From School Hallways to Real Estate Deals with Expert Dr. John Crutchfield, Jr.

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Bowling here with Pivot to Prosperity, the podcast brought to you by Pivotal Real Estate Investments, where we help our investors build wealth and income through commercial real estate that also improves communities. And today we have John Crutchfield as our guest. John, thank you for coming. Appreciate it.

I'm glad to be here, Jenny.

Yeah, well, why don't you go ahead and tell us who you are?

Well, first of all, I want to say thank you for inviting me onto your podcast. I know that you invest in your listeners and bring them great guests, so thank you for doing that. But I'll say hello to all of your guests as well and just talk a little bit about where I come from. I like to tell the story of being a kind of a typical young man that was brought up in the South, Tallahassee, Florida, and, you know, mom and dad both at home going to work every day. My mom was a teacher in Tallahassee, and my dad was a accountant at Florida State University. And one of the best things they ever did was get up every day and go to work. And so I saw work ethic and consistency growing up and decided that I would follow that path because that's what I was trained to do. I have a brother and a sister. And we were all told, it sounds so strange now today, but we were all told, you know, when you get 18, you need to be able to fly on your own. So go to school, get good grades, listen to your teachers, be respectful, and, you know, if you get good grades, you'll be able to go to college. And so I went to Florida State for college, thought I was going to be a preacher back then. Found and met the girl of my dreams who would be a good preacher's wife, and then became a teacher out of college and taught middle school math and social studies for about five years, with people saying, hey, you'd be a good principal. And in order to be a good principal, you got to go back to school and get more schooling. So did that following the rules, and was a principal for about five years. Actually worked in Louisiana, where my wife is from. So we got a lot of that Louisiana culture and cuisine, as you can tell if you're watching this on video somewhere, and then ended up moving to the Tupelo, Mississippi area, which is about an hour south of Memphis, and was a principal there for a while as well. And then something kind of changed in my story because, you know, I. I kind of done what I was told to do for the first 27 years of my life. Right? You go to school you get good grades, you go to college, you get good grades, you go to work, you do a really good job, you go back to school, get a promotion, you make more money. But it seemed like as the principal of a school that had done all of that, that had a doctorate degree, at that point, it just seemed like it wasn't enough money to make ends meet. It seemed like my financial education was still lacking and my ability to provide opportunities for my family were still limited, even though I quote, unquote, had a terminal college degree and had a very successful position at a young, young age. So I started looking for ways to increase my financial education, but also just provide more opportunities for my family. And there goes my venture into learning about real estate and learning about investing. So, you know, long answer. That's where I come from. And that's the story, that's the background. I've been a teacher, principal, or professor at colleges, and now I'm a full time real estate investor that likes to make deals. So it's pretty cool. Great.

And you've been in it how long now?

This is year seven. So I started investing real estate really, really focused around 2017. I think I did my first deal a couple years before that, but year seven is what I'll say.

So, yeah, you saw, I would guess you might not have felt it at the time since you were new going into it. You know, I, I watched, you know, several ups and downs since I've been in it 40 years. I was busy with kids and doing soccer though, when the Great Recession hit. But, you know, 2012 and 13 were climbing and so 17, were you thinking that it was getting pretty high then as far as prices or what did you start with? Were you doing single family or.

Yeah, I was doing single family and small multifamily. And, you know, it's interesting because when you're young and you're coming into the business, you hear the stories about 2008 and the recession and you hear the stories about when prices were lower, but you pretty much come in looking at prices and you never have seen the lower prices. So I pretty much saw the market for what it was in 2017, 2018, full of opportunity. And then of course, covet happens and now we're in this massive inflationary period and we could kind of see, okay, this is my first time seeing real estate maybe stabilize a little bit or even go backwards.

Yeah. So what were you doing through Covid?

Yeah, so through Covid, I had a, you know, portfolio of hundreds of rentals, and that was my Full time job was flipping distressed properties, distressed single family homes or small multi families, and managing a rental portfolio. And when Covet happened, you know, I had more debt than I had ever had in my life and was worried out of my mind when they started saying people might not have to go to work and was trying to sort out how that might affect, you know, people's payment patterns and geez, I was also trying to manage my own household and you know, you know, I've got two kids and a wife, so, you know, trying to make sure we were all set for dealing with the possible health concerns and stuff like that too, so.

Right.

Yeah, I think. Oh, oh. And for. Let's, let's not forget that school closed and I had two kids that we now had to manage at home, so.

And you were the teacher, right?

Look, I was, I was a teacher in the past, but I have, I have left that. And I, I like to laugh because Covid reminded me of just how important our school system is to our work and our normal patterns of behavior.

So how old were your kids? Well, how old are they now?

So they're 10 and 12 now. My daughter's birthday is actually today. Well, I don't know when people will listen to this, but she's an April fool's baby. So April 1st is. It's kind of her birthday. So she, she doesn't like to celebrate her birthday on April Fools. So we celebrate it a couple of days before because she, she says she doesn't like people saying joke, making jokes on her birthday or playing tricks. Yeah, but, yeah, I mean, she actually was in kindergarten when Covet hit. So it was her first year in school. And it was her first year in school. And school like closed in February or late February or March, I believe. So she never had a first full year of school. And she thinks that, you know, breaks from school and time out, that's totally normal. Like we were supposed to get breaks and hey, school might even close for a year and a half. Like that's the world she grew up in, I imagine.

Right? Yeah. So when you're. Well, your son then was second grade?

My son was in second grade during COVID Yeah.

Yeah. So how did he fare?

Yeah, so we were fortunate. I mean, mom's a professor at a college and dad's an entrepreneur. So, you know, we actually just started a little co op school and told some of our friends, hey, if you need to go to work, you know, know, send your kids with us. And mom would take them during the morning and I would Take them in the afternoon. And, you know, the school started doing some virtual work. So they. We would kind of monitor their virtual work and then we do, you know, mom and dad lessons mixed in there, you know, faith and. And finances. So it actually ended up pretty good. We were able to spend more time with the kids and teach them more of what we want to teach them anyway. Right. Versus what they're learning in school. So, yeah, it actually ended up pretty good because we had a lot of flexibility with work.

That's good. Yeah. I heard so many different things. So my son was in college, and thank goodness he came home and stayed with me, so we had some extra bonding time. He had gotten a taste of freedom, but it was his senior year, so fortunately, University of North Florida did let him cross the stage. But, yeah, it covered. Really messed a lot of things up. So. Yeah, I was wondering how it went for you on that. And so. So he got to see both of them. Got to see how you work, too, because you're. You work from home, right?

Yeah, yeah, they. They got to see us work. And they still do. They still get to see us work. Mom also does a lot of virtual work, too, so.

Oh, yeah.

I can't say that they think we're. That they've seen anything like normal, normal jobs just because we have so much flexibility. You know, if they hug us or kiss us long enough, you know, we usually take a break, so.

Well, that's a good way to teach them, right?

Yeah, yeah, yeah.

So, well, then. So you were doing single and multif family rentals. You do buy and hold, right? Or we do it.

I do buy and hold for the most part, but we flip properties. I like to say we kind of have a comprehensive real estate business now. So we have rentals where people are living and going about their lives and paying us rent. And we handle the property management across a portfolio of, you know, probably 500 people at this point. And then we also buy distressed properties and we flip them. So sometimes we sell them to homeowners. And then we also even provide property maintenance services for other landlords and homeowners that need work done. So there's some vertical integration to what we do just because we have to have people to manage my own properties. So we started offering services to the public so that. That we could help them too, since we have to have the systems anyway.

Well, that's good. And then you probably are coaching, I imagine, too.

Yeah, yeah, I'll help people that want to learn how to do this. Yeah, right. Yeah. I actually Think that's where I get most of my energy is from helping other investors or other people that are interested in learning how to build portfolios or just how to build businesses. And I get a lot of energy from that. So I'm pretty active on social media as well.

Well, that's good. Yeah, yeah. And so are you still doing a mix of the single family and small multi family or what. What do you do today?

Yeah, so same business today except for, you know, we probably don't hold as many of the small, you know, single family houses, if any. You know, we're usually with single family houses either wholesaling them to other investors or flipping them to homeowners. You know, we have run across a few portfolios of single family houses. You know, if there was a big group and we've purchased those to hold, but the plan is really to hold them for a defined period and then flip those to homeowners. So today we like large multifamily or commercial projects as holds and we like the smaller deals as flips.

So like. And what's your buy box? Where are you?

Yeah, so most of my portfolio is going to be in southern states that we like. So the Sun Belt, but also in Texas. Will. Will invest in Texas. We like hundred units or more. We really like to be direct to seller because we've been doing some creative things on the finance side. We like taking over mortgages, assuming them, if we might call that the lower interest debt. I also like value add projects. So we like properties that, you know, may be a little bit distressed or may have some room or margin to increase rents based on renovations that we could do to the property. But you know, the deals that we look for are, you know, either the seller is distressed or the property is distressed, maybe mismanaged in some way. And we have potential to add value to the property. Right.

It's easiest way to drive value up, right?

Yes, yes.

It's kind of a no brainer when you put money in. It puts. If you do it right. I mean, you know.

Yeah, but.

Yeah, yeah, yeah. So are you doing class A, B, C?

What do you.

What are you working with?

Yeah, for the most part the distress is in the B and C world. We've again been trying to do more of the bees, but the market is. There's a lot of competition right now for these projects. Yeah. And I think, I think if I'm honest, we've been doing more Cs because there's a little bit less competition. We feel like there's a Little bit less risk in the workforce, housing and in the property, how I say it, the price per doors being a little bit more reasonable, you know, in case market turns. So we haven't been chasing the high B and A class assets just because it's a different. It's a different. It's a different business altogether.

Yeah, it is. Yeah, for sure. So what would be an interesting story to tell the viewers about a surprise for you say that you got into with one of the properties.

Oh, a surprise.

A surprise. What's a surprise?

Yeah, so I think, I think multifamily properties offer a just a variety of experience for investors to get involved with. I mean my favorite deal I've ever done is a 66 unit apartment complex in Tupelo, Mississippi, direct to Seller lead where a lady only apartments with her husband and they just wanted to get out. They were mismanaging the property just not because really not because of the property or because of them. It was just family property that they were doing the best they could and they didn't really need the money or need the investment to be optimized. And so that property is, you know, kind of taught me a lot about renovation and you know, remodeling, dealing with contractors, you know, when to pay them, when not to pay them, what to pay them. I think that's one of the most fun things, insurance and the different variabilities within insurance rates and how that can affect your cash flow. But I think, you know, that property also, also teaches me about the variety of people that you get in the properties. Right. Which I don't think investors often think about or talk about because we're looking at yields and returns. But when you have 66 doors together in a space, you have 66 individual lives and personalities and, you know, relationships and all those kinds of things. If I think about that property, you know, you have tenants who pay their rent early and they, you know, don't really want to be bothered. They're just living their lives. And then you have tenants who you know, are in domestic disputes or. Yeah, you know, you have tenants who are. I'm just thinking about all the things that. One of the craziest things that happens, you know, tenants in an argument in the middle of the community and you know, lady storms off because she's going to leave, she's very upset with her husband and she thinks she's going in reverse, but she, it's go in her car and runs right into the apartments. You know, there's all kinds of things that, that you learn, but what you really learn is that good management can produce good yield and can produce like life changing cash flow and opportunity, especially in multifamily. And you know, I've seen like that project, I've seen us take the income and 3,3x the income just with good management and running it like a business. And I think transforming community is one of the things that is most fun to me about the business is that you, and that's actually why I wanted to talk to you and be on your podcast is because real estate is especially multifamily is really about like these communities and how you can create communities where people like where they come home and they feel safe and you know, they feel like they're connected to their community. So you know, we can take properties that may have a bad reputation or you know, take properties that may have not been performing at their best and turn them into places where people actually feel home. And I think that's pretty cool about what, what I do.

Right? Oh, I, I'm with you. Yeah, I think that it's, it's very neat and I, I have some peers that even take it a few more levels even as far as making the community community and so that, you know, it's interesting. We can, we can talk about some of that. I, I'd have to read some of the things on their website to remember good examples. But yeah, there's a lot you can do to, in a community. So I'm always interested in hearing other, other approaches for that and whatnot too. But yeah, I looked for instance at some of these humongous apartment projects. Now I'm in one In Texas, that's 550some units and that was as big as I felt like I wanted to go. But I'm in Orlando, I live in Orlando. And Universal Studios and Disney are both Preparing to do 1000 unit apartments to try to provide for affordable housing for their employees. And I don't know that I would want to have a thousand units in one spot. That's just a lot of units. But I don't know, what do you think about that?

Hey, like you've got some of these metros like Dallas, where you've got 7,000 people moving there every day and you know, you've got huge infrastructure projects happening everywhere. So you know, it seems like there's the capacity to continue to handle the growth. You know, I think when you've got robust markets with, you know, diverse job industries and the migration patterns showing that people want to be in warmer states, people want to be in more business friendly states. And you know, I think when you see that your investment should follow that migration pattern. Yeah, so.

Oh, yeah, wholeheartedly, for sure.

Yeah. Yeah.

And you are in a Dallas suburb, right?

Yeah, I do Dallas. I do deals in Dallas. You know, I have a property management company and we own property and we have a property maintenance company in the Dallas DFW area. So, you know, I've experienced firsthand great schools, great communities, very business friendly environments in terms of city governments and municipalities. Great opportunities to raise family, raise kids. So I think there's a lot going for the Dallas metro area.

I have only flown through there. I've never been able to drive around, but I'm looking at a couple properties in Dallas. We'll have to talk offline, but yeah, there you go. To know more about Dallas, I've got to get there because I, when I think of Texas, I think of getting on a horse and I like that.

Yeah, yeah. So you've got the Cowboys if you're a football fan, and then the Rangers if you're a baseball fan. And then you've got different vibes really between Dallas, which is like modern living, if you like city, and if you want to feel like you're in New York in the South, I would say Dallas is, Dallas is getting there. And then you've got the Fort Worth swag. Right. Which is a country feel of a big city. Right. With the music and the horses and you know, the, the more southern charm. And if you're, if you live or if you work in Dallas anywhere, like in the metro, you say I'm, I live in Dallas. It doesn't matter what suburb you live in. You know, you, you just say, I live in Dallas. But if you live in Fort Worth, you say Fort Worth because it's a difference. The modern swag versus the old Southern charm. And they have their own unique thing going on.

I see. Good to know. And then, yeah, Houston, you don't talk about that really, when you're talking Dallas, it's like.

Nah. Yeah, it's about, I think it's about four hour drive south and it's just a different place. I, I don't even invest in Houston.

No.

I know some people that do, but it's just a different, it's a different, different vibe.

Yeah. Okay. Okay.

Well, so I think Houston is like one of the biggest cities in the world. I think just like in the, the spread of the city and the size, it's, it's got a lot going on. But yeah, Dallas Is, is, is probably a more condensed area and there's a lot more suburbs, you know, in, in.

Dallas that have sprung up and sophistication, I gather.

I, I, I, I, I, I will claim Dallas. I, oh, this is year five.

Okay. And if you've been investing in it, you've probably driven all over the place.

Yeah, yeah, I love it.

Yeah. Well, good. Well, so again, tell me what your buy box is. Exactly.

Yeah. So if, if I, if I had to just drill it down, you know, 100 units or more direct to seller. Right. We love brick structures, but we'll do know we'll do wood frame structures. We also like value add potential. We try to stay somewhere under 75,000 a door. So again, that's going to lend itself to probably a low B or C class asset that has been distressed in some way, whether it's the owner distressed or the property itself distressed now and.

Speaking of that, since interest rates have been high so long and we're expecting some distress in, in this industry over the next year to two years, probably. Are you seeing much of that in Dallas? Right. Yet?

Yeah. So I definitely think that values have stabilized and they're not continuing to climb. I think we've seen price per door, like cap rates, you know, definitely be affected by interest rates going up higher. We've definitely seen activity, you know, properties changing hands less over the last probably 18 months. But I think market wide we're seeing less real estate activity, lower, you know, lower changing of properties per hands. I mean, it's working. If they raise interest rates, it's going to slow activity down and a lot of buyers are out of the market or waiting on the sidelines to see prices come. You know, either prices come down or interest rates fall so that they can get back in.

Yeah, yeah. And we're seeing a lot more deal flow at this point too. And prices have seemed to be correcting at least in, in Florida and the few places I've been looking in Texas. I'm not looking just anywhere in Texas. I'm sticking to the big cities, you know.

But yeah, and I think something else that we've seen is sellers be more open to creative options than they were, you know, earlier. Just people being willing to carry some debt, people being willing to give more time frame for due diligence. You know, it seems like people are more open to conversations because they have to be. They're just not getting as many like people putting their earnest money down hard from day one and offering more than the properties. You know, we're Definitely not seeing that.

Yeah, yeah, same here, too. Although it's still pretty tight in Orlando there. There's a lot of demand still, so. But the. Yeah, you're not seeing prices climb so much, but. Well, good. Well. So I'm going to ask you my key question here now. Can you share with us either a pivotal person or event that changed your life and brought you to where you are today?

Yeah, probably. My wife.

There you go.

Yeah, yeah, she's. She's. She's pretty awesome. Married my wife at 18 and been married for 18 years now, almost 19. And I just. I think that for a lot of guys, you know, the. The woman that you meet can be pivotal in the decisions that you make and the choices that you make and the stuff you decide not to do and keep you out of trouble, help you cultivate good friends and relationships. I know my wife pushed me to get more education. You know, I probably would not have. Have pursued some of the. The growth that I pursued if it wouldn't been for her admonition. So that's one of the relationships. You know, maybe that's. Maybe that's love talking.

That's sweet. That's good.

But. But no, I. I'd say in business and, you know, life, you know, there's been elders at churches that we've been a part of that, you know, nurtured our family and talked us through some, you know, times where I was deciding to quit my W2 job and go into entrepreneurship. You know, talked us through, you know, the risk of those decisions and talked us through, you know, how to agree or get on the same page about how to raise kids, you know, so faith is important to me, and relationships with leaders in our faith community have. Have also been helpful.

Great. Yeah. Yeah. I think that there's a lot to be said for that. And we are here at Easter weekend, too. So, yeah, you know, it's a. It's a good weekend to be talking about entrepreneurship and, and new beginnings and all that, because, you know, that's what we hope our investors realize. You know, it's like I was telling you, a lot of my peers are in their 60s and thinking, you know, maybe they need to play it safe with their money. And they might be thinking that investing in real estate isn't safe, but yet it's the most durable asset of all time. It's the things that there's been wars of over since the beginning of man. So it's not exactly a something going away. It's not going to dissolve. But that's that's kind of my little take on it. And I. So I think it's important for. For people to. To realize that. That it's never too late to pivot and to start vesting in real estate. And I think that it's pretty. Pretty easy to talk to people that are also doing it nowadays. It used to be tough, but now syndications have made it easier for more people to do it. And so, yeah, you can get some comfort level talking to others real easy. So, yeah. Well, I'm so glad that we got to get together now. I want you to go ahead and tell people how they can reach you.

That would be great. I'd love to reach people at Grab the Map, which is my company name. You can usually find me on social media at Jonathan Crutchfield Jr. Or at Grab the Map and website isgrabthemap.com. i'd love to talk to investors that are looking to get involved in deals or people that feel like they need some education or mentorship or coaching. Always looking to help people that are trying to do deals. I've also got a pretty interesting book on Amazon right now. I like. I like to think it's interesting.

Yeah.

Called House. It's called House Poor to Real Estate Millions. House Poor to Real Estate Millions. And it's all about, like, the mindset shifts that need to happen in order to. To do real estate, especially when you don't come from a whole lot. So when you. When you have to learn how to manage your money and manage your credit score and manage your relationships and all those things, it's really a book about, you know, the mistakes you shouldn't make. And I think it's helping some people. Some people have found it entertaining, especially in this time when the market is kind of going through a little correction. Some people are having some trouble with some of the deals they've done in the past. I think people can resonate with some of the stories in there about the correction in the market.

Great. Okay, well, send me the link and we'll put it in the show notes, too. If you. If it's a. Well, whatever information you want, I'll send you the show notes too, so you can make sure what. What you want is there. So. Well, fantastic. Well, thank you so much. I appreciate. Are we finishing in time for you to get to the party?

Yeah, yeah. Birthday party for my daughter in about 10 minutes. So I'm gonna walk out of the door right when we finish.

Yeah, you better get going. So thank you again. I'm glad you came on, and we'll talk later about Dallas.

Hey, Jenny, thank you for taking the time on a Friday afternoon.

Oh, of course.

Talk to you later.

All right, take care.

All right, bye.