going. He's got an amazing program. It's all about education. We feel that this is a huge, huge part that's missing with our clientele. And so we brought Adonis in here. We're going to talk about him, where he started, how he's evolving, and where he's taking this to the next level. So welcome, Adonis, to the show.

Thank you.

And so let's just start with that. Tell us who you are, what you do, where you started, and where you're going.

Sure. So, um, my name is Adonis Lockett. I am the director of operations and the founder of Lockett at Homes, the, uh, real estate investment firm. I'm also the Director of Operations for MyRA360, pretty much a tech startup that's automating real estate investing to a simple push-button concept.

Gotcha.

So my background is electrical mechanical engineering.

Really?

That is correct.

I did not know that.

So I actually moved to Texas working as a rocket propulsion test engineer with Lockheed Martin down in Grand Prairie. Serious? Correct. Really? So that was back in 2009. Pretty impressive. So I moved down in 2009. Um, I worked maybe for about a year and a half and then I quit engineering in 2011 to focus on real estate full-time.

Okay. So what prompted you to get into real estate? We'd just gone through the big crash. Why would you want to dump into something that just tanked?

You know what's funny is the infomercial during the big crash. Hey, I'm a plumber with no education. I make millions in real estate. And I remember, and it got me. I was like, hey man, if that guy can be successful in real estate, so can I. So the plan was just to be an engineer, you know, make— do real estate on the side, have money to fuel one or two real estate projects and just kind of ride it out and just see where the wind took me. The irony about that was that when I did my first deal, I bought a house at the end of 2010, 62 days later I sold it and I made more in that one transaction than I net in a year as an engineer. So, um, from there, I remember vividly, I was looking at a check, you know. So one thing about what I did, I loved what I did as an engineer. I hated my job.

Right, right.

You know, I'm the classic tale of someone that likes what they do, but the people around you are more important.

The environment wasn't right.

It wasn't right. And so I remember I was holding the check and, um, my cubicle has my back facing my— the opening to my cubicle, my Supervisor walks by, he's standing, I can see his reflection in my monitor, he stands there for like 30 seconds and says, "If you spent as much time working as you did daydreaming, you may get something done." Walk off. So, this is about 11 o'clock in the morning, so I got up, packed my stuff up, and I just took off. Didn't tell anyone.

Just walked out.

Came in the next day and put in my notice. Gotcha. Right. And you know, because I figured if I could make my net annual income in a few months part-time, then imagine what I could do full-time. And as cool as that story sounds, it was the worst decision I've ever made.

Okay, let's peel that back a little bit.

So why is that?

Because I just heard you make a bunch of money in 62 days, man, I'm walking out the door and I'm going to go flip houses.

I'm going to go flip houses.

Yeah. As everybody sees it on HGTV.

That's exactly how it goes.

Boom, boom, boom. If my daughters can do it, by golly, I know I can do it.

—until the camera turns off. The problem was I convinced myself, me being as smart as I was, that I could just jump into this and then just nail it. If I work hard enough, if I just out-hustle and out-grind everybody, then of course the deals will come in, I'm going to make the money. The problem is I didn't properly prepare financially for that long haul of no income. The in-between. I didn't properly expect that the difficulties were cyclic. Okay. So I took my first experience was—

when you thought that was the norm, that's the norm. I can do this every 3 or 4 months.

I'm charismatic, I'm a salesman, I'm smart, man. I'm going to knock this out 2 or 3 months and I'll be good to go. The problem was, was that— not to say that deal was one of a one-off, but I hadn't been through enough to understand that that deal was not typical. Very unique. Right. Very unique. So I ended up spending the first several months exhausting all of my credit cards, savings accounts. I hustled, I marketed, I ended up liquidating my 401(k). And 6 months in, I'm now just securing my second or third deal. First one only made me, you know, $5,000 or $6,000. And I've spent, you know, most of my postgraduate career living paycheck every Friday. Right. Now having gone 5 months without a paycheck, and I just saw it spiraling. And the one thing I tell everyone is that, not to say that I regret my decision, I regret not properly planning my exit.

So would, if you had, so getting into the real estate deal, you really didn't have any coaching, mentoring, training. You just kind of found a deal, everything worked out right, and you kind of went in blindly. So then you had to get educated after the fact.

The infomercial that I saw was back in 2008. Okay. I spent a year and a half reading books, you know, following what was happening in the market. So fortunately I didn't jump in riding that wave of I can buy a house at a moment's notice. So I didn't get caught with that wave because I actually saw all the economists were projecting that things are going to get worse when I decided to get in. So I figured, well, why don't— what if I just spent the time to truly get educated So by the time I got into my first deal, anyone that spoke to me felt like they were speaking to a 5-year seasoned professional. Somebody had a clue. Right. So I actually kind of spent more time getting educated versus just jumping in blind. Got you. And I think that's kind of where the false sense of confidence came from. Yeah. I did it right. Look, I didn't just jump in. I read books. I watched webinars and went to seminars and listened to people tell their story. And now when I jumped in, I found this perfect deal. I did it right and I know I can do it again. At least that's what I convinced myself. Agreed. So that was kind of the problem, that false sense of confidence came from spending the year and a half educating myself, taking my time, getting into the deal and feeling like, man, I knew I would get this. And that arrogance set me back probably 3 or 4 years financially.

Wow. So probably the one thing that was lacking was a real-life mentor. A real life coach to prepare you. Okay, you got your first deal, but now understand you may go 6 months, 9 months, 12 months for your next paycheck. Let's prepare accordingly.

They never tell you that. They never tell you that. When these people are selling their success stories in the front of the room, they're always telling you about the deal they closed, about the $100K subject to, or this phenomenal wholesale, and they never tell you that, man, this phenomenal wholesale deal came 6 months and 600 nos prior.

They don't ever tell you the backstory of what it took. So you close your first deal, you flip it, you make your money. Now you're spending all that money to look for your next deal along with living. This is the only cash you got.

Correct. Because, you know, so spend the money, you know, now mind you, I'm starting out, so I'm buying all fresh marketing material. Paying for my websites. I had to get me, you know, first couple months I worked out of my house. Felt like, man, if I'm doing this full-time, it's not credible putting my home address. So I got me a little $400 office and I'm doing all I get, you know, the internet. And as these things are starting to add up, I'm starting to notice that, man, this big chunk of money is starting to chip away more and more, right? And I still want to have a social life. I still want to go out, have a good time. So now this money that's supposed to ride me 6 months, now I got, I'm down to 3 months, 3 weeks in. I'm down to 2 months, 4 weeks in. And that's when the realization came in that, man, I may have gotten a little bit over my head without planning properly, without educating myself, not on how to find a deal, but how to run a business.

How to run the business. Exactly. That is the key element. You know, like we say, a lot of people get lucky. They find a good project, they flip it, they make some profit, but they don't know how to manage the business from that stage. There's so many more variables to it. So what'd you do next?

So what I started to do was I figured out that flipping houses isn't going to come quick enough. So I started the Easy Qualifier, the EQ program, and essentially what that was, I started a credit repair business to help you get qualified to buy a home. So one thing I learned in my first flip, when I did an open house, 42 attendees, I think 35 of them couldn't afford the house because they had bad credit. So then I— it was like a voilà moment, like, well, what if you pay me $600 to fix your credit, and then once I fix your credit, I sell you my house? Right. So now then I started— well, that's beautiful, because if I get 6 people at $600 or 10 people at $600, that's $6,000. One of them will buy my house, then I can go ahead, I've made $6,000, I've made another $20,000, so the $6,000 will keep me, you know, carry me in between.

And you had an ongoing clientele.

At least that was what the theory was.

That was concept. Right.

Looks great on paper. It was phenomenal on paper. I was like, man, I hit a home run. I'm a genius. So obviously there came the rub in 2011 trying to convince people that I can fix their credit. Amongst all those other dispute letter programs. Right. So that was a very challenging uphill battle that I didn't anticipate. Again, my charisma, my intelligence gave me a false sense of arrogance that I'm just, "Lando," right? So once I actually did get some traction, I realized that when people, when I'm fixing their credit, you know, 10 people registered in my program, only 1 person bought my house. So the other 9 people wanted to go look for other houses. So I would start referring them off to a real estate agent. And all 9 of them bought a house. And I don't know, me, I think on client number 8, number 9, she called me one day and was like, "Hey, you got more clients for me?" And I was like, "Do you have any clients for me?" Where's my return? And it hit me. I'm like, she didn't even give me a gift card, didn't take me to lunch. And I was like, you know what? I got to capture that revenue. So I started the Lock It In Homes Real Estate Brokerage because I figured If I'm going to create the buyer, why not capture the revenue as the brokerage? So then that's how Lock It In Homes, the real estate brokerage, came about. So then once I got my first agent in, now I was able to control the narrative from the credit to the experience with the agent. So now I'm able to create a real model that says, hey, I can control the narrative of your experience from the time I get you in all the way to the time I sell you a house. Perfect. The problem was that now the loan officer, if the loan officer didn't perform, that disrupted this exceptional narrative that I was building. So the more we got into, sometimes the loan officers would perform, sometimes they wouldn't. I wanted to— It was a crapshoot. It was a crapshoot, exactly. So then naturally, you know, and at corporate, one thing corporate America taught me was the concept of vertical integration. So I said, "Well, hell, if I'm giving business away with loan officers, why don't I just start a mortgage brokerage?" So then Lock It In Homes, the mortgage brokerage, was launched. Exactly. So now we are a credit repair, mortgage lending, real estate brokerage company. So now I completely— Turnkey. Right. So now I was able to start double and triple tapping our revenue. We make money on the credit, we make money on the agent commission, and we make money on the loan. Okay. Every client over. So, man, I'm— so I'm riding the wave. So as we started— as I started getting good in finding houses, the more clients we got in, the more clients I got qualified, I needed to produce more houses, right? So now I was able to start scaling my house flipping business. Okay. So now I'm starting to get a little bit of traction. I'm getting a little bit of reputation in the local market about a guy that's doing a fair amount of volume. Now, because I was buying from wholesalers, right? I spent the first 4 or 5 years buying from wholesalers. Then the market started shifting. It started becoming a seller's market. Oh yeah.

So right. So now in what, '15, '16? Right.

So now we're coming into like '14, '15, and now the wholesalers are starting to really take all the meat off the bone.

Taking all the equity out. All the equity.

With no risk. So what I found I needed to do was start cultivating my own leads. So I got rid of the wholesalers. I started, and I was the guy dropping bandit signs in the middle of the night. I was the guy that had flyers in the laundromats. I mean, Any strategy you can think of, of having someone call you to say, "Hey, I want to sell my house," I've done it. And I would spend sleepless nights literally working the business during the day, out in the middle of the night dropping signs as far north as Frisco, as far south as Waxahachie, everything in between Mesquite and White Settlement. So— Big territory. Right. And mind you, it's me and one or two people that I was able to get Kind of like, we're able to have them drink the Kool-Aid with you.

Exactly right.

And so the cool thing that they know, right? And here's the thing. So once I got someone on, I'm like, hey, you got to go out and hammer the signs now. Like, so I wasn't doing the little bandit signs where you push. I was like, you were that spike in the hammer, nailing stuff. So, right. So, so because I got good at finding deals, it got to the point where I financially couldn't handle the number of good deals that were coming in. Okay. So naturally started wholesaling. Money. So then I just out of the blue, I look up and now I have a wholesale division where people are calling me saying, "Hey, you got another wholesale deal?" So boom, now I have another model, I have another avenue to generate revenue in the wholesale model. So same thing. So now I'm like, "Okay, well wait a minute, I can be the agent buying the deal, now I can wholesale the deal, boom, I'm killing the game." So As we started giving out, started doing more and more deals, of course I'm referring my buyers out to a hard money lender that I trust, and then it dawned on me. Why not be one? So it took you a while to realize you don't have to outsource everything, right? And so then boom, it just hit me. Why am I giving the loans to someone else? I need to be a hard money lender. So then, then now I'm really understanding the business, so I'm actually creating departments now. Right. Right? So now I got— so it got to the point where I actually separated the consumer division of Lock It and Homes and then the investment division. Gotcha. So now I'm at the point where the number of deals I'm sold, I can hire an employee, then 2, then 3. So now the investment side of the business, we're wholesaling, we're wholesaling division, we're lending division, we're real estate division. We are a true ecosystem, right? And once I actually started putting that out on social media, colleagues that I went to school with, people that I've met over the years started reaching out, "Hey man, I see that you're doing a whole bunch of different stuff. Can you teach me?" And so my thought was, I was always the one to just take the time. If you want to learn real estate, let's go to lunch and I'll do this with you twice a week. I don't want anything. I don't want money. I just want to see you succeed. Be a mentor. Once I saw how important how, one, how important this information was, but then two, how much people were paying for it, I decided I didn't want to create a paid education. I wanted to create the name of Lock It In Homes. And so this is what I started offering. I will teach you all parts of the business. I will give you all avenues of resources that are available to me if you operate under the Lock It In Homes brand. Gotcha. So I was able to expand from California and Texas. These were my two offices I was going back and forth from. I went from two offices to five offices literally in like three months. Wow. Once I understood that people were willing— once I understood the barter system, right? I teach you and the way you give back to me is to help Locking It Homes. Help brand. Exactly. Yeah. So So once, you know, and the people that I was making this available to, it wasn't anyone that called me. These were people that when I was younger, I watched them go through growth through corporate America. They were, you know, the guys in these multi-level marketing companies that were killing the game. These were people that I knew knew how to hustle. They were hustlers. They were intelligent and they were, and they were, things were very, just came like they were intuitive.

Came natural.

Right. So once we started, once I started interfacing with these people and the moment they said, "Yeah man, I saw you doing real estate. I was interested in it." 3 months later I had an office open. And literally in 18 months I went from 2 offices to 8 offices. Wow. In 18 months. That's outstanding.

Right. So let's move into my RE360. So that's got to be the next move.

It is. So what I've learned and so Once I had these offices open, the focus became flipping and hard money. The other stuff became secondary because it was a couple of dollars here, a couple of dollars there. Flipping houses was big monies and finding it in short periods of time. Hard money was very little output with a lot of income. And one thing I've learned is that I had the entire company nationwide, Lock It In Homes, pushing hard money. And the more people that I met, the more I realized they're just so lacking in the core understanding of how to navigate a real estate deal. Okay. Meaning that they knew how to get a deal but they had no idea how to structure the deal financially, how to manage the expectations from their vendors, their GCs, from cost. And I found myself spending more time teaching people what they should do on structuring the deal, on, "Hey man, your rehab budget will have you upside down on the sale." I would say of 10 clients, I would spend Maybe 4 or 5 of them, I would spend an hour or two on our first call explaining what they should and more importantly what they shouldn't do. And that's when I realized that there was a void in education.

Gotcha, gotcha. So, but wasn't this— kind of goes back to your first deal— it wasn't the hard part, wasn't finding the deal or putting it together, it was running the business. Correct. Right? Correct. So this kind of brings you back to, hey, I experienced it, I'm seeing it, It's not just me, it's nationwide. Correct.

And then that's kind of what spawned the whole, man, like, these people are going to these meetings, but they're learning one subject a week, once a month, once every 2 or 3 weeks. The information isn't coming quick enough for them.

By the time they get to the next one, they forgot what they learned in the last one.

Exactly. So another thing that I realized was that these same borrowers were calling me, asking me, can you refer me to a GC, a title company. These same people were calling asking, "Hey man, do you know— I know you're a hard money lender. Can you refer me over to a wholesaler? I haven't seen a deal." And I just realized that this major void existed in real estate. Real estate is one of the most antiquated industries that exist today, in my opinion. Because you can literally log on to YouTube and in a week learn to code, fix cars, build a house, anything. Except when you Google real estate, the information is so vast, it's so opinion-driven, it's really difficult to nail where to start.

And to feed on that, it's like your first story. It's my success story, but it doesn't give me the meat and potatoes, and it doesn't tell me how many times you failed after that. That's the problem with the information today. It's not real. It's fluff. Right.

So, uh, or it's the fake it till you make it. Agree. And I tell you, that is the worst, worst advice anyone can give anyone in real estate, is the fake it till you make it. Agree. Um, so the thing that I realized was that we're in the industry, I'm 7 years in the business, still flipping houses, and I'm calling around, can you refer me over to a title company agent? And I was like, why do I have to spend— why do I have to work so hard to learn when you can learn everything everywhere else? Why do I have to work so hard to find a vendor to find a deal? And then it dawned on me, like, so I just say, hey, let me see what's out there. And everything is segmented. A little education from here, a little vendor resourcing from there, but nothing that would allow me to log on and get everything I need in one place. And then just like everything else, okay, well, if it doesn't exist, why don't I just build it? Right. Right? So the concept of MyRE360, MyRE stands for My Real Estate 360. My real estate investing world comes full circle.

Right?

Right? So that's what MyRE360 stands for. And essentially, the concept is I can log on to the platform, I can learn every part of the business from local experts.

From videos, from testimonials.

Videos. So I log on to the business, I want to learn how to I click on fix and flip, here meet the local fix and flip expert 10 minutes away from you and I can watch a series of videos about how to flip a house. Then I can go and say, "Okay, well he mentioned I need a hard money lender." Hey, I can click on a video on how to navigate hard money, how to navigate general contractors.

So these are a lot of how-to videos embedded in the site. That is exactly right.

So I can literally log on and learn not only how to do something, but how to do all of the other things that are accompanied with that particular strategy. So here's the biggest thing I see.

Most people don't know what they don't know.

Right.

So in your site, does it say, here's the steps, stages, and the things you need to know, or do they have to guess at what they don't know?

So the cool thing is we make it very kind of one-two. 1, 2, 3-ish, right? So the first thing you want to do is we tell people, figure out a strategy that you relate to based on your experience or your time availability or your cash, whatever. And then once they start with fix and flipping, we'll actually walk them through. Now that you've learned fix and flip, you need to learn how to navigate hard money. You need to learn how to navigate general contract. You need to learn how to navigate title. We walk that out for them. So all they got to do is Click, click, click. Just 1, 2, 3, 4. And by the time they've gotten done, they've learned not only how to flip, but how to navigate the vendors that are associated with it in low-level detail.

That's awesome. That's awesome. So where do you see— so what's missing in MyRE360? What's still not there?

Um, our users. Okay, here's why. So the user— users, real estate You ask anyone in real estate, "How do you know something works?" "Well, because this is what I did previously that proved that it works." So we're changing the way people real estate. And because a lot of people have a process that isn't broken, a lot of them aren't willing to fix it.

So we find that— It worked but it's not perfect. Because it worked, I don't want to change it.

Is that what you're saying? Well, so my strategy is, well, if I flipped 50 houses, why would I change what I'm doing? I'm flipping 50 houses, I'm making a lot of money and I got a pretty good system.

You're successful in your mind.

So why change it? Okay. So we're competing with the, "I have a process that works." Gotcha.

And they don't need to come to your side because everything's working for me. Correct.

Gotcha. So same thing, these newer investors are learning from the people who have these processes that work. So now we're saying, "I know that works, but have you thought about automating?

Have you thought about simplifying?" Instead of paying $20,000, $30,000, $50,000 to go through these coaching classes and have to, like you said, one weekend every other month or every month or a 3-day deal, it's a once-a-month deal. Right. What are you doing in between those times? Right. Here's where you could be filling in the voids and continuing your own education. Exactly. Gotcha. Okay.

Where's our industry headed? So, so from the investor standpoint or from the vendor standpoint?

I would say as far as fix and flipping, we see that the inventory is getting less. Right. The investors are getting more, so there's more people wanting less availability. Right. Eventually that's going to dry up. Right. So where do you think we're headed?

So the problem right now is that everyone is an investor. Everybody is an investor. And the problem is not that the inventory is running low. Inventory is being bought by the uninformed and the inexperienced. And you have people buying deals where in a best-case scenario, truly best-case scenario, they will break even. Agreed. And we know if you've ever flipped a house, there's no such thing as a best-case scenario.

You get a new investor who struggle, struggle, struggle looking for a deal. They finally get a deal, but it's not a good deal and they don't care.

They don't care. Or you got the ones that a good deal does come out but they so far overbid on the ad.

That's what I'm saying, they pay too much.

Right, that the deal itself becomes a bad deal and they'll take it because they're deal hungry.

They now have an opportunity. Right. They've read about it, they've listened about it, they've heard success story after success story. Finally they have a deal and now they get to be on that platform, but you're right. They paid too much to make it profitable.

They paid too much, they underestimated the real work, the timeline for the work. All the wholesalers throw out there. Right? But the one thing that they also don't consider is the impacts of carrying costs, utilities, landscaping, closing costs. So on paper, the gross numbers look great. The net numbers, you made $1,500 in 5 months. Yeah, so you pretty much made $300 a month.

Yeah, you could have done that at McDonald's flipping burgers. You really could have. So if you don't think that the inventory is drying up, which I, I think it is because we've had so much out there, and, and I'm not saying it's drying up, I'm saying that it's still a solid seller's market, right? Sellers know there's 10,000 investors wanting their house, so they're bidding it up for the highest price, of course. When is that going to change and what's going to happen to make that change?

I think that between the wholesalers kind of cannibalizing the profits, you still got the GCs that want to get rich on each of the construction. So a normal paint and floor job on a 1,000-square-foot house was running $25,000, which is insane. But if you think of— should be at $3,000. This is a $7,500 turn in the best case. You got GCs coming in, cool, $15,000, $20,000, because now the GCs want to get rich on every deal as well because they know the nature of the market, right? So by the time—

this may be my last deal for a while, so I'm gonna make all I can just in case the market dries up, right?

So now by the time the investor gets to profits, it— this is why their hunger keeps growing, because they get priced out by the wholesaler, by the GCs. So I think that ultimately what's going to happen is it's just going to plateau out. Yeah. Right. I think that at some point the new investors are after their first no, no made money deal. They're going to scale it back. They're out.

Right. What we're seeing is I just spent my life savings. I just like you liquidated my 401(k) and I didn't make any money. Somebody lied to me. Right. I'm out. Right. So we see that a lot and we hate that. And this is why it's so important for companies like yours company like ours who's trying to create a win-win situation in education. Don't go take a deal just because it is a deal. There's 1,000 deals out there, 10 of them are viable. Throw the rest away until the market turns and that seller is not so greedy.

Or employ a different strategy.

Okay, what would that look like?

So a deal that comes in where it's a bad deal because I'm not going to make any money may be an exceptional rental. Agreed. Maybe an exceptional subject too. Yeah, right. And the problem is that a lot of people— again, people are so one-dimensional on the education.

I'm not looking to fix and flip. I don't know about that.

Like, yeah, I can buy it for $60,000, but it's going to cost me $20,000 and it's only worth $90,000. But that same house will rent for $1,500.

Positive cash flow.

There it is, right?

And let it appreciate.

There it is. And every investor who's flipped houses for more than 4 or 5 years, ask them what's the one thing they wish they would have done? Held on to some of them.

Held on to some of them.

You're preaching to the choir. I'm telling you.

I have flipped numerous houses and if I— some of those that we sold just to get out of— off the books, could have kept them, 10 years later be worth free and clear number one, positive cash flow, and double my money.

Here's the thing. Not even 10 years in certain submarkets. In Dallas, for example, bought a house— I bought a house in, in, uh, Southwest Fort Worth for $69,000 in 2015. Uh, in November it appraised for $155,000. Wow. So yeah, I put $15,000 of work into that. Did you rent it? Yeah, it's a rental. It's a rental. It's a rental. Rental. I just refinanced it on this, uh, just last fall.

I've had I've had a dozen more people ask me why don't I— I've been in this industry for 26 years— why don't I have a huge portfolio of rentals? I never wanted to be a landlord. Right. But here was my tunnel vision. I didn't understand owner financing. Right. And so up only up until maybe 2 or 3 years ago did I truly understand the value of owner financing versus— because as a landlord, and I'm telling you, everything, whatever you're about to say, everything breaks at 2 in the morning, right? Water heater, HVAC, HVAC. You know, whatever. It always happens at midnight and/or when you're out of town, right? And then they're pissed, they're mad, they're screaming, they're hollering. Yeah, or you got to go collect, right? So I never wanted to do that, but back in the day, I didn't truly understand owner financing, right? Which is the same thing on a different scale.

It is. What if you could have just got online and learned owner financing? Exactly. From the local guy who only does owner financing, who knows all the pockets of the markets that you should focus on, and you can literally at 2 o'clock in the morning log on to a platform and learn everything that he knows at your discretion.

That's exactly it. And today would be a different world. Right. And you're right. So we see it, you've seen it, people say, "Well, I want to learn about fix and flip." They run into a deal and they don't know that that's still a viable deal because there's other options that they're unfamiliar with. So now they can go to my RE360 and find out, okay, here's the deal now. So, so if I— let me ask you this. I find a deal, I ran the numbers, I'm under contract, but now I run the numbers, I run it through a couple hard money lenders, I've run it through some of the mentors, and I'm going to make $5,000 if everything goes perfect. There's no way for me to do an analysis and it come up with Here's a better option for you.

So prime example, I'm going in thinking I'm going to flip the deal. Right. That's my priority. So I came in and I evaluated all these things. Well, have I evaluated what it looks like as a rental? Let me log on. Let me watch the things I should look for. Let me consider because in our education, our educators will bulletize when you walk into the house, look for this. Run your rent numbers here. Get your walk scores. Get your— your crime rate. So the education tells you to the lowest detail what you should look for. So I could spend an hour, watch the rental education, and then know whether I have a good rental or not. I could spend an hour, watch the subject-to education, and know if I have a good subject-to. So I can literally go through and not just skim through a couple paragraphs. I can literally learn the intricacies of it in the course of 45 minutes to an hour and a half and know if my deal or either one of these strategies That's awesome. That's awesome.

And how long has MyRE360 been out?

So we went live in Dallas about 6 months ago. Okay. We went live in a few other markets about 2 to 3 months ago. So we are truly rolling out market by market. And the reason why we're doing it that way, especially because education is driving what markets we roll out in. Education is the centerpiece of MyRate360, especially for the newer investor. So as part of that, we want to make sure that when someone logs on to MyRate360, we have reputable and credible educators teaching them everything that they need to know.

That's your name. So if I go on there and I give some BS story about how to acquire hard money and blah, blah, blah, and I oversell it, and then your clients go on there, they listen, they read it, and they call you and say, Adonis, this guy's an idiot. This hurts you, doesn't hurt me.

It hurts you. Because their first impression of MyRA360 is you.

Right, right.

So we're only as good as our content. Agreed, agreed.

Um, what else? Is there any more levels of it that you're in the, in the works?

Absolutely. So not only does MyRA360 teach you everything that you need to know about the business. Uh, we also created the first real estate project management app.

What does that mean in English?

Meaning that— meaning that— so if you ask any flipper, what does he use to manage his projects? Okay, what do you use to manage your accounting, your vendor work, your vendor accountability, your vendor workflow, um, you know, your overall process schedule? You'll hear a bunch of different things. Well, I use a little bit of this for accounting, that for project management, Etc.

So they have 3 or 4 different platforms that they—

one project. So MyRack360 is a real estate-specific project management tool, meaning that when you log on, you have a rehab estimator that walk— like, all you have to do is select, yes, does the roof need to be repaired, yes or no. It'll spit out market rates for your roof repair. Does the floor need to be replaced, yes or no. You put the size of the house in and you choose basic, which is like rental grade, average, or high-end. It'll spit out market rates for that particular line item. So when you walk a house, all you have to do is press yes, no, yes, no, yes, no, and it'll tell you what that house costs.

So I can do this on my tablet as I'm walking the house?

Or your tablet, your cell phone, that is correct. So not only that, so it's a built-in rehab estimator. It has a pre-purchase checklist. So a lot of people, once they get into the deal, you know, I've personally been a culprit of forgetting to send earnest in a proper timeframe. Right. So there's a pre-purchase checklist that'll tell you step by step, now that you're in the contract, Schedule your inspections, send your earnest here, send your contracts there. So it tells you step by step what you need to do. Your mid-renovation tool is what we believe is a true game changer. Our mid-rehab tool will pretty much be your, your, your entire project management system in one place. It tells you the technician type, when a particular item, when a particular line item is supposed to start. It tells you how much you have budgeted for it. You identify what percentage is complete, tells you how much you need to pay to your GC. You can take pictures of the before and after work. You can communicate with your GC there. You can actually put whatever stage of the process you want that line item to be, so you truly have visibility to your entire project right from your tablet, from your cell phone, or from your computer.

And you said this was area-specific because cost of material, cost of labor changes from here in California— This is market to market. Yep. Florida, Georgia.

The same way the education does. So, and that's another thing too, that's why we make— we want people to learn from local educators. Because I don't care who you are, you can't fly in from New York City and tell me how to flip a house in Fort Worth. Yeah, can't do it, right? You can tell me the basics about finding— you can give me that top level stuff, but you can't tell me how to flip a $20,000 house coming out of New York City because you don't know.

Cost $20,000 for a dog house, right?

Exactly. Yeah. So the same way we, we centralize the education. We do that for the project management app as well.

That's awesome. Right. All right. Um, tell me some horror stories, um, that whether it was new, you were aggressive, we heard that, that, you know, you did your first deal and you kind of strung out there looking for your next deal, ran out of money. But tell me something that's more in depth that, that you really had everything fine-tuned down, you were going to make a good deal and it blew up on you.

And why? So, um, this is what prompted us to create the, um, the vendor search feature with the user ratings. So I'm 50 houses flipped, finding, you know, my GC decided he wanted to get into politics. So I'm just calling any and everybody, hey, I need a GC. GC comes around and I let him bully me into paying him Top dollar. Not only top dollar, but paying him for work that he's aspiring to do. Oh, paying him in advance, right? So he's like, hey, listen, the job is going to cost $30,000. I need $10,000. I'm like, well, can you do, you know, a little bit of work and then, you know, I could— no, no, no, no, I need $10,000. So I paid him $10,000. Okay. Um, he then comes around and says, hey, listen, it's been 2 weeks. And I need 5 more.

I'm gonna pay my guys.

I'm like, well, you haven't completed the work associated with the first thing. Okay, don't pay me, I leave.

Right now you're at his mercy.

Now what are you going to do? Right, you're going to pay me my 5 because I got to pay my guys, right? I don't think I should, but okay, here's 5. All right, well, I need your job to sit for a month, I got another job. Well, can I get my money back? Absolutely not.

I need to get somebody else in here.

So now what do I do? Now I got to not— now I can't call and talk tough guy because he got $15,000 of my money. Half of the project. And I've gotten about $25,000 worth of work done. Wow.

You got 10% done, 50% paid. Correct.

So now I can't call and be like, hey, come here, please, sir. Yeah, please. And no matter how much of a tough guy you are, how much of anything that you want to be, when someone is holding $15,000 that you didn't have to throw away, You do a lot of pandering and now you are at their mercy. To hang on to it. So the one thing that I— the one thing I've learned is to never let your GC bully you in pay versus progress. Right. That's one thing I personally would encourage everyone. If your GC stands firm, you stand firm as well. Make sure you have your lien waivers and make sure you're paying for the work that's done, not the work they're aspiring to do.

And that's one of the things that we We tell everybody, because we have a lot, hey, you know, my contractor wants a deposit. Right. Too bad. Our mindset is if that contractor doesn't have enough money or enough leverage to start the project, he's gonna be cash poor during the whole project.

And that means he's gonna keep milking you. Yeah, yeah. And milking you.

So, and we only pay draws on work completed. We have two forms of inspection. So, you know, we are protecting people like you, because those are horror stories we've heard so many times. I mean, it is a typical horror story. Got in, the guy, you know, I gave him my scope of work, he bid it. Other horror story to add to that is, you know, we agreed upon $30,000, but it's all said and done, it's $45,000. And he's not going to finish the last $15,000 until I pay it. So, and so it's a nightmare. I think one of the struggles we've had, and we tried this about a year or two ago, was what you're doing on a smaller scale, but was trying to vet out 5, 10, 15 general contractors so that the new people coming in that borrowed money from us, we could line them up with a contractor that would take care of them and ensure that work be done right, on time, at the highest level. That lasted about a year, and either I was going to go to jail or somebody was going to get hurt. Right. Because it was so frustrating because I would say, you know what, like Adonis, I vouched for you. I told this client that you would do good work. I told them you would be communicative. So I vouched for you and you're not doing it. Well, you know, I'm not getting paid enough, but you bid it, but you accepted. Right. So just man up and do it right. We had so many, so it caused us not only to lose faith with the clients because we were giving them bad— they thought we were getting something off of the contractor, so we were buddies. And we could explain that, but it caused this person now to be mad at us. It caused our reputation to be bad. Finding good GCs is one of— it's the second hardest thing a flipper will do. First one is finding a good property, right? Finding the right deal is one of the hardest things they'll do. Second one is once they find it is finding a good GC to meet budget, meet timelines.

And that's why one of the education modules on MyRA360 is "How Not to Get Screwed by Your GC." So we actually have the head of one of the more reputable GC companies in Dallas Metro teaching how not to get screwed by your GC. And he's not teaching how not to get screwed, he's teaching you how to navigate the conversation.

How to manage that side of the business.

—Right. Perfect. So, and that's, and again, that's one thing when you're learning how to fix and flip and you're learning how to get the money and you're learning all these things, you're not learning how to deal with people.

And most of these people have never ran a business. They've worked for corporate America. Somebody's told them what to do and how to do it. Now they're trying to step out into the entrepreneurial world and be self-employed with no guidance or direction.

Right. Often will happen is that they don't know how to handle risk properly. And that's what will cause an investor and a GC to clash heads, to bump heads. Now of course for a GC, he just walks off.

Oh yeah, he got nothing to lose. Nothing to lose at all. He's going to pack his tools, pack his materials, and he's out the door. You're stuck with a project half done. Go find somebody else.

We've seen it many a dozen times. All the time. That's the thing again, education on how to navigate people, right? And one thing I've learned to do was to express in dealing with lenders or general contractors, whoever, express frustrations from a perspective that they can understand. Right. Right? Not talking loud, not threatening. It's like, "Hey, listen. I need you to kind of understand where I'm coming from, so let's find the mutual ground." So the whole thing is me as an investor, my experience is going to be infinitely different. The GC should be the one teaching you how to navigate that, not me as an investor.

Right. I'm relying upon your expertise to help me turn this project over. Exactly right.

And so that's why I think 360 solves a lot more problems than people realize. And again, that's the whole point where we're saying if users were to truly plug in, they would be astonished at how the abundancies of resources that come just to not only just learning how to fix it flip, but how to navigate situations and circumstances. Outstanding, outstanding.

Well, everybody, I want to thank Adonis for coming out here and spending time with us.

Uh, Adonis, what's your website? myre360.com. Yep, www.myre360.com.

And then you can look him up at lockitinhomes.com.

Also find me at Lock It In Homes. You can find us on, uh, so on, uh, Instagram, myre360. We're on Facebook, myre360. Find me on Instagram, Adonis Lockett. Find me on Facebook at @adonislockett. Outstanding.

What's the phone number if somebody wants to call you, Adonis?

The office phone number for My RE360 is 972-456-9980.

Say it slower. I can't write that fast.

972-456-9980. Great.

I want to thank everybody for tuning in and listening to us hear about Adonis, My RE360. Again, this is Toby with Global Integrity Finance. If you have any questions, comments, please put them in there. You can find us at globalintegrityfinance.com or call the office 214-548-5190.

Thank you and have a great day. And they can find you on My Area 360 teaching people.

That is true. We're in there.

So Toby will be on My Area 360 teaching people how to navigate a hard money loan.

Perfect. Outstanding. Thank you so much, buddy.

Appreciate it.