Real Estate Developers: How to Get Your Foot in the Door | Tom Ferry Podcast Experience

Hey welcome back to the show here still in my grandmother's house in florida doing the salmon thing i've got my guy andrew here next to me andrew welcome to the show thank you so.

Much tom pleasure to be here oh.

There we go and coach tori in the house so we were just doing a little off camera work and if you're watching this show right now if you are the kind of person that would like to work with more developers more builders if you are looking for a strategy to get an n in your marketplace then you're gonna love today's.

Show.

So here's the thing entrepreneurs leaders salespeople we all wanna create consistent repeatable and scalable ways to grow our business and our income and we wanna do it better faster and more seamlessly why so we can actually enjoy our lives take vacations and spend the quality time we want with the people that we.

Love how do we do all this.

Without spending a fortune or running ourselves ragged that's the big question and this show is dedicated to the.

Hey andrew welcome to the show man thanks so.

Much appreciate you being here yeah coach.

Tori in the house tom hello tori how many days in a row have.

You worked out now we're at eighteen sixty five since you challenged me back in twenty nineteen has the testosterone worn off yet or like nope the testosterone keeps going higher baby right so hey.

We were chatting yeah and you said i'm working with this remarkable guy in la he's just done this incredible work and the thing that i honed in on i mean obviously your backstory is fantastic andrew so give give people before we get into sort of the how to and the nitty gritty if i want to work with more developers i want to create relationships with builders no matter who or where i am your backstory is fascinating born and raised in.

Boston framingham right framingham just outside of twenty miles west of the city on the marathon route and grew up in suburban massachusetts born nineteen seventy nine ended up going to university of massachusetts graduating in two thousand one studied japanese while i was in college and ended up moving to japan for a couple years to further my language ability and teach english to elementary school students fantastic experience got to travel got to not have a real job for a little while and just really enjoy myself after i left japan i didn't want to move back to boston i just wanted to experience something different and i thought let me move to the west coast to my best friends moved out to to la that were in the entertainment business and i had no interest really in being in entertainment i knew i was more business oriented entrepreneurial but i thought i would get a job working maybe international trade or something you know through japan and la seemed like the right place to be so packed my car my girlfriend at the time hopped in my vehicle we drove for three weeks ended up in la didn't know what i want to do i had ten grand saved from living in japan working in japan and then my buddy who was working at the time at a mortgage company in philadelphia was ultra successful you know this was the end of two thousand three and the mortgage market was starting to really crank at that.

So you're the one that did this to us yeah yeah i don't want.

To talk to yeah exactly well you know what it was interesting i jumped right into mortgage lending mostly subprime lending my real first job not knowing what i was doing thinking all that was just normal all of that type of lending quickly rose through the ranks of the company i was working for ended up getting my own broker's license at that time a couple of years later in two thousand five and opening up my own shop timing wasn't great as if everyone remembers you know the world ended you know a couple of years later yeah so how did you pivot.

You know we you know you hit the mortgage meltdown a lot of friends a lot of people i still know that are still in the space today but y more of them left the space yeah so what did you do.

After yeah it's interesting you said so like i had thirty loan officers at my company we were cranking and a lot of them were my really close friends and all my friends said oh it's all over i'm going to go get real jobs they got corporate jobs and to me i stood there and said you know what this seems like the real opportunity right now like the world has changed and i guess i was brave enough and stubborn enough and had enough drive and tenacity just to say i want to now pivot and take advantage of all those infomercials and all those real estate investing books that i've been reading i had a passion for getting involved into it i actually had bought a fix and foreclosure in two thousand five in mammoth and flipped it at the time and i was really interested in getting involved in investing so i jumped right into that purchasing some really early on some reos real estate owned properties in two thousand seven in the inland empire and then diving a little bit out of into out of state investing and all of those were giant learning lessons i lost a lot of money because all those properties.

Ended up no one ever tells me it was a huge learning lesson i made so much money yeah it's always like you know what yeah so everyone knows to buy on the dip everybody knows it how did you have the courage to actually pull it off was it the courage or the cash i.

Didn'T have a lot of cash at the time it was the mortgage business you know like i i barely got out of that you know without declaring bankruptcy i mean it was hard to get out of the lease you know i was really stressing finding someone to take over my lease getting rid of all the furniture and all the phone bills and contracts and everything we had so i had a little bit of money but i borrowed a lot i leveraged a lot and at that time there were hard money lenders offering a lot of leverage at really high rates i remember an eighteen percent ninety percent ltv loan that i obtained and i probably borrowed the rest on a credit card or something i was doing things not necessarily the right way how old are you then twenty six yeah yeah.

There'S something to be twenty six and just you know come on seven yeah yeah you don't do that stuff now.

No no i'm not a big gambler.

Yeah no so so i guarantee just knowing the timing if you bought early you weren't making big margins and that's where the lessons come from yeah but trent transition to how did you like when did you finally get your real.

Estate license so i had my so if you remember in california you know you could get a broker's license or a salesperson's license and the broker's license you were able to run a mortgage shop with that broker's license they changed that after you know dodd frank got an actor two thousand nine ish or so and you know now it's an mls license but i just had that broker's license from two thousand five that.

Okay yeah so so you're fixing and flipping did you a lot of them.

I did a lot so so i lost a bunch of money from two thousand seven two thousand eight i didn't want to stop i went to a real estate event in las vegas until the end of two thousand eight and there was a gentleman that went on stage that was just super impressive the guy was from newport beach jason his name was lee oh okay yeah okay.

I knew a guy from yeah what was lee's last name birch okay yep.

Great guy he was on stage super successful the nicest suit and talked about how he bought apartment buildings and and you know i ended up phoning him up after the after the conference and i said i'm interested in potentially partnering with you you know he was obviously had a lot of money and he said why don't you come down to my house so i got in the car drove to pelican hill eight nine ten million dollars house this thirty five year old kid lived in it was really successful and it was just so impressive but he was just the nicest guy and he said look i like you if you can go out and find opportunities i'll put up all the money and we'll split the deals yeah.

So became a bird dog yeah i.

Became a bird dog i was just really going after it and building relationship at that time in two thousand nine bank owned properties were really the thing short sales hadn't really taken off yet but i just went out and built relationships with as many bank real estate reo agents as i could and in march of two thousand nine i.

Put together my first deal that we purchased on a house in north hollywood for one hundred sixty thousand we purchased that made money we kept going and together lee and i flipped over seventy homes from two thousand nine till the end of twenty twelve we really cranked and that completely changed my life while all my friends you know were working you know their corporate jobs that left the real estate business i had hung in long enough and educated myself enough and just was so stubborn and continuing to educate myself that i stayed in the business and really you know caught onto.

Something you made it through a cycle.

I made it through a cycle of.

Making it through a cycle yeah yeah tori did you go through any cycles.

Just a few yeah that's probably why i identify with andrew so much and we worked so well together as coaching client because his story is my story when i came from new york back in two thousand one you probably don't remember this but you were the first one to sign me up for coaching yes back in the day the palm springs hyatt and talk about short sale right the palm springs coachella valley had gone through that entire thing andrew went through so when i decided to move to orange county twenty twelve my family andrew was already at that point in sherman oaks valley legion and sino going up in that area where he's dominating now yes so what i find unique about andrew is he starts every day at zero that phrase we've implored for the last six years and he just literally his tenacity his grit and i always say to him i can coach opportunity but if you don't meet me halfway with grit and tenacity what are.

We coaching one hundred percent so so where does that come from like was it the japanese culture in framingham massachusetts like is it your parents like like.

No my my dad and my parents were amazing they're both deceased now but my my father and mom were were not like real hustlers so to speak i was always involved in sports as a kid at an early age from you know five on i was playing soccer when i got in high school i got involved in wrestling was a wrestling captain for for my high school played lacrosse played soccer and i was very competitive so that competitive i feel like today i'm still playing sports almost you know with my job i'm going out every day and just having fun and and and it's that spirit so wrestling really changed me as a person it was really challenging to wake up and have to show up at six am with plastic bags on and lose three pounds before school started and my other friends weren't doing that and it just it changed me and made me it made me tough yeah one thousand.

Percent my nephew joe balmani who you know joe same thing he was like number one in the state for his weight class and like he's like those disciplines carried over so nicely into you know being a salesperson with me then become a sales leader and now in residential real estate and like central coast all right so let's talk about developers it's a third of your business and just give people context like in in twenty twenty four how many how many transactions were you a part of i know kind of two thirds were like past client sphere including really a third past client sphere and then a third just reputation brand like they just they call you they find me right they see the properties you list all all of that but how many transactions on the builder developer side so i did.

Eighty one total transactions in twenty twenty four and roughly thirty or so developer transactions and is there a difference in.

Sales price between the development stuff versus your past clients in sphere and everything.

Else that's a great question yeah so like when i'm finding deals for developers the entry point is typically somewhere between one point three to two point five on the back end when i'm reselling a property for a developer they're more in the three to seven million dollar.

Range price where it is et cetera all right so if i wanted to get a developer the person watching right now is like okay all right i got the guy's backstory maybe i should move to japan become a teacher all right i get to lose everything in the two thousand seven eight nine hopefully we never do that again i want to win developers tell me the five six seven things you had done and maybe continue to do to like crack open the nut because everybody's going after them so you got to do something different yeah so what like give me the step by step what do i.

Do so you want to be able to understand how to identify opportunities that's really important so it's identifying opportunities and building your developer database so on the simultaneous simultaneously i would say educating yourself.

Is how do i how do i.

Find opportunities yeah so finding opportunities it's really about educating yourself on the numbers so understanding what builders costs are how much does it cost them to build price per square foot is really important so you can understand the math and it's not difficult and knowing your market of what something's going to sell for on the back end so if i find you know a property in los angeles a seven thousand square foot lot city of la you're allowed to build forty five percent of the lot size so that's going to end up being somewhere around three thousand square feet total if i know it sells on the back end for one thousand a foot my exit price is going to be three million yes and then you work backwards and you say okay how much is how if you can build three thousand square feet i know a developer is building for around three hundred fifty dollars a square foot okay three thousand feet is then going to cost me around a million bucks to build okay so i'm deducting that from the from the three million dollars exit price and then i'm factoring holding costs for the developer commissions they're going to have to pay on the back end and then i figure out okay if they want to earn say about twenty percent profit of you know total acquisition plus construction costs you know where do i need to be on an offer price so you start to understand those numbers every market's different obviously and la i think is unique there's probably a lot more development going on there than a lot of other markets but you can do this for things like fix and flip properties which definitely exists in every marketplace.

The key is the formula the key.

Is the formula and you put yourself.

In the shoes of the developer yep right knowing what margin do they want to make what are their costs and then what's the time of the you know time on money as well y so okay so that's fascinating you you answered it i think a very detailed that was that was perfect but how do i find the opportunities because you and i both know if you got the opportunities they have a tendency to find you right right so so how do i find the opportunity sure without.

Giving away too many secrets but you're going after properties everyone in los angeles turn this off pause yeah you're finding i mean the larger lots are the more valuable lots because you can build larger yep so especially in an under.

Yield you know small house big lot.

Yeah small house big lot that's going to be your best your best purchase.

But we can go find that in.

The tax records yeah you go find those in the tax records so you really want to go take title records and start searching and going i want to start with big lots small square footage yeah and you know if you can find a big lot with small square footage you want to go after those and what's interesting is your title partner first american titles typically yeah yeah we also have other systems you know we use property radar for data sorting.

And different unpack that yeah why do.

You use property radar propertyradar has a lot of different features which are interesting you know it provides phone numbers it has an easy way to export the data there's a lot of foreclosure information it's pretty comprehensive so yeah we like that but so the big hack is.

Find the sort of under built yeah yield opportunities small house big lot yep and then once you have them give us you know we were talking off camera like what are the four or five things you do to either get to know the developers or introduce the developer maybe to an idea sure so.

You can drive around neighborhoods see what's being developed in la at least you can it's pretty easy you go to the job site they usually have in los angeles and most cities they have the permit card right there with the name of the developer okay great go now you have the llc typically it's in an llc google the llc you know go do some research online figure out who actually owns it or go on title records go into the transaction history and look who owns that llc and the way you do that is you look and see the mortgage loan that's on the property so if there's financing you go into the deed of trust or mortgage depending on your state look who actually signed for the loan and now you have someone to go.

After bingo y so so i'll be the developer how do you connect with.

Me so a lot of times i would show up and i mean i have a mass a lot of developers now but in early days i was for the person here that doesn't have it i would show up at the job sites and talk to the workers and i would walk smart hack yeah i would go in there and just say is mike here you know like i would know the name of the developer and i would act like i knew him and like i lost his number can you please share like you know i need to get in touch with them they'd be like okay yeah here it is and then i would get in touch with them and i would say hey mike you interested in another deal they all are that that's.

Like i tell people like whether it's a private equity deal a company to buy a piece of real estate if you find an opportunity finding the money is the easy part but but establishing a relationship yeah you know watching the developers i knew from newport beach are now inside in dallas yeah there are some agents that are going after those people they don't necessarily always have opportunities right and i think that's the miss like hey i see you build all these house i'd love to be your agent yeah exactly right versus hey i have another deal for you yes right would it be reasonable for me to say hey if i bring you the deal i also get the listing right buy side sell side yep so but is there is there more to it i mean i don't want to oversimplify sure what i think is a complicate because andrew a lot of good agents in la and everywhere around the world are going after those developers so what gives you the edge beyond the deal.

Well i think at least the point where i am now is i have really good market knowledge i mean i understand i provide more value than here's a deal they come to me and say andrew you represent some of the most beautiful new constructions you represent i work with a couple of developers rob and mark build the most beautiful homes in the valley and they everyone wants to know what are they putting in these houses where do they get their materials i don't share all that information necessarily but i assist with the design on some of these projects because i know what buyers like when they come in open houses and they say this tile is amazing or these floors or the layouts so i can consult and i'm more of a resource for these.

Developers totally random i think that one of the moments of terry shodeen my speech coach yesterday on stage was and what that means to you is right i think a lot of people miss so her point was we have a tendency to say you know hey i'm the number one coach or hey i i do more development deals in the valley than anybody else or you know i have this incredible track record and everybody goes so right so what so i mean the last i just talked to carolyn young she's also really good but i think the cool thing that i wanted to share and she did it perfectly and what that means to you is i understand where to get the materials i understand pricing i understand what the buyers want so you're not just going to come into this cold you're not going to come into this neighborhood where you've never developed before cold i got you i think that little and what that means to you i'm number one and what that means to you is benefit only to the consumer or the person you're trying to influence.

Yep i will be adding that line into my it was it's great that.

Was a that was a mic drop i mean yeah i mean i've worked with her multiple times but that was a mic drop moment i watched everybody go like this oh yeah because we you know she's number one you're number one you're number one right like yeah.

Who cares who cares how does it.

Benefit me right i mean i want number two you'll try harder right let's.

Go avis yeah all right one thing tom about andrew that is so interesting is the humility and the authenticity that he comes with he's not your typical orange county louisiana agent right look at me blah blah blah blah and i love that sense of grittiness in him he doesn't understand no and every week i show up to calls and i'm like okay andrew how are we moving forward today coach i got this this got this this got this and you see it in a very process driven sop kind of analytical approach and it's he just continues to take action on that every day and he's never satisfied and yes we could say that about everyone right we coach thousands of agents in our ecosystem that employ that kind of quality but what i see in him he just like going from where he started with us to where he is now and he's not settled he's like okay where do we keep going and whether it's expansion of his team right whether it's investment portfolio and then sometimes i wonder you've said this before who's coaching who you know it's like i turn on the cap and i'm like listening to this guy go yeah and he just goes i love it.

I appreciate that i'm going to throw back on you real quick and give him some love this man shows up to his coaching calls and gives me every ounce of passion and every call and even in the darkest days of his personal struggles yes there was he wasn't skipping a beat so it says a lot about his character and i've appreciated everything he's brought you get the.

No one cares mindset what's yeah no one cares no one cares oh you're having a bad day no hey ladies and gentlemen now it's welcome to the stage tom ferry yeah oh sorry guys i've just had a really rough week they be like hell's going on good job coach all right so andrew as we wrap if somebody wants to reach out to you and ask a little more questions or details did we miss anything on developers we got find the deal under yield right i think is a great hack right property radar or another solution to find those opportunities find the opportunities the money is easier to find exactly but if you're just going hey london we're going to yeah right you're groveling hey i'm number one no one cares right like the developer knows that property is going to sell no matter what right if i price it right if it's attractive it's in the right right neighborhood that thing's going to pop right so any other hacks to win over the developer or builder i.

Think that's really i mean that's the main thing i mean obviously credibility and you know just showing to them that you're a good communicator and understand numbers and that you're going to provide more opportunities that you're not just going to give them this one deal but if they give you an opportunity to list or give you the opportunity to list this particular deal that you're bringing to them which they should that you're going to you know bring build a lifelong relationship with them so the thing i.

Would say having done this for a long time and helped a lot of people you know navigate all this is just it's b two b it's no longer b two c yes right like when you're business to business and you're negotiating a deal if you want to kill you have to be like how am i going to help my partner win right what matters to him or her you want to make a twenty percent margin i'm not thinking like i want a listing and i want to make this no it's like i'm going to help you make twenty percent margin and i'm going to help you to it multiple times and i've got your back i'm a great partner and that's such a different positioning for people to take because again like wherever you are in your career like do you need a deal do you need a partner or is it like hey i got.

You i got you he's the conduit it's not at all one hundred percent.

Yeah all right very cool man i really appreciate you thanks for being on.

The show thanks so much for having.

Me recommendation thank you so much all right so if they want to reach out to you what's the best way for them to to connect shoot me.

An email you can go to andrew densky dot andrew densky gmail dot com would be the best way cool andrew.

Dinsky dot com all right hey what's the insight let us know below and probably follow that guy on instagram as well all right we're out.

If you want more information about this episode including my show notes mentions links and everything else make sure you visit tomferry dot com podcast that's tomperry dot com podcast thanks again and talk to you soon.