Episode 10 | From Solar Sales To Real Estate w/ Chad Blau

Welcome to the New and Experienced Investor Podcast. I'm Alex Barnett, one of your hosts. I'm the new guy.

And I'm Joe Homs, and I've been an investor for over 40-plus years.

And I'm Chad Blau, and, uh, I'm the really new guy.

Oh, well, I was going to introduce you, but that's okay.

Yeah, go ahead, introduce him.

Today we have, um, today we have Chad Blau. He is a new investor. He joined our team recently, within the last year, I would say even less than a year. And, um, I guess let's just jump right into it. Maybe you could go over any real estate, um, how you got, how you got into real estate, what were you doing before, and if you had any experience prior to, you know, joining the team recently.

Yeah.

So kind of my background, I did get into real estate. It was, I don't know, about 10 years ago. Didn't really work out for me at the time. Didn't have a mentor, nobody to kind of show me the ropes on what to do. It was kind of, you got your license, you know, good luck, go sell a house. I I thought it was going to be easy, but it wasn't. So struggling through that for 6 months, I decided to sell mortgage at the same time, jumped into that. Long story short, 10 years of, I don't know, 5 or 6 different sales jobs. And then I met you and then realized what you were doing. And then we chatted about it and— Um, you know, I thought, hey, it seems a lot like the, the type of sales that I was doing previously. And, um, and I, I said, hey, let's give it a shot.

Awesome.

Yeah.

Where were you? Where were you? And where'd you get your license before?

Nevada.

Nevada. Okay.

Yeah.

So what areas were you working up there?

Lake Tahoe, uh, North Lake Tahoe, Incline Village. Um, so, so really, really high sales really high competitive environment, tons of agents, really condensed area. So at the time, I think it was 2012, no, 2013 or '14. You know, it wasn't like a 2021 market, right? Everybody got in 2021 as an agent. And, you know, you just list something and You're getting a deal the next day.

Yeah.

So—

And I mean, as far as— you had a broker, right, that you worked under?

Yep. I was with Coldwell. And I asked a handful of teams, hey, can I join you guys? Let me do anything. Everybody's— our team's full. We can't take it on. But I did— Go do open houses. I got really close to getting my first deal. It was going to be, I think it was like $3 million. And between the buyer and seller, the seller was psychotic, to say the least. And I think there were like $50,000 off on where they wanted to be.

Killed the deal.

Killed the deal.

Yeah. Oh, that's great.

So that crushed my dreams and I kind of said, screw this.

I mean, is that normal, Joe, as far as like brokerages, or is there a set standard you're supposed to have as far as helping somebody that's new out, or?

No, that really kind of depends on the brokerage, you know. Um, at Pelago, we try— I try to help as many agents as I can, um, with whatever it is that they're looking to do and what their needs are. But at the end of the day, and it sounds like you were doing all the right things, at the end of the day, it's, you know, you need to put yourself forward And like I said, it sounds like you were doing all the right things. You just needed to have somebody help you towards that end.

Yeah.

And I know the area you're talking about, and I know it's very competitive up there. And sometimes teams don't want to take on another partner, basically. And so that's probably why you were getting all those nos up there.

Yeah, 100%.

Yeah, yeah. And then, uh, we met through our ladies, um, and yep. I saw Chad was doing—

he was—

you were doing solar sales for this.

Yep.

And it's just— it's a lot of the same stuff. It's getting people on the phone, you know, um, finding out what their pain points are and trying to solve a problem. And, um, one thing that was interesting about solar was that once you locked up a deal, it wasn't like— it wasn't until 8 or 9 months that you would actually get paid on that or something, right? Was that like kind of a cycle or?

Yeah, I mean, it just depends. And it's kind of hard to explain, but as we were a dealer company, so we were just, we were the sales side of it for installers. So depending on the area, you know, I could put a deal in and not, I didn't know, you know, how this would go when I got into it. But it's construction, right? So pulling permits, getting plans approved, yada, yada, yada. There's a lot that goes into it.

Gotcha.

So from the day you put a deal in till the day you got paid, you know, I've gotten paid out in 2 weeks before. And then I've, I've had deals that took, you know, 8 months, 9 months, 2 years even for some. And there's a lot of pissed off clients all in between.

Yeah.

So it was, we were just at the mercy of, you know, the installers, all the installers I've used, I've used a ton. It just, I didn't, you know, whatever.

Yeah. No, and I guess it's, it kind of sets you up for possibly, you know, jumping into wholesaling, which, yeah, I was kind of like, maybe you should try, you know, wholesaling. It's, it sounds pretty similar.

And that's what I was gonna say, in case it's unclear, that's what we're talking about, is wholesaling.

Mm-hmm.

And Chad and Alex both literally sit outside my office. My office door's open and I listen to the conversations that Chad has with the prospective sellers and stuff. And, you know, I don't know, it's because he's been with you for a year, but he sounds very easy to talk to, very intelligent on what he's asking about. And he always asks all the appropriate questions. And keeps that seller on the line and, you know, keeps asking the next question, whether it's you want a cash offer, you want to do a subject-to deal, are you willing to do seller financing. And all that stuff is really learned kind of on the job. You know, it's not somebody— I mean, I can't sit you down and say, here, here's a script, which I can. Here's a script, and then you're an expert. It's, it's literally taking calls Making calls and trying to put deals together. And I can tell you, both these guys are pretty much experts in that field.

Thanks, Joe.

Yeah, you're welcome.

I'm going to use that on— well, we'll use that on our resume that's going on the website. Yeah.

Tell—

maybe you could go over because you actually got your first deal pretty quickly.

Yeah.

From when we started. But it ended up being like the deal from hell. It was one of those where it took like 4 months. To actually get paid on it, and we had to do a bunch of song and dance. So maybe you could explain kind of like that one.

Yeah, I mean, so going into it, you know, and that's the thing, you always think there's a next best thing, especially when you're in sales. You're like, well, you know, this thing is a pain in the ass, you know. And then I talked to you, I'm like, oh, that could be way easier. It's not. It's always— everything's— it's always gonna be hard. So you just, you got to understand that. And I think with that deal that you're referring to, um, you know, I, it kind of just happened. It happened pretty easily, kind of, I guess you could say a laydown in a sense. Um, but it was a complete nightmare with the title, this, that, and the other. And I thought I was like, you know what, good. Let's let the first one be, be a nightmare so I can, you know, have a shitty one at first and then move on, you know, move on from there and have some good ones. But. You just never know what you're gonna get.

What were the bad parts?

So there was a clouded title. It's a— it was a deal in Florida. It had this mobile on it that was a complete pile. And, and the renter, he wasn't paying any rent. Okay, so the guy was basically squatting there. The homeowner, he wasn't really doing much to get him out. It seems like he was kind of scared about it. But he would like, he would talk tough at the same time. I don't know. So basically, it was, we needed to get the, the person squatting there out of the property. And we also had to clear the title that was clouded. So we're trying to scramble around, we, both me and Alex have never dealt with this situation. So we're trying to call whoever we need to call to figure out the process of getting this title cleared. So then we can, you know, push it over to the end buyer. Um, so that obviously costs more money. At the end of the day, we didn't come out making an insane amount of money, but we made the deal happen.

And what was the cloud on the title?

It was a tax deed sale. And so in Florida, um, he bought it at the county steps.

Oh, okay.

So, but there wasn't any title insurance on it, so the previous owner could come and claim it if they— it was something like that.

Really?

Yes. But then there's a service called Clear to Sell That you can pay them. Um, it's like $1,500, and then a lawyer creates this certificate that says, you know, that— and then they'll take that certificate to title, and then they'll basically be able to get title insurance on it. But it takes like 3 months to maybe try and find quiet title and try and find the previous owner. And yeah, and see.

Wow.

Yeah.

That's a new one.

Yeah. And then plus it's on the mobile, so then they need the little serial numbers on there. So we had the guy, the seller, like crawling through the weeds trying to look Look for that little decal. And, you know, it was like—

You didn't, uh, you didn't ask him to wait till the tenant was out, back up his truck, hitch it to the mobile home, and then drive away and drop it off someplace at the neighbor's? You didn't ask? No, no, that's not how it works in Florida.

I mean, you'd be surprised.

Yeah, but this, this thing was like, it had like a tin roof on it that looked like it was like shanty. But for whatever reason, the guy wanted to buy it and fix it up. And so we're like, all right, so the mobile's got to stay. Just got to find these serial numbers. So we had that guy going back and forth. And of course, the seller's like, just giving us, you know, lip every time we have to talk to him.

Yeah.

Oh, yeah.

It was—

Yeah, he was trying— now I'm remembering a lot more. We kept passing the deal off because, you know, I would take all these calls and all this BS from him. You know, day in and day out. Oh, I got 10 people who want to buy. I got— no, you don't. You don't got 10 people who want to buy. Otherwise you would have sold it. So then I get just beat down and be like, Alex, take— like, you got to take this guy for a couple of days. He'd do the same thing and he'd be like—

and then he'd pass it back to me.

So we kind of had to do that to stay sane.

Okay. And then obviously we're in California and you guys are wholesaling out of state as well. As California, but out of state. So maybe talk a little bit about that process. How in the heck are you guys doing it? You know, I've been doing real estate in California 40 years. And I just can't imagine doing wholesaling out of state. You know, unless you want to, you know, put me on a plane, I'll go over there and take a look at the property. But how is that process handled? What do you do?

Well, I mean, basically, we find the certain areas that we want to wholesale in. And Alex kind of had some connections out in Florida to where he had somebody we could JV partner with.

Okay.

So basically, we're going to pull lists in those areas, and then we're going to run them through our CRM, and then let our VA just text blast and call them to set up appointments. And it doesn't matter what state you're in. Um, it's— they're all— it's just a sale, you know. You got to find someone with motivation who wants to sell their property. If they have that motivation and they have a problem that we can solve, that's all you really need, you know. You can—

So I'm more talking about logistically. It's like, okay, so you're talking to somebody in, you know, Kansas, let's say, and you get them to say, okay, yeah, I want to sell it for whatever, and you put it under contract. Logistically, how you know what do you do to get somebody over there to look at it? And then who do you try to wholesale it to?

Yeah, so we we rely on a lot of people in Facebook groups, newbies that want to maybe get started, and they'll be like, "I'll do anything," and I'll say, "Okay, well, I have a I have a property need you to go take pictures." They're like, "Perfect, I'll be over there at this time." So I have them go. And you could also, you know, hire people off of these freelance websites, Thumbtack, you know, photographers and stuff that need work. I've had handymen go in and take pictures, you know, guys that want to do like odd jobs. And then I even have them like change the locks. I've had them change the locks, take pictures, do everything at once.

Hmm.

And so it's just kind of Just putting posts. You can do a lot with the posts. I mean, there's a lot of people that are willing to do something for $100. So there's that part. And then we try to get it vacant and then put a lockbox on it because that's the easiest as far as getting buyers through there. And then finding buyers, we've just been doing the same exact thing, just text blasting people who have bought flips recently. And then they say, oh yeah, we're interested in buying. Let me know what you have. And then we'll set it up with them. And it's pretty much a done deal. Yeah, it's kind of crazy. You think about it, just never even stepping foot in some of these places and selling a property.

It still seems crazy to me. But yeah, you know, obviously you guys are successful. And so are you dealing mostly on the lower end? I mean, you're talking about mobile homes and stuff. Have you done anything, you know, California prices, you know, million and above? Have you done anything like that?

We've, we've gotten close with some, like in, in Reno, we had a couple that were up there, up close to $2 million, but nothing, nothing actually went through. So, you know, the deals we've done in California, I'd say, what, nothing more than $500,000. And I feel, you know, people who have these million-dollar-plus homes, they're usually not going to have as many problems that we can solve as those, you know, with a lower-priced home.

Yeah. Yeah. Um, so, and you met— you mentioned problem solving. That, that's, that's a big, big part of what you do, is because I've listened to him and both of you, I've listened to you talk to literally one person for 45 minutes to an hour, just kind of listening to what their problems are and then figuring out how to resolve those issues so that you get them to sign on a dotted line.

Yeah, we've been dealing with a lot of, um, Absentee owners, people that are just done, the tenants not paying, you know, just anything that goes along with tenants. Tenants are a huge headache. So we kind of focus on that. And then it does add an extra layer for us because then you're also dealing with the tenant. And so it can push out the closing for a while because we try to get it vacant or at least, you know, get it to where it will be delivered vacant so the end buyer can start fresh. But it's a really good niche to kind of go down because so many headaches involved with being a landlord.

Now, again, you're dealing throughout the U.S. Is there some sort of software program or something that you use to determine what the after-repair value is on these places?

Yeah, I mean, so there's a few. Typically use like PropStream. Or Privy. It was PropStream, right?

Yeah, PropStream.

Yeah, PropStream, Privy. I like to use those 2 and kind of compare the 2. You know, looking at the property and the surrounding neighborhood that's there. And then I'll bounce back into Zillow and stuff. And I'll kind of use all of those together to find like my best comps.

Okay. Okay. Yeah.

And also too, it's, well, I guess that's for, for the selling to the end buyer, you know, typically we'll ask our end buyers, you know, what would you buy these certain properties at? You know, and that can give you a good idea of where to gauge that. But that's, that's different.

Yeah, it's always good. We like to just work backwards sometimes, you know, if we're getting close. And we're not really sure because you're in a new town. And it could be one street is completely different. So we'll go to the end buyer and say, you know, what do you think about this property? What would you pay? And they'll say, if you can get it for here, then, you know, you're good. So then we kind of add a fee in there and then lock it up. So that way you're not locking up the property prematurely and then, you know, kind of messing with the seller's timeline or having to go back and renegotiate or anything like that. So.

Now, do you guys work with real estate agents out of state?

We have a couple times. Yeah.

Mm-hmm.

Yeah. So there was one property where this lady wanted to move. She wanted to downsize. And so, no, she wanted to sell her property and move into a bigger place, actually. So we got her property under contract and then we had to find her a place to move. So I was calling around Jacksonville, Florida, and I met another agent who was an investor, and I was able to get her funds allocated into this new property, but it wasn't enough to meet the asking price. So then he seller financed the rest to her to make the deal go through, and she was able to move into a bigger house. And then our deal was able to go through. So—

Nice.

Little things like that, you know, obviously investor-friendly agents definitely help out, but we're usually just direct to seller at this point.

Okay.

Yeah.

Got it.

Yeah. So, but yeah, it's been great working with Chad. I mean, obviously joining a team, it can help you, you know, I think go farther, you know, because there's points in this whole thing where you're trying to find distressed properties and deal with people's problems. It can get— it can kind of wear on you after a while, especially if you're not closing deals. So then, you know, joining a team or Even coming to the office and seeing everybody do stuff, it like invigorates you. So that's nice.

Now, is Chad your first success, or have you had other people come on board and be successful, or they kind of like, yeah, this is too much for me, I'll see you later?

Yeah, it's typically been a thing where I would help somebody just get started but never really partner with somebody. So it's the first partnership I've had.

So, okay.

Yeah. But it's been going well. And then we're starting to bring people, other people under us, so then we can kind of run things from the top down.

Yeah.

Yeah. So it's been pretty cool. Where do you see yourself as far as real estate investing? What gets you excited? Where do you see yourself in the future?

And I guess that's a good question because It kind of falls back to why I switched from just doing a sales job for whatever. Because all these sales, essentially, you make the sale, you get paid, that's it. So my whole goal with this is to gain the knowledge about real estate, learning how to do the deals. That way, you can buy yourself those assets that are going to pay you You know, in the future. So building portfolios, building a kick-ass team for wholesaling, and then we can, you know, sit there and help, you know, manage and keep the wheels rolling. That's kind of my goal at this moment.

Nice. And are there any particular areas you want to invest in?

Personally?

Um, not, not nothing specific, um, off the top of my head. No, I couldn't say. You know, I'll get— once we get closer to that point, then those, those decisions will be, you know, those are the things I'll start thinking about.

Nice. Yeah, and we've made like kind of a rule that we're just gonna kind of wholesale or do wraps right now, um, and then worry about like keeping stuff as the deals come in, you know, but not really focus on that because you can really get shiny object syndrome. So we're focusing on focusing.

Yes.

Shiny object syndrome. That's, that's a big one.

That's a big one. Yeah. So I mean, how can, how can people reach out to you if they want to learn more about, you know, talking to sellers or the wholesale process?

Yeah. You can you can reach me on on Facebook. It's private. I can change that. You can also reach me through Instagram. It's my name at Chad Blau B L A U. That's it. Just shoot me a DM. I love talking with people if they have questions on you know what should I do on on my calls or how do I do this or that? I love throwing things back and forth whether I'm you know, right or wrong about it. I hope, you know, you guys can take something away with that information.

Heck yeah.

Yeah.

Okay, uh, before we wrap up, make sure you guys share this podcast, um, and leave a review wherever, um, podcasts are available. This coming Monday, Joe and I will be giving a presentation at your meetup. On subject to. So if you're in the Orange County area, make sure you check that out. It's going to be at Left Coast Brewing, April 20th.

I don't know.

4th?

It's, it's this coming Monday, whatever that is.

Today's the 20th.

So, uh, 6th? Is it 24th then?

I don't know. We're bad at math.

22, 23. Yeah, 24th. April 24th. At 6 PM. It's on meetup.com. You can find it there real easy. All the information's there. Please come by and listen to us ramble on about subject-to, and we're going to talk about one of the deals that we ended up putting under contract, and we're working on getting the tenant out of there right now. So, um, yeah, that, that's a podcast in itself right there, is tenant issues.

Mm-hmm.

You know, so yeah. So please, please, please join us.

Awesome. Yes, and, uh, check out Joe's YouTube channel and my YouTube channel as well, which we will link down below. See you guys on the next one.

If you want some more advice on real estate investing, reach out to us one-on-one.