Flipping Success: From Trailers to Multifamily Triumphs with Jason Velie

Are you one of the many busy professionals working in offices day in and day out? Do you wonder how some people grow their wealth fast, retire early and play on work days? Well, you're in luck because Ginny Bolling hosts this show Pivots of Prosperity where she interviews people that can do just that play on work days. Many guests have become financially free. She also interviews people that are on their journey and people that are in support roles like attorneys, contractors, brain brokers and others. Commercial real estate is the common element. She is on a mission to be sure. Busy professionals know they can own substantial commercial properties too, like apartments, self storage facilities and others, and not have to do the work managing them. Passive investing is the key. Syndications are the typical method. Tax write offs are some of the biggest rewards. Ginny and partners find the deals, build a strong team and business plan, then offer the investment opportunities to passive investors. New episodes are released every Tuesday at 12, so watch for new releases. If you want to get involved, let us know. You need to get pre qualified to hear about most deals. See the show notes for contact information.

Hello there. Jenny Bowling here with Pivot to Prosperity. That's brought to you by Pivotal Real Estate Investments. And oh my gosh, I did not confirm how to pronounce your last name. Jason. Jason V. Is it? Vi. All right, Billy. Yes. Okay. And we're coming from different states and in this podcast world we reach out to each other and decide, hey, yeah, should we do a talk? Let's do it. So Jason, thank you for coming on. Why don't you tell people about how you got into doing the flipping and apartment transactional stuff you're doing okay?

Absolutely. Thanks so much for having me. Yeah. So I'm in the Wilmington, North Carolina market and I started about five years ago and I started flipping houses. It was really a slow progression. I flipped one and did pretty well with it and then took eight or nine months to find the second flip and then six months to find a third flip. So the first year and a half were very slow moving. It really was that, you know, hockey stick growth curve or exponential growth curve that you hear about all the time. And so then after about a year and a half to two years, I really started getting some traction. I, I started dialing in my marketing to find good off market deals, lining up my funding, getting good solid relationship with contractors. So I start flipping and it was only probably my fourth or fifth deal that, believe it or not, was a single wide trailer on land that I bought for 15 grand, which, mind you, I didn't even have 15 grand. I borrowed it from somebody else, I bought it. I don't have any idea how the wholesaler got it so cheap. I, I couldn't tell you. So I bought this thing for 15 grand and seven months later I sell it to a cash buyer as is for 98 grand and take that in 1031 into that ninety thousand dollar sales proceeds at 1031 into an eight unit apartment complex that I bought for 450,000. So that 90,000 proceeds was exactly the 20% down that I needed. And so that was my first intro. I got into that little commercial multifamily space fairly quickly on in my investing career. And then I continued flipping houses and I have, you know, since, you know, that was a little over three years ago that I bought that one. Fast forward to today. Purchased another 16 unit complex that I have a 5050 partner on. We got seller financed and then that same partner and I, we bought a 20 unit complex. I'm 65% owner, he's 35. And then I bought another 16 unit by myself. So of those 60 doors by weighted ownership, I own about 45 of those 60. And then just a few months ago I bought a 44 pad RV park close to our area that I'm 80% owner of and my acquisitions manager is 20% over that. So right now my flipping business is doing either 28 or 29 flips at the moment between all of them that are currently listed for sale or pending sale or active rehabs, you know, plus two or three like pending purchase right now. So we're really active in the flipping space. Just earlier this year made my first two hires, acquisitions manager and project manager. Those are the only employees I have. But yeah, it's just, it's been a lot of fun. It's been, it's been an incredible time. I wanted to keep my day job in finance until I had enough passive rental income coming in to cover our living expenses. And so that's exactly what I did for that first three and a half years of investing. I did it on the side while I was working the day job. And then after three and a half years, you know, roughly a year and a half ago at this, at, you know, to today, I had, I reached that financial independence number. So I cut the cord on the day job and haven't looked back. Loved every second.

Terrific. Congratulations. Yeah, yeah, thank you. And, and we're going to back up and cover some things there. You mentioned a lot, but did you say 28 to 29? Flips are going on right now?

Yes, ma'. Am.

Is that probably friendly apartments or is that including the make ready? It's separate.

That's separate. They're all single family flips.

Wow, that's a lot to be doing at this at one time it is.

Three of you? Yeah. We have a lot of contractors that we work with, but there's only three of us that are, you know. Well, there's only two full time employees, you know, plus me. But it's. It's. With the contractors that we work with now, it's. It's ironed out pretty smoothly. We probably have. Of those 28 or 29 flips, there's probably 15 or less that are in the active rehab stage. And for those rehabs, you know, pretty much my process is I do the marketing, put the money into the marketing to get the leads in. The leads go directly to my acquisitions manager, Gavin. He qualifies the lead, sets the appointment, goes to the appointment, gets it under contract, and then passes it off to me. I make sure it gets to the closing table, which I really should hire a TC to start doing that part for me soon, but I just haven't yet. And then once it's closed, I hand it over to my project manager and he takes it away with the contractor and until it's finished. And he just says, hey, we're ready for photos. And then I text the listing agent, she sends the photos, we get it listed, and as of now, I'm still handling any of the due diligence repair requests that we get in or renegotiations from buyers for these flips and stuff. I may outsource that in the near future as well. Not entirely sure.

That goes great with a transaction coordinator anyway. Yeah, that's a natural fit.

Really.

So great. That's awesome. That's impressive in such a short period to have it systemized to do that kind of volume. Congratulations, really.

Thank you.

So as far as the ones that are not under active rehab, so half, almost half of them are active rehab. What's going on with the other half? Are they in marketing right now or what?

Yeah, so a little bit of a mixture. There's a bunch that are listed for sale. Some of those are already pending sale, and we probably have, I would guess, maybe three really recent purchases that we haven't started the rehab on yet because we've got really good crews and several of them. But with this amount of volume that this is. This is the highest volume we've reached before, we don't quite have Enough to just jump on the project as soon as we close on it. We may have to let it sit there for two or three or four weeks before we're able to get started on it, you know, but, you know, we just account for that in our numbers and our holding costs and.

Yeah. You know, so how much are you able to pick up? These are single family houses.

Yes, they're all single family. And almost half of them, believe it or not, are manufactured homes. Single wides and double wides on land. I flip a lot of those because there's so much opportunity. There's so many of them out here that are, you know, 15, 20, 30 years old that need work, and there's so many other investors in this area that don't touch them. They either don't know enough about them or they're afraid of them. They don't understand what it takes to get them to qualify for financing on the back end. So there's a lot less competition for those and they just print money for us hand over foot.

That's. That's good to hear. So when Covid hit, I got into. I was thinking that's not the time to launch my investment company for apartments if people aren't going to pay rent. So I started. I was going to do mobile home parks, and I. I like to learn things from the ground up. So I started flipping mobile homes, but I was doing them in the 55 and older parks and.

Oh, okay.

Because I wanted to be sure that. That they were going to have fixed income. Right. So especially during COVID But it turns out I took my eye off the ball. I probably should have been also buying apartments, too, but anyway, so I've learned a lot about renovating those, but yeah, it's. You can get the same amount of money and have a whole lot less up front.

Yeah. And just to clarify, I don't do any of them if they're in a park or if they have to be moved. I only flip them if they come with the land that they're on.

The parks are getting too expensive anyway. Yeah, I, I'm. I've stopped doing those too, because, as you know, I'm doing the commercial real estate now, so. But, so I also want to back you up to something else. You had the Series 6 and 7 and 66 securities licenses, and you were deep into the financial world and worked for Edward Jones and you had worked for some institutional trust type, a couple different employers there, apparently. And we got talking before I started recording about that and, and you know, it's funny how sometimes we think, okay, that was that job, now I've moved on. And I think that might have been what you were doing. I'm like, hey, back up. Because shoot, you've done a lot of stuff that people would want to know because we'll talk about what you did. You, you did the financial management, all the talk about what we were saying, would you?

Yeah, no, I appreciate you digging that out for sure. So I was a trust officer for I think about six years for a couple different funeral cemetery trust companies. And they used to be, that used to be referred to as the funeral cemetery industry. Now it's referred to as the death care industry. And basically it's a very specific niche in the institutional trust world where we deal with pre need funeral trust funds and cemetery perpetual care trust funds. So pre need funeral is where you go and prepay for a funeral. The different states require that those funeral homeowners put a certain percentage of that contract amount that you paid, which is going to be the majority of that amount that you paid that has to go into a trust that they're allowed to have it through a trustee invested. And then whenever that person that that paid for the contract passes away and the funeral home performs the service, then the funeral home can request those funds plus all of the earnings from the trustee and we would distribute it to them. And the other main type of trust fund that we dealt with was cemetery perpetual care trust funds. And that's the thing, like I mentioned to you earlier, most people never stop and think about, well, what happens? How does a, how does a cemetery make money to be able to be maintained after they've sold all their lots? Well, they can't if they haven't been saving and investing money. And so a long, long time ago, many decades ago, that used to be the case where cemetery would sell all their lots, not have any more income coming in, not be able to afford maintaining it, so they would just go bankrupt. And then the county or city or whatever local municipality is involved would have to step in and start maintaining it forever. And that does create that perpetual tax burden on the taxpayers. So there were laws that were put into place to prevent that. So now and again the amounts are slightly different depending on which state you're in. You, when you buy a lot at a cemetery, that state is going to require that cemetery to put a small percentage, usually only 5% of that purchase contract into this trust fund. And they're never allowed to get that 5% back. They're never allowed to get that Principal amount that they put in, they're only allowed to get the earnings that's generated off of it. So we on the institutional trust side, we did everything from client relations, taking the phone calls from these folks, you know, getting some new business. In transferring assets from one institution over to ours, we would handle and process any new receipts, any new money that came in, we would put them in the trust account, make sure they're invested appropriately. We would handle any distributions. When they would perform a service and request it, we would. We'd make sure they sent us all the proper paperwork that their state required because it's an incredibly highly regulated industry and every state is completely different. So we handled everything from receipts and disbursements to annual reporting to federal audits to state audits. You name it, we did just about all of it.

That's a terrific background too, because, as you know, when we start getting into real estate and we have investor money, they want to know that we know how to take care of investor money. Not only be a good custodian, but all the rest of it too, you know, and preserving that capital is, of course, key to that too, and making it grow. So. And it sounds like you're definitely good on making it grow, But. But that custodial part of it is. Is key. I think that that's, that's really invaluable. So one of the things I also wanted to get back to was your apartments. How are you all sourcing these apartments? It's your marketing materials that's. That are getting the leads.

Yeah. So it varies. The. Everything that we've done has been off market because that's, in my opinion, the only way to find a great deal. So the first one, the eight unit, believe it or not, came from a handwritten letter. I just made a custom list of about 40 properties in my area that were similar. Sent a handwritten letter out to these 40 owners. I got three phone calls. One of them happened to be this one couple that was. Ha. Just so happened to be going through divorce at the time. And, and they even told me afterwards when we closed, they said, jason, just so you know, the only reason that we even opened your letter, and the only reason we thought that there could be some real credibility to it was the fact that it was handwritten because they said we get at least 100 postcards and letters a year about this property. So I thought that was incredibly valuable feedback. Yeah. And then the next one was the 16 unit that the friend of mine, that's a 5050 partner, with me, he is a wholesaler primarily and he specifically was targeting multifamily properties at the time. So he pulled a list of multifamily in North Carolina, I don't know what size exactly. He searched like probably 8 to 30 units or something like that. And then he put it through his system where he does text blast campaigns and he can, you know, with the click of one button send a thousand text messages to a thousand different owners, you know. And so that's how he found this deal that we got seller finance on amazing terms. And then the 20 unit was also from the same source, from that same partner of mine from texting. And he, they actually, the sellers had already signed with an agent. They were going to list it soon, but she hadn't yet started putting together any other paperwork or information. And frankly that agent really didn't know what she was doing. She didn't really have any business representing somebody on a sale of that magnitude. And so we were able to get a great deal because of that. The third one was. Oh, so that, that 20 unit was the third one. The fourth one was the 16 unit that I bought on my own, which, that one came like word of mouth from a friend because there was an agent representing the seller but he hadn't listed it yet. So it was just a pocket listing. And he was friends with this guy in my town and because this property is about two hours away. And so my friend went and looked at the property and he was scared off. He was like, this is way too much work. I'm, I can't handle this. But I might know somebody that's, that's willing, that's able to do it and maybe perhaps a little crazy enough to do it. And so I connected then with that agent and went and looked at it and was able to negotiate a pretty great deal off market with that pocket listing. And, and then the final one was the RV park which we're actually, we're converting it into a tiny home community. So it's actually going to be super cute when it's done. And cash flow like crazy. That one I got from my normal PPC campaigns that are not targeted for that type of property. Frankly it was, it was luck if anything. And we were able to get an insanely good seller finance deal. No money down, 4% interest, 30 year am, 10 year balloon. So that thing once, once we've got it, those extra pads added to bring it up to 44 and it's fully stabilized, that, that one by itself is probably going to cash flow 20 grand a month. It's absurd.

Yeah, that's fantastic. So, yeah, good returns for your investors. Right, and, yeah. And yourself. Obviously.

I don't have investors.

That's, you know, that's, that's terrific. So what are you going to do with all that money? You have any plans? Are you trying to reach a certain point? I'm not asking you the big question yet.

To be honest. I'm a little contrarian to most folks in this space that have these huge absorbent goals of reaching a certain door count or a certain cash flow number. I don't really have set goals because I'm, I'm way more relaxed and just fluid in the way that I work. And if I, if I force myself to hit certain KPIs every day and hit certain goals, to me that would make it feel too much like a job or too much like homework. And I'm just, I'm just not one that thrives with that type of, that level of structure. So I don't necessarily have a goal, I just have a, I'd call it more of a direction. And that's really just continuing what I'm doing in the immediate future because of how much I have acquired over the last couple years and how much money some of those rehabs have taken. I need to, in the next three to four months, focus on rebuilding liquidity. So I have a very hefty safety net. Because when it's easy when you're growing a business to put everything back into the business over and over and over again, but then something happens. You have a handful of jobs that take too long to get finished, or you have a weird dip in the market where nothing's selling for three or four months. So you don't have money coming in on the flipping business, but you still have these huge overhead costs. Well, then you're like, then you're trying to figure out from one of your private lenders, hey, will you loan me 50 grand for, you know, three months or six months and you know, I'll pay you back whatever amount you agree upon and just so you can keep everything floating. Because the deals, when you look at all the deals on a deal to deal basis, they're all incredible deals. They're huge margins. I mean, right now, just the 29, I think, flips that we have going, I've got right around $2 million in equity in all of those flips. Now granted, by the time we actually sell them, pay realtor commissions, closing costs, and I'm sure some of them will end up selling for a little bit less than we plan, you're still looking at, I don't know, 1.5 in liquidity. That's coming back over the next six, seven months. So there's a ton coming back soon. But. So in a long winded way of answering your question, in the immediate future it is to stop buying more big properties that are going to require large down payments. I need to get really, really healthy levels of reserves to where I can continue to grow the flipping business but still be incredibly safe with it and not ever get myself back into that illiquid point, if that makes sense. But then after that, I'm not really sure. I think I'll probably continue doing a lot more of the same, you know, once I've got a really, really healthy base of reserves, I think I'll continue doing some midsize apartments and perhaps more RV parks or trailer parks, depending on what comes across my desk.

Yeah. Well, now do you have kids and a wife, I think you said you referred to your wife earlier.

I have five children.

Five. Oh my gosh. So you need financial freedom just for that too. Are they, what ages are they?

Oldest is 10. So we've got 10, 10, 7, 4, 2 and 7 months. And they're all girls except for the 7 year old.

Gonna get interested. That's a lot of weddings you're gonna be paying for, right? You need a separate reserve fund for that. That's great, but. And you mentioned pay per clicks too. How much do you spend on an average, would you say for pay per clicks?

It varies. I would say on average, my normal marketing budget per month is probably somewhere around 10 to 12,000amonth.

Wow.

Yeah.

You are spending a lot. Yeah. So no wonder you're getting some good leads. Yeah, I haven't paid for pay per click anyway. I've paid obviously to market some of my flips, but not to get the leads. So now I know who the expert is though. Sounds like you're doing awesome. Really does. So, as I told you as we near the end. Well, first, is there anything else you want to cover before I ask you the big question here?

No, nothing in particular. There's. I could talk about anything. Real estate all day long. But you know, there's only other thing that I, I'll throw out in case any of your listeners feel like looking me up and learning any more from other videos that are online or getting up with me directly is I do flip a lot of manufactured homes, the single wides and double wides on land and a lot of people don't do that, don't know about it. There's a huge opportunity there. I would definitely recommend if you're. Now there are some markets where there are very few of those around, you know, and in that case, you know, I don't know what to tell you, but if you're in a market where there's a decent amount of those around, it's. It's a huge opportunity.

Well, and the other thing that we talked about that we were going to mention on air was you and I have something else in common and that's looking for capital partners. So while I do some syndications, I'm doing joint ventures as well, more and more because I don't want to be limited to just those because they're harder to get the right deals across the line. Granted, there's a lot better pricing these days, but I would like to do more of the joint ventures. And I was telling you I've looked low key for partners and I went to actually, what brought this about? I went to a Small Business Administration thing and we had to write on this huge piece of paper what our goals were. And I'm looking to do a couple deals right now. And it's like I have to just be loud about it and just say it right out. I'm looking for capital partners. And, and so it's helped to be right up front on that. So. And you are too, right?

Absolutely, yeah. For all of our flips, we. I rarely use my own cash to buy flips. I almost always either use hard money or private money from just private individuals. And the more I do this and the longer I do it and the more I get myself out there onto some podcasts and local groups and, and also speaking at local groups, presenting and stuff. I just spoke last month at an event in Raleigh, everything like that. Any type of networking is super helpful. And it attracts wholesalers to potentially bring me deals. It attracts private lenders to lend all my deals. But yeah, if, if any of your listeners are interested in talking about potentially lending on any of my flips, I can tell you every one of my flips have at least 30% equity in the deal. So your LTV is really low. Your loans collateralized by the asset. And I normally pay 10 to 12% interest depending on how much you're lending and what terms, what other terms and flexibility we get with that. But I would, I probably have between all of my current flips somewhere around 6 million out on loan between all the hard money and private money. And I would Say at least three and a half of that is private money. And most, most of which are folks that have been doing this with me for years. So if you were interested in it, and even if you wanted referrals from private lenders that have loaned with me full cycle on many of my flips, that I've got plenty that would be more than willing to talk to you if you go. I actually not long ago acquired the URL jv with jv.com if you want to. If you want to go to that URL, there's a. It takes you to a little investor tab, you know, where you can fill out a little form that sends me your information so we can have a conversation about it if that's something you're interested in.

Interesting. Very good, Very good. All right, so is there a pivotal person or event that's either brought you to where you are now or that's pushing you towards a certain goal?

Yeah. So obviously the most pivotal person, biggest supporter in my life has been my wife, hands down. She supported me 100% of the way, specifically real estate related. Unfortunately, I can't remember the guy's name. It was a guy that I met at a friend's wedding, you know, six or seven years ago that I think he had flipped about 10 houses by that point. And he recommended that I start listening to the Bigger Pockets podcast, which I did. And I became addicted. I loved it. And I listened to every single episode backwards from that point. And that's where I really. Where all my knowledge really started and going down all those rabbit trails. So that was definitely a pivotal moment. And I would say too, more of a. A guiding principle or a why for me of why I continue to push forward. Because I could have retired completely from the real estate and sat on my hands two years ago. You know, people ask, well, when is enough is enough? Why do you keep doing it? And you know, I heard Brandon Turner from Biggerpockets one time answer that question in a way. Well, he said, enough is enough when there's no more mouths to feed. Enough is enough when there are no more people being trafficked. You know, because money is only good for the good it can do. And for me, as a man of faith, there's a verse in 2nd Corinthians 9, 11 that says, you will be enriched in every way so that you can be generous on every occasion, and your generosity will result in thanksgiving to God. And so my goal is to be wealthy enough so that I can be generous on every single occasion to every homeless guy to every waitress, everyone that I come across. And I'm not there yet, I'll be the first to admit, but that's, that's what drives me.

Interesting. That's great. That's great. All right, well, so go ahead and give people your contact information. We'll put it in the show notes. But remember, so they might be on itunes or Spotify and not be able to see us. So spell out your last name especially.

Yeah, yeah. So you can find me on Instagram or Facebook just by my name. Jason Veeley. V is spelled V as in Victor E L I E. And I'm also on LinkedIn, although I don't really use that. I'm also on Bigger Pockets. And if you want to see any more videos of podcasts that I've been in, you can just search my name in YouTube. There aren't many Jason Vel's in the, in the country, so you'll find them pretty easily. But yeah, if anybody needs anything, feel free to connect or reach out to me through the website JV with jv dot com. Or if you want it, you're just curious what my main house flipping website looks like, feel free to check it out. It's Cape Fear Cash offer dot com. Kate Cape is in C A P E Fear. F E a r cash offer.com. happy to. Happy to connect and help however I can.

Very good. And we didn't get to talk much about Cape Fear, but before we started recording we were. And you're going to find out for sure what the backstory is, right?

Yeah, let me know.

Yeah, that'll be fun. So we'll have the show notes in there and so thank you so much for coming on and we will stay in touch for sure. All right, awesome.

Thanks so much for having me.

Thank you.