How To Build A Successful Real Estate Team In 12 Months With Léo Gutierrez

What's up, you guys? Welcome back to the New and Experienced Investor Podcast. Today we're going to be talking about building the real estate team because it's so important.

Yes, it is.

Yeah, yeah, it is. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

And I'm Joe Homs. I'm the experienced guy.

Yes, we have an amazing guest with us. He has grown a very successful team. He's flipping multiple, multiple properties per year now, plus keeping some of them. He's doing it all, basically. So if you guys want to get into real estate and build a solid, successful team around you, you are not going to want to miss this one. Uh, before we bring him on, let's just read Remind everyone about the upcoming meetup that we have.

February 24th, Hangar 24. Aaron Rosen was going to talk to us about, uh, real estate insurance. Really hot topic. Sexy. Yeah, on fire.

Yep.

Yeah, that is important though. So you guys have got a lot of good stuff. Um, always like to remind you guys that this is a This is a live podcast. Please share it far and wide. And you know, you get the most out of it when you are interacting. So jump in the chat with your questions. You have full access to our guests, to Joe, to myself. So get those real estate questions asked and answered. And it's one of the most requested parts of the show because we actually bring up your, your chat and your comments and your questions during the show.

Right, fun.

Okay, cool. Uh, before we launch into the topic of, you know, building a successful real estate team, let's talk about our 2 tips.

Go ahead.

Okay, why do you have a 7-Eleven hat today?

My friend, uh, has a merch company, and for whatever reason, he does merch for 7-Eleven and those Hawaiian sweet rolls.

Yeah.

And, um, Labeling always random. Okay, so yeah. He gave me all the 7-Eleven merch, and I I don't want to wear the shirt because I thought maybe you were gonna buy a 7-Eleven. No, that's later on. That's definitely part of the thing later on.

He gave Alex a 7-Eleven polo, but it looks like an employee uniform.

So pass that one along. But yeah, so the the tip number. One is when you're first starting out, you're going to want to go alone, but the sooner you can start building your team, the better off you're going to be. Some people you're going to want to have join your team are going to be an awesome real estate agent if you're looking for deals, that can help you find deals, a contractor, and I'd say maybe a lender.

A mentor.

And a mentor.

Oh, oh, okay. My tip, and we were kind of talking about this off camera, you, at the end of the day, you could be the nicest person in the world. You're flipping. Most of the time when I flip properties, I contact the neighbors. I let them know who I am. I let them know what's going on. If they're disturbed with anything at the site, Please get a hold of me, here's my contact information. But then you always have those individuals out there that decide, you know what, let's call the city and find out if this guy has a permit or not. Anyway, we were talking about that off camera here, but be as nice as you can, you know, it always pays off at the end of the day.

Amen to that. All right, let's go ahead and bring our guest. And today we have Leo Gutierrez of the Gutierrez Group. How are you doing, Leo?

Good. I love the eyes. Thank you. Literally been practicing all day. Yes. Yeah.

Yes. So thank you for joining us.

Yeah, pleasure being here. Thank you for having me.

Awesome. Well, um, let's go ahead and jump on into it. If you want to kind of let the audience know, um, how you got into real estate, what were you doing before, and what Yeah, interesting story.

So it, um, I was always trading real estate for about five years before I even got started. I was like looking at YouTubes. I was looking at bigger profits. I was just following it. And then COVID happened, right? Life changed for a lot of people. And when COVID happened, I decided to get my real estate license to get into real estate. I had a very very like boring experience with the previous broker. And I always wanted to have these wonderful plans. I'm like, I want to do this, I want to own this much real estate, I want to get into commercial, I want to do all this stuff. But then, um, it wasn't happening. I was doing a lot of books, a lot of studying, finding out the markets, which really helped me then. Um, and then I met Joe. Uh, Joe reached out to me a platform, BiggerPockets, I believe, or Meetup, one of the two. She was like, hey, what are you doing? And I was trying to invite him to one of my events. I was trying to teach Joe what to do, right? I said, hey, you should come to one of my meetups and do all this. And he was so nice, he was so polite. Yeah, sure, all this stuff. And then things didn't work out with my broker. We were kind of in a different direction. And that same day that my broker and I decided to kind of split ways, I called Joe. He said, yeah, let's have coffee. We went and had coffee. I told him, Joe, can I do this?

Yes.

Joe, can I do that? Yes. Joe, I really want to start like investing and flipping homes. And then he said, well, that's what I do. And I was like, this is a home for me. So that's kind of how I got started when I met I had like 15 transactions within the first 2 months or something like that, and the rest is history. Yeah.

Amazing. So how did you go from like, you know, kind of I guess zero transactions to 15 transactions that quickly? What's the steps there?

Yeah, so I think that it was just being in the right environment, right? Like the previous broker was so cautious About making mistakes, I was so cautious about like my license is on the line. I have too much liability, right? When I met with Joe, she reassured me that she said when I said, "Did I do this?" Yes. "Did I do that?" Yes. She said the two things I asked you, she'll she'll define them if it's true or not. But he said, "Don't do anything that the." And don't lie about your transactions. And I think those 2 things kind of assured me, and that is what fueled me to say, yeah, I can do it. So as long as I was ethical and I wasn't doing anything wrong, Joe was okay with it.

Yeah.

And the whole time I've known you, it's something that I know about you that you never lie.

Okay, um, but, uh, so now fast forward, you've, you've, you've flipped like, I guess, or have you picked up like 10 properties in 9 months? Um, you know, that's, that's some— that's pretty incredible. Um, like, what would you say if someone's trying to get their first deal? What are the steps that they need to take to get that?

Yeah, you know, I was gonna put out, um, TikTok this morning that was really interesting because I think that we all get in this analysis paralysis, as everyone says, but we're so cautious about not making a mistake, right? We're so cautious about not making a mistake. And like, the one thing that I— when I call Joe, when I have an issue, I simply say like, hey, I have this issue. And he said, okay. Let's do it. Let's figure it out. And there's always a solution for everything. And I think that that's kind of how, when you get into your first deal, it's just about just doing the deal, right? So it doesn't matter if it's small, it doesn't matter if it's big, but the idea is that if an opportunity comes to the table and you have an opportunity to be a subcontractor, to nail some drywall, whatever it is, is to do it. Yeah, so that would be the first step. Just do something, don't just wait for it.

Yeah, take action. I think a lot of people get stuck in the education part.

They want to just keep watching YouTube videos, maybe joining some mentorships.

I've talked to people that have spent hundreds of thousands of dollars on mentorships and they haven't even done anything.

It's like you're just addicted to going to meetups, mentorships, all that stuff.

It's all important, but it means nothing without the action.

Yes, and I'll give you my first— my second deal. Um, so my first deal, I did it, I was successful, I made $30,000 about, uh, 3 years ago. Okay, uh, on my second deal—

Sorry, what's going on?

Um, it's picking up like room sound and not the mics for some reason.

Um, one second, let me—

sorry.

Um, can you check the, uh, sound on there?

I did. It's RODECaster.

It is?

Um, no, right here.

Main stereo.

Yeah, either one.

All right, all right, sorry.

Don't step on Gabby.

Don't— I forgot you were there.

Nice.

Anywho, um, how's that?

I have to wait for the recording.

Okay, okay, we should be good now. We should be good now.

Okay.

Um, so right, so at this point now you're pretty much focusing on, uh, Orange County and the desert areas.

Yeah.

What makes those markets so attractive to you?

Yeah, so there's a couple of things that are happening. I think that I don't know enough about the market and I don't know— first disclaimer, right? This is my first full year invested, right? So I don't know enough of what's going to happen with the economy. But the one thing that I do know is that as the pricing gets more expensive and cost of living gets higher and higher, and when we have interest rates go really high, People tend to go with the lesser good, right? Or what we call in economics a substitute, right? They substitute the Coca-Cola for a Shasta. So me logically thinking is that people won't be able to afford as much, a million-dollar home, a $1.5 million home. So then they're more in tune to want to go buy something that's maybe farther away. A remote location where their salary still provides them the quality of life that they want, but now they they have this nicer property, right? So I think that I'm seeing some trends specifically with the developments that are happening with the bullet trains and you know the train to Las Vegas and stuff. We just bought a triplex in Dadit, which is right next to. Barstow, and we know that the trains are going to come through there. I always know that the military tends to be a very safe investment. So we buy in Twentynine Palms right now because as the interest rate gets higher, we know that the military is going to continue to have income. So therefore, if I buy around either hospitals or military, I'm always going to have renters or I'm always going to have people who are willing to buy.

I agree.

I agree.

Are you gonna start buying in Daggett then?

Uh, that's the first time I've ever heard of Daggett.

Well, there you go. See, dropping knowledge. You got to look at Daggett. The old bullet train's coming through.

It's actually coming through.

Yeah, yeah, finally.

It's not the one up to San Francisco. This is the one from San Bernardino to Vegas. Yes. Yeah. And it's actually being constructed.

Yeah.

Well, that's good. That's awesome.

Yeah. And then, yeah, same thing with the desert properties.

Yeah.

Let's go back a little bit quick. So you started by yourself. I remember meeting you at Starbucks and I remember seeing you like a deer in headlights. It's like, I'm sorry, but like, I know how to do everything paperwork-wise, but I don't know how to do much of anything else because this guy wouldn't let me. His old broker wouldn't let me. And I go, well, that's not the case here. You know, go wild, go, go do your things. Uh, wild meant that, um, you know, you opened up your own office and then you started hiring agents. How many agents are you, uh, employing right now?

So there's, there's a total of 7 of us.

Okay.

Seven agents, and and you're basically teaching them what you're doing. You know they do open houses. You know do any of them invest with you?

Yes.

Okay.

Yeah.

Okay. So you're kind of duplicating this stuff that I've been doing for a long time.

That's right. Yeah.

Oh, that's awesome. That's great. And then now you have your own even film crew because we're off. They're off camera. Gabby's Gabby boy. She hit that door and has not stopped talking ever since. I think that's why they call her Gabby. Yeah. But, uh, yeah, they're filming kind of on the side and they're doing that because you have a meetup coming up pretty soon.

That's right. Yeah. On the 21st.

Okay.

Yeah.

Where's that at?

Yeah. So this is going to be in Fullerton. Uh, we partnered up with the developer. Uh, the developer focuses on commercial development and some residential. Um, so it's a good match because, um, The way I looked at it, I want to partner up with individuals that will have like clients, right? So the client that I'm looking for is a client that would invest in real estate. And typically those people are going to need a developer as well. So they might not invest with me, but they might use a developer. So we're going after the same clientele. And that will be in Fullerton on the 21st. It's a very relaxed event. We'll talk about the experiences that we have in real estate and then Shortly after, I mean, the guy's a DJ. He has a full open bar. And the last time they turned on the lights and they just had fun for the rest of the night and we left early. But yeah, so it's a different vibe. And the guy has done quite a bit. He started in Canada and then now is invested in the United States.

Open bar DJ. Did you get that?

I heard DJ. Yeah. Okay. We need to step our meetups up.

Wow.

Yeah. That's really nice.

Yeah.

Yeah.

All right.

I'll be there. Fine.

Okay.

Yes.

Fine. You got me.

Yeah.

Um, so, uh, when it comes to, you know, your team, it, it's, it sounds like it's residential based plus, um, investing as well. Um, who are like sort of the key players when someone's building out a team?

Yeah, that's a good question. I think that the, um, You first have to determine what kind of individual you are, right? So you're either a manager or you're a leader, right? So first identify who you are and then find out what that first counterpart is going to be. So I can tell you I am a terrible manager. I suck when it comes to processes. I don't put implement processes in place. I'm not very good at that. But I can do the vision, I can do the negotiations, I can get ourselves out of the mud, right? So for me, the first logical individual to be a part of a team is someone who does great management, right? Processes in place, is great with organization. And so for me, that's the first part that would be. So if you're the manager, then find the leader, the person that's going to go drive Get the stuff, you know, negotiate, and then you can be the management of that. So that's the first counterpart I would say that needs to happen. I think secondly is replacing yourself from either the listing side or the buying side. All right. So because I mean, we all know the industry, right? We know that the number, the sweet spot for a real estate agent to be is 10 transactions. After 10 transactions, You should know what you're doing. If you don't, maybe, yeah, you should reconsider, right? But 10 transactions, you should really know kind of how to handle the whole transaction. So therefore you can replace yourself on the buying side or the selling side, and you start to teach them what you know on the last 10 transactions. And then vice versa, then replace yourself on the other side. And I think that those are the first key players that need to be added to the team.

Yeah. So where do you go from, you know, you've hired your team, you're up to 7, you said right now? 7, you said right now. When you have new team members coming in, do you start them off with, you know, here's how to write an offer, here's how to look for properties, and then graduate them to investing with you? Is that the process?

Yeah, so we actually talked about this on the team. The first thing that we started to implement is having Monday morning meetings for 2 hours. Okay, during that meeting, we talk about what's happening. But the second half of the meeting is specifically training. And most importantly, it's sales, right? So we all know that if you can't sell, then It's a tough industry for you. So the first thing is understanding the basic process of selling and understanding how to communicate with individuals. So it starts with that meeting. And then from that meeting, we— what I prefer is to put them boots on the ground. So you have to get yourself open houses. You have to get boots on the ground and start knocking or passing out flyers. That's step number one. I think that once you get the feeling, you know, the reason people don't invest in real estate is because they're afraid, right? I remember my first deal. It was a $105,000 check that you have to wire to escrow to close the deal. That night before, me and my partner, and I did it with a partner the very first time, we were so deathly afraid to send that check in, right? Mm-hmm. We were hoping that we were going to make our money back, right? It's the same thing when when somebody wants to be a real estate agent or even get into the into the investing side. You have to knock on that door. You have to call other agents and say, "Is it okay if I do your open house for you?" That first step is just the beginning to actually driving success. But if you don't take that step, then it's a tough business. So I start with the most basic item is that, can you pass out these flyers? Can you knock on the door and tell them these are the recently sold houses on the market? And then we start from there. Once you know that feeling, that afraid feeling of wiring $105,000 to your first deal and you get past it, I think the rest, we can overcome those little issues. Yeah.

So then when you send that million-dollar check to close that transaction, it's just Literally, it's just, you know, this is just the process. It's, you're not really kind of paying attention that, okay, it's $1 million. Yeah, it's $1 million. But it's still, it's the same process. It's a cookie cutter process.

Yes.

Yeah. Once, once you learn how to do that, and you feel comfortable, and yes, I agree, the first one's the hardest one. The first one is the one where most flippers overbuild. You know, they put in stuff that They would like to see if they moved in. Yeah, it's first-time flipper mistake. And then you, you know, you have to start looking at the numbers and you get over that stuff. And I'm so glad to hear that you have training sessions every Monday. I think people learn from each other as well. You know, and I hope that they're open and they say, you know, I did an open house this weekend and some weird person came in or whatever, and this is how I handled the situation, then everybody learns from, from that. So yeah, that's good. That's awesome.

Yeah, I think also one of the things that we learned, Joe, in the process is that, um, agents really quickly find out whether they're cut out to be in the space. So if you do the open houses and you realize Oh, I have to follow up with these people to put their name on the sheet, right? And they're tired. They don't want to do that. Or man, I love talking about real estate. I love talking about numbers. Then maybe the investment side is better for you, right? Like that's you start to learn that. So the sooner that we dive into that stuff, the sooner then we know what direction we want to take. So we have people on our team. Stephanie's here, and I can tell you Stephanie. Prefers the investing side above the sales any day, right? Because she loves how that process works. And in her case, she loves the listing. Like, she'll do the listing, do the paperwork, do the processes, all that stuff. It's great. But the selling, maybe not so much. She doesn't want to go out there and show properties. So we learned a lot from just taking those initial steps and saying, I don't want to knock on doors. I don't want to do all this. I'd rather help out on the flipping, managing the process, and then I'm on that side.

After, after the NAR lawsuit, um, last year, how has that affected you and your team? Positive, negative? Has, has anything changed?

No, nothing's changed. Yeah, I think that it just— but we talked about that process, Joe, about a year before that happened. So we, we were adamant that we didn't want to take down clients that didn't want to work with us.

Yeah.

So, so that by far has been known. I just saw the reports last, uh, 2 weeks ago. Uh, there has been no change in the buying side from an agent.

Correct.

And from the listing side. Correct. Yeah.

I think the only thing that's changed for me and all the rest of the Pelago agents is I insist that they put buyers under contracts. Nardes, and they should have been doing that way before then. Like you said, if you don't want to work with me, you don't want to fill out this contract and be loyal with me, then please go someplace else and waste somebody else's time because I just don't have time, you know, to do that. So that's the only nice thing that I saw about the lawsuit. But, um, you know, if you were a savvy agent, you should have been doing that way before then.

And you know, that helped us out a lot. I'll tell you why. I talked about the 17 transactions I did really early on with you, right? I remember getting the text messages or the calls from the services that we were registered to, right? That they would send us the leads. And I would be like, I would get the lead, I would claim the lead, I would text them, I would call them. I'll see you at the property. I'll be there in 2 hours. I was driving around like all over the place. I was taking on these leads like crazy, right? And then all of a sudden I was like a month or 2 down the line, I'm like, man, I have like 50 people that are potentially my clients. I'm running around like crazy, but like it didn't feel like I was progressing. It was just like I was moving my car around and just spending time. Now the lawsuit did us a flavor, right? Now we're like, you want to be my client? Let's sit down. This is the ordinance. Let me tell you how I work. Let me show you how we represent you. We have, you know, discovery sessions with every buyer. They come to the office. We have a discovery session. We go over all the stuff that they want. We do the financial— what they have as far as— I forgot the form, but what they have as far as financials. We go over what they want in the property, and then we go over the buyer representation agreement that gets signed right there and then, and then we take them as clients. So it just actually made it a lot better for us because we're not wasting our time.

Yeah, I agree, I agree. And I heard another statistic, and I don't know, I mean, if this is true or not, but I heard that 80% of licensed real estate agents have done zero transactions last year. And only 20% actually did anything. And I don't think that that's unusual. You know, I think the go-getters like you and your team are the ones that are out there doing deals and the rest are kind of just sitting at home doing nothing. Yeah.

Those are the people where when you, you're talking to the seller and they're like, well, my sister has like an agent friend who, you know, and you're like, oh God.

And they're in San Francisco.

Yeah.

But the property you want is here in Orange County. Yeah.

You think, let me call them Yeah. Okay, that's fine.

Or on one of our listings, I got approached by an attorney with his license who was asking me to show his client the property and do all the work, basically.

Oh yeah.

But he wanted the commission just because of his license.

He's like, yeah, I'll give you like $500. How about no?

Yeah, when I first started, attorneys, once they got their law degree, they used to get an automatic Uh, real estate broker's license.

Wow.

What?

Yes, that's how it was.

Wow.

That changed about, I want to say, 10 years ago, uh, because they finally started to figure out that, yeah, they may be attorneys, but yeah, they don't know anything about real estate, especially being a broker and stuff. So they did change that, and they make them go through the process now of getting You know, salesperson license and then eventually a broker's license. Yeah, there's just totally 2 different things.

Yeah.

You know, I don't know what they were thinking at the time, but again, we live in California, so who knows what these people are thinking.

Yeah. But you have your law degree in real estate too now, by now, right?

Yeah.

Yeah.

I don't know. Do they have a law degree for real estate?

I don't know.

Yeah, they just gave that to you, didn't they?

Yeah, it's an honorary degree because I'm so old.

Yeah.

Dr. Homs.

Just give Joe a non-iterary degree.

Dr. Homs.

You know? Yeah. Yeah.

You know, it's so interesting how, um, when you're in real estate, and, and I'm not talking about the, the people that, that, that do one transaction a year, as you're saying, but when you're in real estate and you're, you're talking to these people on a regular basis, right? And I mean the potential sellers, right? We learned so much through the process. I have had every kind of scenario you can think of along the way. You know, obviously the team helps out a lot. I just tell them, hey, can you research this? They learn from that. We're all learning, right? But there's so many times I've called you and I'm like, Joe, so this is happening. Okay, so do this. Yeah, yeah, yeah. Everyone knows this, right? Just like, but just do this.

Yeah.

Okay.

Yeah, but see, you used to call me a lot and ask me those type of questions, but now you, you have Stephanie calling me.

Yeah.

You figure let's, let's soften the call, you know. Joe, I'm calling about this. I go, are you calling for your boss? Yeah. Okay. Give it to me. Let's go.

Yeah.

Yeah.

Alex, you know, with the 40-plus years I've been doing this is, you know, there's a workaround for pretty much everything, you know. And like you said early on, I'm not too concerned about, you know, people as long as they're ethical, as long as they're honest, they're not going to get themselves in any problems whatsoever. And I can tell you, Uh, from facts and situations that there are people out there that just want to complain and they'll complain. And then I have to go through an investigation with the DRE. Um, you know, one a few years ago was, um, before, before the law, the lawsuit last year, one of the agents put a buyer under a contract. He put an offer in, it wasn't accepted. They went cold on him. And then he finds out, I don't know how he found out, that they actually bought another property. And so he confronted them and said, I have you under contract, you owe me a commission. And they said no. And they went as far as to turn him into the DRE. And oh well, the DRE sends out an investigation. And we sent them all the paperwork back and said, here it is. And then I told him at the end of the day, I said he was exonerated, as he should have been. I told him at the end of the day, what do you want to do now? And he says, I don't want to do anything. I go, you could sue them in small claims court. This is a contract. You can go sue them. He goes, nah, I don't want to do it. I kind of felt that if it were me, I would have probably gone to small claims court, especially after they took it to that extent. You know, because we tried to negotiate with them and get some money for him, but they wanted nothing to do with it.

So anyways, yeah, Joe's seen everything, so that helps us.

Yeah, yeah, he's our— we're Alex and I, we're always saying when we first started flipping, we're like, if Joe's not freaking out, we're not freaking out, because we were freaking out about everything.

Yeah, yeah, he's like, that's fine. Oh, okay, good.

And I feel that in this industry, if you don't feel uncomfortable, then you're really not learning. So like, we've come across some situations where I'm like, hey, Joe, I have this going on. She's like, oh, that's a great question. So then we look for some options, but Joe knows exactly where to go, right? That's the benefit. So that, well, it's not going to happen with escrow, it's not going to be with title, it's going to be with this, and let's deal with that. I mean, I have, I have 3 or 4 transactions right now that I'm figuring out solutions for that, that we're having issues. But I think that's, that's a good thing, right? As long as I have problems, I can learn. If I don't have problems, then I'm probably just sitting at home not doing much.

Yeah, I don't think if you're a real estate agent and you're in a transaction If you don't have issues coming up during that transaction, you know, count your blessings. Because I don't care if it's a— everybody's agreeing in the transaction, there's still issues that come up, you know, without a doubt. I had an issue recently. I put a buyer under contract in Northern California, which I don't normally do, but I did. And then I get a call from the escrow title company that normally the city transfer fee is shared 50/50, but you have in your contract that the seller is going to pay for it. So we're going to send you an addendum to change that. Yeah, I'm, I'm laughing like that too. I'm going, in your dreams you're going to send it to me. This is a contract that was fully executed. Everybody knew they were all adults here. And, uh, yeah, they went to the extra step as to send my client an estimated closing statement. And guess what was in there?

Wow.

Yes. And so my client sent it to me and goes, hey, what about this? And while you're at it, could you look at everything else? And I looked at that and I just like, I emailed the escrow and I said, you know, you need to change this because that's wrong. And they did, they changed it. But, uh, yeah. You have to be careful because— and this is a very smooth transaction. Northern California, they do things a lot differently than we do down here. They have all their inspections done pre-sale. So home inspection, termite, anything that you need is there and it's disclosed on a website.

Yeah.

So really, the buyers looked at all that. They're walking in, they're putting an offer, You know, what else are you going to do? Yeah, you know, you're just waiting for the appraisal to get done and, and that's it. And then once that's done, then if you wanted to do another inspection, you could. But, you know, why? You already have one there, you know. So Northern California transaction seems to be a lot easier and smoother because of that reason. You know, we might think about adopting that down here, but we do things, uh, actually the opposite. We wait till we get an offer and then we start doing the inspections and stuff, you know, which sometimes that's when the issues start coming up, right? Yeah. Oh yeah.

And I think that that's also part of the team process, right? Like, you have your go-to escrow, title, um, and other people use— I mean, I have them down all the way to my notary and, you know, the inspector that I use, um, the majority of the time. I think that that's also important. There's so many transactions where I've Told my— I sent an email out right before the transaction. And I said, this is our preferred— this is the preferred notary the client's going to use. And we specify why we want to make sure that the client feels comfortable, they're in control. And we send it out. And there's so many escrow companies that say, sorry, we don't accept that notary because we only use our notary. I said, what? So, and again, it's about knowing, having the knowledge, right? Then my question is that, okay, can you, can you explain to me the difference? Well, ours is licensed and bonded, and it's approved by this title company. Okay, so if the notary I provide you has all 3, we can use them? Well, no, I don't.

Mm-hmm.

But it's a buyer's choice, right? And I think that that's really important to people to know. make that part of the team. We have a list of team members that we use, and I call them my team member because they have been able to drive on a particular day and sign 3 different contracts for us. And they go around, they bring all the documents back, they take them to escrow, and our client kind of feels comfortable because, you know, just using our team to do the entire transaction as well.

Good, great idea.

Yeah, that is a great idea. Mm-hmm. Hmm. I'm gonna have to use some of this.

Thanks for that.

Um, let's go to like your flips and your properties in the desert really quick.

Yeah.

Um, so how, uh, like financially, I guess, or how did you get the finance to grow your portfolio that, that rapidly?

So I put some, um, $100 bills underneath the ground and then they There was a tree.

Water.

Yeah, you watered it over time. Yeah. No, actually, it's interesting. When you first start, nobody wants to lend you money. Like no one, right? And it's interesting because in my case, I started to put my own money on the deal. The first one was our own money that we used. And then I— I started to look at partnerships, right? And, uh, it was just really interesting. My very first transaction ever in real estate, um, and I won't plan to talk about his name more, but in my first transaction ever in real estate, I sold in Ladera Ranch. Um, and, uh, the, the, the dad of the girl who was buying the property shows up on the very last day on our VP, our final walkthrough. And he shows up and he looks around and he's like, we need to redo that. We need to redo that. We need to redo this. And I'll get the contractors ready to do this as soon as we close. And I was like, okay, that was interesting, right? So we closed the deal and then a year and a half later, 2 years later, the same person calls me up and says, hey, I want to buy a house for my mom. We want them to move close to us in La Habra. Sorry, in Brea. We want them to move to Brea. And then so we do the whole thing. We're ready to close the transaction. And here comes the spouse, the VP. He comes in and he says, yeah, we probably need to do this, do this, do this. And so I pulled him aside and I said, hey, listen, I'm thinking about getting into real estate and then started flipping homes and stuff like that. Oh, that's a great idea. I think you should. I said, would you ever be interested in this? Well, I'm glad you asked. He said, yeah, let's do it. So it was just sitting around the entire time, right? My first deal was very unique in the sense that I let him buy the property. It was a cash purchase in the desert, and then I was responsible for all the renovations. I paid for all the renovations. How I did that, very interesting. It was a lot through Making sure that I had some money saved for my sales, some on credit card, you know, some of my accounts from Home Depot account. And I was able to get through that transaction on my first one. But he has actually been my partner this whole entire time, right? So I bring the property to the table. He looks at it. He says, yep, that looks good. Let's just do it. And rarely does he ever say, no, let's not do it. So it's, it's one of the things that he is the guy now that— and again, I talk about watering the plants, right? It was me putting in the work and establishing the relationship as a really good agent, getting them some good deals when they first bought those 2 properties. We actually were going to buy— so on Ladera Ranch, there's a hill, right? I think it's called Covenant Hill. I can't remember. And there's like 17 homes on the top of that hill. only 17 homes. And so she wanted to buy one of the houses there. It's called, uh, she's— I can't remember the name, uh, but there's a developer that developed all the houses there. She wanted to buy one of the houses there, and we were outbid, and we weren't going to pay more than that. And the ranch is interesting because it has double, um, HOAs, and they're really high and stuff. But so all this, me walking through with them, showing them those properties, working with them, Not being pushy, making sure that I did the numbers right, did the calculations. And the reason he didn't buy it is because I ran comps and numbers and told him that that would not make sense, even though they wanted to sell for that particular price and he could afford to buy that house. I just told him that at the price that he was making, that would not be the right investment for him. And so me watering those plants for the year and a half allowed him to build confidence to work with me. So now the way money comes in is a little different. Now I have people that want to work with me right now. People are watching what we're doing. For example, last night somebody reached out to me, said, "Hey, I have $100,000. Let me know when you need it." Right? Two of the flips that I recently did were from two different investors that they wanted to put their money to work. About three weeks ago, I had a lady. lender, hard money lender that I used for my hard money loans. She said, hey, me and my husband have some money aside. We have about $200,000. Let me know when you want to use it. So it's kind of just coming full circle now. And people are like, hey, if I see your deals are coming through, we want to be a part of them, right? And yeah, and so yeah, that's how I've made my money now.

That's great. Then you have the problem where you have more money than deals and you're out there like looking for deals.

Yeah, so exactly. So exactly. It's now about finding a third money, right? Because look, we all get the emails and text messages from the wholesalers, right? And we all know who they are. They come out and they're like, ah, and look here, the 3 comps, even though they're 10 months old, right? These are the comps. And so the deals are coming through in that sense, right? But there's nothing that actually having a deal on the table that makes sense because we know just because I have the money available, we know that that money is expensive, right? It can become expensive if we let it run for too long. So it's about also finding the right deal, even though, you know, we can make $80,000 on that. It can go by really quick if we buy in the wrong area. If the days on market starts to stretch out, things like that. So yeah, finding the right deals, it's Probably the toughest one.

Yeah.

Yeah.

We're all there with you.

Amen to that. We're all there with you. Yeah. Except big time, big time as deals just handed to me.

I know it is.

Takes a little while though. It's all right. We'll get there. If you had to start over today with no properties, what would you do differently?

Wow. That's a good question. I think that we're moving in the direction of buying and hold.

Right.

I have heard— so I have a wholesaler that we bought 3 deals, maybe 4 deals from him. Yeah, about 4 deals from him. She does a really good job. He's an independent guy, used to own a big franchise wholesaling business. And then now he is off on his own. So he really vets the deals out a lot better. So he, he brought— he brings me these deals, and now he's to the point where he's like, hey, Leo, can you run the numbers on this? I'm like, well, you're the wholesaler, you should be doing it. How can you not know what I'm gonna make? And then so he's, he's basically reached out to me and said, hey, I want to start putting my money on deals that I can buy and hold. Because as a wholesaler, he's been in the industry for 17 years. He said, "I've missed out on so many properties that I have flipped, and I look at them now. I had to just be really well off." Right? So he's noticing that like buying and hold is really the way that she should have gone from the first place. Or the way I like to see it is maybe flip two, buy one, and hold it. Right? Flip two and buy the one because. You need the money to pay your bills and to do the investment or whatever you're doing. But buying that one, that one's going to be a long-term process. And I think over time, we might not notice it today, but over time, that one will be way better off than that $40,000 profit per deal that is made. So yeah, so now if I were to start all over again, I'd probably calculate my numbers based on buy and hold. You know, the last 3 deals that that are on the table right now, 2 in 29 Palms, one in Echo Valley. I ran the numbers as if I was going to buy and hold, and one of them specifically into a co-living space, which is I turned the 2-bedroom, 2-bath into a 4-2, and I did it with the purpose of if for some reason the market doesn't adjust or adjust negatively with the higher interest rate. Then I'll— I know that the mortgage will pay for it so I can refinance out of it, hold on to them, and then either sell them at a later time or, you know, as we BRRRR, you know, over time. Yeah.

And again, same, same, uh, lines along that question, and I get this question a lot, um, is your real estate license a positive or a negative?

Oh yeah, great question. I, I would say it's, it's, um, For us, it's a benefit. It's a true benefit. And here's the reason why, right? I did an interesting deal. Stephanie and I actually did an interesting deal last year. And that deal, we got it under contract as a wholesale, right? And we could easily turn around and sell it to another wholesaler. But we decided is to sell it to a traditional buyer. Right? So we've all done that, and that's actually— that's the best way to do it. Recently, we sold 2 properties before we listed them. And so as a licensed agent, we're able to go and market the property, and we have a list of our buyers potentially, and we can sell these properties before we even go to market. So now I'm also switching my gears into that I have buyers. And none of the properties are panning out for them. So now I'm looking for a deal that I can flip to my buyers, and I let them know ahead of time, if you can't find what you want, I might bring you some wholesale deals that have been sent to me, and then we'll do the investment. We'll put the $60,000, $80,000 into it. We'll make $20,000 to $30,000 on the deal, and then you buy it if you're okay with that. And they're completely okay with it. So having the license It's just another way to be creative in the deals as long as we are fully disclosing what we're doing to them. Yeah. So I see that as a benefit.

Good.

Yeah.

Good.

Right answer.

Um, all right.

So we're gonna, we're gonna go to the part of the show where, uh, we have a couple videos for you.

Yeah.

And, uh, want to get your reaction really quick here. Let me know what you think. What do we got, producer?

First video is how to build a powerful real estate team.

How do you structure your team so that you can do more? Look at all of the different jobs in the sales business and break them down into 2 categories: dollar productive and non-dollar productive. Something like taking photographs of a property, that is not a job which is going to bring business in, but it's a job that needs to be done. Done to process the business. So that would be considered a non-dollar productive activity. When you hire your first person on your team, you want to be delegating a lot of the non-dollar productive activities over them so that you as the agent can leverage your relationships, leverage your skill as a salesperson to be doing more of the dollar productive activities. How do you structure—

Okay, we're back.

Dollar productive and non-dollar productive.

Something like my buttons aren't working today.

All right.

Okay.

Anywho, what do you think about that?

Yeah, I think that, yeah, I think that's interesting. I think that Kavya is also finding out What you're good at, right? Just because there's no dollar value attached does not mean that I should be— or sorry, just because there's a dollar value attached doesn't mean that I should be doing it. Yeah, meaning that, for example, if I do an activity which doesn't generate or that generates high dollar value, but I'm terrible at it, I probably shouldn't be doing it, right? So give it to someone that is more efficient. You know, for example, cold calling, right? There's an art to cold calling. You know, there's a ask the question and pause. I always tell the team, oftentimes when you call somebody, you're like, "Hi, I'm calling about your property in one two three Banana Street, and this is what I'm doing." Da da da da da da da da da da da da da da da da. And they don't ever have an opportunity. We don't make calls like that. The way we make calls and say, hey, John, what is John going to do? Respond, right?

Mm-hmm.

Once John responds, we say, hey, I'm just giving you a call. And then we start the conversation. We want to be human-like. So there are people who catch that and they know how to speak to someone. And that's a dollar-generating activity. Right? But it doesn't mean that if I'm terrible at sales, I probably should not be doing it. So I think that's the caveat.

Okay.

Yeah. Play to your strengths at the same time.

Exactly.

Okay.

Gotcha. What do we got next?

Buying in the desert. Here we go.

Oh, land in the middle of the desert. No, no roads, no nothing.

What value does that have to you?

Computer's not working.

I don't buy a lot of that.

I have done a lot of those.

I don't buy those anymore. You know, you gotta work hard to sell those parcels. Like, they're great for four-wheelers and blowing up stuff and shooting guns and parking your RV, but, you know, it's easier to do like more, uh, in-demand land, like, you know, stuff that people want.

Land in the middle of the desert?

No.

Well, I— yeah, and I picked that one because I know you were buying land in the desert.

Yeah.

How's that going?

Yeah, so it's relative, I feel. I think it's very relative. So the way that I would, I would look at that that particular comment is that, um, I truly believe there's a buyer for every type of property we have. That's the reason we have this available, right? So, uh, as I said, the, the reason I go to the desert is because now our desert, at least in Southern California, has become an adventure. You know, we have Johnson Valley, which they have— I forget what they have. It's The one year, once a year everyone gets together and they'll go off-roading and go up the mountains and all that stuff, right? We bought a cabin for $50,000 about 2 years ago, right? And we're just preparing to release that cabin. That market, I think it's going to get even better over time because now Johnson Valley is developing a hotel in the area just to accommodate for the, high number of individuals that go out there and spend the weekend for that specific event. So I think about being strategic in the areas that you invest in. And as I said, there's a military base in Twentynine Palms. You know, there's Joshua Tree. You know, there's Old Town Yucca Valley. You know, I forgot what they call it. There's a name for it. I forgot what they call it. But if you go there on the weekends, there's literally Lines of people, hipsters trying to get into the bars and trying to get into the places. So I think that you have to be strategic. You know, why did Disneyland invest in the desert?

Right?

Because there's an opportunity.

When's that getting built?

It's already. I think they're already selling homes. Oh, are they? I believe so.

Yeah, I heard they were out there.

Yeah, I think I think they're already selling.

Nice.

All right.

So yeah, so I do believe that the desert is an opportunity.

Joe and I are afraid of the desert.

Yes.

We got burned once.

I'll send you, I'll send you whatever we get.

Well, you know, here's an interesting thing that happened. So there's a, there's somebody I did a deal with. Okay. This is just coming out of the hospital, right? I was, I think I made the deal when I was, before I went to the hospital and they started to do the renovations when I was in the hospital. By the time I was out, the renovations were done. And, um, This particular company only buys land. That's all they buy. And the reason they buy land is there's so much money to be made on the interest.

Mm-hmm.

That, that's where the play is, right? So there's, there's a, there's a network in Riverside where they actually suggest that you should buy the land that has a mobile home. Um, buy it. When you sell the mobile home, you basically Clear, or you made some money off of it, and then you lease the land out to them. Right? Another way that I have seen is on the mobile home sales is you know you can sell the notes. So I never thought about this. This is really interesting in the desert. People don't have the money sometimes in the desert to basically come up with the down payment or pay for the mortgage themselves, so they don't go traditional lenders. But what this individual was telling me is that. You basically buy the home in the desert, right? They know they can't afford it, so you bake it into their monthly payment, the down payment, and you finance the house out to them. Well, I don't know about everyone else, but I don't have that kind of money to just go out and do all that kind of stuff, right? So what he said, oh no, you don't have to. Just have them put some kind of down payment in it, whatever it is. As soon as you close, You turn around and sell the notes to investors that want to hold the notes. And I was like, that's awesome. I said, well, why would they buy it? He said, you don't sell the note based on the number you sold it for. So for example, if I buy the house for $50,000, I put $20,000 into it, right? I'm at $70,000 all in. The note is not worth $70,000. The note is worth about twice as much. So you can sell the note, turn around and sell the note the very next day for $100,000. And the investor is banking in, I'm making $50,000 on that note.

Mm-hmm.

Right. And so when they structured it that way, I was like, okay, now it makes sense. And in the desert, it's very likely that people kind of abandon their place. And the investors are okay with that because they now resell that note. And that note is not worth $150,000, it's worth $200,000 now because the guys left and I didn't sell that note or that property to someone else.

It's kind of like a timeshare.

Yeah, the old tweaker timeshare. Nice.

Yeah, cool.

All right, let's go to our last video really quick.

Alrighty, this one is Flipping Homes with Amazon.

Oh, Meg and I flip a lot of houses.

We even build some houses, right?

We're in the duplex that we just built and there's All kinds of stuff that goes into these houses.

And Meg, where are we getting a lot of this stuff?

Most of this stuff is from Amazon.

Amazon.

Amazon is an awesome tool. It's a way to, to find a lot of different products, and it's very reasonably priced.

So this faucet?

Amazon.

What about this appliance?

All Amazon.

GE appliance?

You can get anything from Amazon.

Stove?

Yep.

Amazon.

The hardware, the hinges, the doorknobs, all of that stuff comes Everything comes from Amazon. Everything.

Meg and I flip a lot of houses. Producer, where do you get all our stuff?

Amazon.

Yeah.

Not the appliances though. Home Depot has way better deals on the appliances.

They do. Yeah.

Yeah.

Where do you get all your stuff?

Uh, I would say primarily from Amazon.

Okay.

Yeah. So a good resource for us has been Habitat for Humanity, the ReStore locations. There's—

Oh yeah, I know about those.

Yeah. There's only a few of them that actually have a good amount of stuff. Like the one in Anaheim tends to be the best for tile. and other stuff that you have. So, um, I, I have to be careful what I buy from Amazon as far as quality is concerned. I found sometimes we bought some stuff, we're like, this is a toy, this would be gone in a couple of days.

Yeah.

But yeah, but it's easy to take, you know, send it back, right? So easy. Yeah. Yeah. Yeah. So I would say Amazon 100% of the way, just do your research, find out the quality of the items and yeah, we, we, We just pushed, push, uh, for the finishes. We just did an Amazon order today and it was just, you know.

And when you're flipping your properties and you've, you know, you're up to 10, 15, whatever you're at, it's pretty much cookie cutter. You, you are, you're ordering pretty much the same things every time. Right. So, you know, that, you know, these door pulls that you're buying, that's, you've used them like 6 times already. So you know what you're getting.

Yeah, exactly.

That's good.

Yeah, yeah, we tried to put a flair now on some of our flips, you know, like put an accent wall or do something, or maybe change out the, uh, the color, you know, of the pulls. But it's pretty much standardized. Is that we're gonna go with gold, you know, brushed nickel, or black, you know?

Yeah, we bought some faucets one time at our Joshua Tree house and everything was already like A mess over there. And then we bought these faucets. Every single one was like leaking through the thing.

And I have since bought faucets again from Amazon. So I'm convinced that was 100% contractor error.

That would make more sense.

There we go.

Yeah.

That was not a good contractor.

But yeah, I do have a price point like with faucets and stuff that, you know, if we're above a certain price point, I definitely go to Home Depot because it's just You can tell the quality on some things. So yeah. Yeah.

Awesome.

Yeah.

Very cool. We have anybody checking in or?

Oh yeah.

Okay, nice.

Oh yeah. Here we go. We got— bear with me one second here. Where did my mouse go? There we go. We got Liz in the chat. She says, hi everyone, how is everyone doing?

Hey Liz. Doing well. Doing really good.

Okay. We got Coach Steph. Most of these stories have the same pivotal point. Then I met Joe.

There you go.

Yeah, I love it.

Yeah, that should be your memoir.

Yes.

Yeah.

Then I met Joe.

Then I met Joe. Or on my tombstone.

Oh God.

One of the two.

All right.

Yeah.

Chad says, can I get a boom in the chat?

Nice. All right.

Thanks, Chad.

We got a couple from Stephanie here. Leo, how many properties do you plan to flip in 2025?

Hmm, that's a tough one. I think the market is really interesting. I'm trying to be careful about what we're doing this year. But I think that we can hit 30 properties if we're careful. I think that most of them will happen in the tail end though. I want to, I want to do that on the tail end. end. I don't want to do it up front. I want to go through the cycle of the summer and just see kind of what happens. But maybe 5 between now and the next 3 months, and then we'll see about that later.

All right.

Can you say that 30, 30 number one more time?

30?

Like 30 properties. You're gonna flip 30 properties?

Oh yeah, yeah, yeah.

Oh, there you go.

I see.

I love it.

It was a setup. Yeah, no, you shouldn't be worried. No, Trump's gonna fix it all, so you're fine. So everything's gonna be good.

Anyway, we got one more.

Oh, okay, sorry.

Joe, any new advice you would give to Leo?

No, and it's really not for Leo. I think it's for everybody that, you know, here's a perfect example of somebody that actually listened. It's like, I meet with a lot of people and I see them, you know, for an hour or so, coffee, lunch, um, at the office, whatever. And then I don't see them anymore, you know? And it's like, I don't know, was it something I said or just, you know, they didn't like, or—

That was the coffee, bad coffee.

Could have been bad. We go to Starbucks, so I can't be that bad, you know? Um, I, I think it's— I think if you really, really, really want to do Flipping or anything in life, you really kind of have to put your heart into it. And I can see that that's what he's done. He's you know not the only one that you know has come to me and I've mentored over the years. But I I know the ones right away that you know decide that they want to do something; they follow up.

You know, get into that.

Yeah.

So congratulations.

Congratulations.

Made Joe proud.

Thank you so much for being here. This is awesome. Yeah, if people want to reach out to you with, if they have properties to sell or if they want to buy or partner with you, what's the best way?

Well, I'm looking for deals.

Okay.

Definitely looking for the deals. But yeah, it would be the Gutierrez Group on all social platforms.

All right.

And then stay tuned. We have, we're working on a a project, the Anti-Rent Crew. That should be fun. We're trying to implement that. We've been babying that for a while, but I think that we're almost ready to do that. Awesome.

Yeah, be looking forward to it. Thank you guys for joining us. Make sure to share this far and wide, and we will be back next Thursday.

Next Thursday. Yeah, same time.

Yeah, same time. We'll see you guys then. Thank you guys so much.

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