Transformation: Witness How a House Flip Transformed Chad Blau's Life

What's up, you guys? Welcome back to the podcast. We are officially in season 3.

Wow.

We did it.

We made 3 seasons without getting canceled.

Wow.

Yeah. Well, I guess 2 seasons. This is the 3rd season.

This is the start of the 3rd.

That's right. We got picked up for another season. Thank you guys so much. It's all because of your viewership. We are the number 1 live podcast in Laguna Hills. The New and Experienced Investor Podcast. And really, we're a real estate podcast that brings investors from all walks of life together. Isn't that cute?

And who are you?

I'm one of the hosts. I'm Alex Barnett.

And my name is Joe Homs, and I'm the experienced guy.

That's right.

You must be the new guy.

I might be the new guy.

Okay.

Yeah, I was thinking about that because, like, compared to you, I'll always be the new guy. even if I have 20 years experience.

True.

The newer guy.

Yeah.

Yeah, so we'll work it out.

So we're titled correctly.

Yeah.

Yeah, I mean, you can have 20 years experience and still be the new guy.

That's right. You always gotta have the beginner's mindset.

Yeah.

Always be willing to learn. And that's what we're gonna—

What happens then when I start drooling or something? Am I the old drooling experienced guy?

You'll be the experienced— yeah, you'll be the experienced guy. By then we'll have AI graphics that'll like make you look like Tom Cruise.

I don't already look—

No, you do, but I'm saying like how he looks in like Mission Impossible.

I do my own stunts as well.

Exactly. Yeah, I knew that, so that's why I mentioned that.

You'll have that computer.

Yeah, yeah, Hopkins.

That's right, you'll be good.

Okay.

Um, but yeah, so just piggybacking off of the beginner's mindset and all that stuff, we have someone in here today. We have an amazing guest. You're going to want to stick around all the way till the end because we got Tips and tricks if you're into flipping real estate. That's kind of your bread and butter.

Yes.

And because of that, you taught me how to do it. Then that rubs off on me. I partner with him.

Yeah.

Rubs off on him.

Wow.

Yeah. So pretty good. Yeah. See how that— see how trickle down?

We were doing a video earlier today and he had You had written down that I had done hundreds of thousands of people that I had trained and I had to—

I said thousands. Yeah.

Tone that down a little bit.

I said thousands of people and you said hundreds. But I said, but those people go out and help other people. So it's sort of like a pyramid scheme.

I got you there. I didn't hear that when we were out doing the other video.

Yeah. I just thought of it right now.

We actually do go live at locations. And, um, we were at a new flip just down the street. So look for that video coming out shortly.

Yep.

How shortly?

Next Thursday.

Ooh.

No, next Tuesday actually.

Next Tuesday.

Since we do the podcast on Thursdays, the video comes out on Tuesday.

Okay. Yeah. Sounds good.

That sounds good. Um, so I, we, I, for season 3, I added a new segment.

Okay.

Um, Two Cents. So you're gonna give your two cents on flipping. So a couple of tips. that you can get from all of your experience in flipping? And then I will go after that. I have a couple.

I thought you said it was just me. I was going to be the star.

We're co-hosts now. You let me in. Yeah, you let me in.

All right. Okay. I'm going to give you 2 huge tips. Number one, if you're flipping, you need to know what the value of the property is, how much the rehab is going to be, How much real estate agents are going to charge you to list it and sell it, how much hard money costs. You can get all that information by going one place, and that's pellego.com, P-E-L-L-E-G-O.com, and put the address in of the property that you're looking at, and it'll give you everything that you need— comps, rehab values, everything that you need just in one stop. That's number one. Number 2, if you've never heard of a binder policy, this is a title policy that you get when you're going to sell the property in less than 5 years. So they do the title search and everything for you when you buy it, and then when you go to sell it, since they've already done all that work, they only need to figure out, okay, he bought it January, he's selling it in March, then all we need to do is figure out what's happened during that short period of time. So they give you a discount. And that could be literally thousands of dollars. Just, I'm just literally throwing thousands of dollars into your pocket right now. So those 2 things.

There you go.

What do you have?

I have 2 quick ones. One is to get multiple bids. Always be getting bids on the different aspects of the flip, 'cause you can fall into using the same guy over and over again. stuck on one price. Go out there, find new contractors, always be interviewing guys, try out their work, see how good they are, because you can get a big, big discount without having to lose quality. So that's one. And then number 2 is just show up at the flips. Like, you gotta be showing up, making sure that they're doing things on time, doing things well, and that they're just working in general. Because if you're not showing up there, most likely they're just— Kind of screwing off.

Mess around, aren't they? Fool around.

Fool around.

Yeah, they're gonna be at other projects and not yours.

Exactly.

Because if you're not gonna take it seriously, they're not gonna take it seriously.

Boom, that's it.

Good tips.

Good tips. There you go. So there you guys go. Thank you very much, producer. So that's why you guys are here. Season 3 is all about providing value for you guys. Um, if you've been on the fence and you've wanted to learn how to flip This is you know one of the places you can get some free information, and we're going to have our guest in a little bit talk about how he went from just wholesaling into now flipping for much bigger profits. So we're going to hear all about that.

Excellent.

Before we do, really quick, we have a meetup on January 20th.

Yeah.

Why don't you explain who's who that's going to be?

But what's what's its significance of January 20th? Oh yeah, you didn't think about that.

I didn't think about that.

Yeah, but it's during the day, so I think we'll be okay for the meetup. We'll have it playing, but I think everybody should wear a Trump hat, MAGA hat. Okay, come prepared.

You already have one.

Yeah, so bring it to the meetup in celebration of the inauguration of a new president who's going to change everything.

Yeah, yeah.

So I didn't think about that till this morning. And then I go, oh my gosh, that is like we're having an inauguration party during the day and then we're having the meetup in the evening. So yeah, so people are going to be pumped. Come prepared.

People are going to be pumped. But our guest speaker is Danny Bate Orr.

Okay.

Do you want to—

No, go ahead.

Basically, he's an out-of-state investor. And now what he does is he helps folks get started in out-of-state investing by helping them look for properties. He'll help manage them, but he also gives them all the tools to do it on their own. So he has sort of like a mentorship program, but he has an amazing track record. He has a love for this country that was like, we almost started crying when he was like talking about it the last time on the podcast.

Yeah, he was on this podcast before. Yeah, so that'll be really, really good. If you want to look up previous podcasts, please do so. Yeah, and look at us up and remember to like and subscribe and do all that sort of stuff that everybody else does.

Absolutely. And I just want to remind everybody, we are live. So as, as our guest starts, you know, chatting with us, if you guys have any questions or anything, please let us know. Do we have anybody in the chat right now?

We got Liz in the chat.

Okay, what up?

And we've got, uh, Artisan Theory, which is, uh, Roxy's husband Steven.

Oh nice, what up Steven? Very cool. Yeah, you guys make sure to share this far and wide, let everybody know we're live right now. We're going to be, uh, talking about from wholesaling to flipping. So without further ado, please welcome our guest Chad Blau. How's it going, Chad?

Thanks, guys. Appreciate being back. It's awesome.

Absolutely. Turn that mic a little bit towards you. Perfect. There we go. Love it.

Does it have a fastener or—

Uh, yeah, yeah, yeah.

Yep.

Fastener. While you're doing that, um, if you guys want to get caught up on Chad's whole story, um, he did— he's been on— he's been a previous guest, so he can go into his whole background. Why don't you just do a quick little brief Background story, how you got into real estate.

Yeah.

Well, I met you. It's kind of like friends and family type of thing. Was in sales for quite a while and then hopped in, partnered with you. We were doing the wholesaling. We still, we still do some wholesaling as well, but ran that for a couple of years. We applied systems, scaled. And then we're now pivoting towards mainly just flipping. So in a nutshell.

Right.

Perfect. Now, why is that? What can you give us as far as the landscape of wholesaling? How was it when you started versus how is it now? What do you see going into the future?

Where it was when, I guess, when we started a couple of years ago, Move— I guess the best way to put it is moving deals was a little bit easier, right? You get your deals under contract and they typically would move pretty quickly. As this last year kind of unfolded, we noticed that it, it wasn't really working out like that. Moving deals became pretty tough. I think a lot of buyers fell off on the market and, and just shady, like shady wholesalers acting as buyers, you know, like dealing with all of that, you know, kind of, I guess, pushed us into— and a lot of other factors pushed us into more focusing on our markets that, that we live in versus trying to control something across the country in Alabama or in Florida or whatever.

So how about for the future? Where do you see it going?

Um, flipping and buy and hold.

Okay.

Yeah, that's good.

Well, we brought it up a little bit before the podcast, but BiggerPockets kind of had a headline.

Yeah.

Talking about wholesaling. Um, what— and they passed a law in Oregon. Do you know what, what, what's going on with these laws that they're passing that's sort of targeted at stifling wholesaling?

Wow. Well, I think a lot of that comes from, you know, the National Association of Realtors and then the Association of Realtors for each individual state. And, you know, obviously they're trying to protect their members. And when there's wholesalers out there and they take a property off the market that should have gone to an agent— and I shouldn't say should have gone, but more than likely would have gone to an agent— They're gonna put some laws into place. And I don't think they're the first one. I think there's another state that jumped on the bandwagon, I think a year or 2 ago.

South Carolina.

Yeah. But I think unfortunately for wholesalers, you're gonna see a lot more of this coming in the future. And like everything else, we're Americans. And if you put something in front of us, we'll figure out a workaround. for it. And so that's, that's where, you know, we're headed. Uh, you know, who is it that can't, uh, wholesale property? Uh, you know, can, can licensed agents wholesale property? Why not? You know, they're licensed. So yeah, there's, there's still a lot of questions out there. And I'm sure once the— once we get into the weeds, there's going to be workarounds for that.

There'll be workarounds. It's just Maybe start now reaching out to private money lenders, building your reputation as someone who has multiple exit strategies in case you do need to take it down for a couple days or actually take title to the property. If there's a big enough spread, it's still worth it and you can get a private money lender involved.

Absolutely.

Yeah. But I think there may be a benefit to it as well. Chad kind of mentioned this a second ago where literally, and we'll run into these guys, it'll be just like a 16-year-old gets involved and he just got out of the crypto game. He's like, I was doing this for a little while. Now I want to try wholesaling. And so what they'll end up doing is tying up a property, but not necessarily knowing what to do with it. Maybe dragging the seller through the mud. So It kind of leaves a bad taste in people's mouths. And I think that's what people picture when they picture a wholesaler. Right.

Yeah.

Yeah. I think a lot that has happened is social media and a lot of these guys just putting out content, you know, learn how to make $10,000 really fast, just wholesale property. And, you know, they give them The simple steps. You don't have to use any of your own money, and and that that attracts a lot of people who you know they want quick and easy money. So they they figure out the very basic steps of doing it, and then they'll go say whatever they need to say to the seller or whatever. And yeah, they'll lock them up into a contract and drag them through the mud. And you know, or they'll try and dispo. when we're actually wholesaling deals and doing deals, they'll act as if they're an end buyer and then they'll come blow our deal completely up.

Hmm.

So that's something we, we've dealt with. And again, it's, it's vetting. So, you know, we got to take responsibility for that. We got to vet these end buyers better when you are wholesaling.

So when A seller tells you, Chad, yeah, I want to sell my house. It's in just absolutely gorgeous shape. Do you believe them or what? How's that process go?

No, no, no. I don't believe anything anybody says.

No.

Okay.

No. Yeah.

I mean—

So what— Well, if I want to prove it up, especially if you're Um, wholesaling out of state in Alabama and Florida, what do you ask them? What, you know, I was like, I'm sorry, you don't want to tell them I don't believe you, but right, it'd be better for me to evaluate how much I can give you if you tell me a little more about it.

Yeah, yeah, just about like an open-ended question.

How about photos? You asking for photos?

Well, I mean, the first thing I do, like within our CRM, we use several different systems. I got Multiple screens, so when I'm talking to somebody, I'm already looking at their property on Zillow, on PropStream, PropertyRadar, whatever. And as we're talking, I'm running comps, you know, down here, and then I'm also looking to see what kind of photos I can find about it. Now, if I see there's old listing photos of that property, then I'll ask them. I say, "Hey, I see some photos here on Zillow." I mean, is Is it similar to this, or have you done anything else in the last 5 years?

Okay.

And then, and then they'll, they'll kind of start talking from there. Oh yeah, you know what, we, um, what you can see there in the kitchen is not the same anymore. You know, we changed, we took all those cabinets out, we repainted them, we did a new roof. And then you just, you know, let them talk.

And I'm assuming that, um, you know, because again, we're talking far away, you actually put them under contract first And then in the contract, you have an inspection period. And then you go back out there or send somebody out there, right, in your case, to do the inspection. Is that how it goes? And what happens during that inspection period?

We will send usually an inspector, we'll get somebody, we started using actual inspectors to go get like a rigorous inspection, but it was more informal. It wasn't like a formal one. And then they would come back to us with a full report. And then that way we have, you know, exactly what's wrong with it based off of their professional opinion and then photos to go along with it.

Okay.

So then we could use those with our, you know, with our buyers.

So it comes back, you know, not as you expected. What do you do then?

We do a price drop.

Okay. Yeah, you just asked for that right away and you use that as a reason?

Yeah.

Okay. And out of the number of price drops you asked for, how many percentage-wise do you think you get?

Um, I mean, depending on the price drop, I mean, I've tried to do $80,000 price drops, and these are homes that are worth maybe ARVs of $350,000, $400,000. So an $80,000 price drop when we're already at 70%, you know, lower than 70% of ARV. Those, those don't go so well. So the exact amount, I couldn't tell you, but we've had success with price drops. If it's like $5,000 or $10,000, yeah, 100%. We've done a lot of those.

Okay. So, okay.

Yeah, I think it's just good. rule of thumb to just go for the price drop anyway?

Yeah, um, I would say if it was local and I, I show up, um, I'm bringing somebody with me, they're my contractor, and literally just walk around the room and, you know, point out things that, uh, need to be repaired or replaced or whatever and Ask for a price drop right there in person. You know, yeah, you know, I know we have a contract at this price, but looking at it, I don't think I can do this price. Are you able to do $25,000 less or $50,000 less or whatever? That's one thing in real estate, you need to negotiate everything. Every— you were talking earlier about contractors and stuff like that. You need to follow up with them. You need to negotiate everything with them. You know, it's like Give me a bid. You look at the bid and you literally just start negotiating on what they just gave you. You know, if they want the work, then they're going to work for less. And hopefully they're there when you show up. And if you don't show up, then you don't pay them. Exactly.

Yeah, yeah, yeah. That's, that's, um, that's just a good lesson for anything. And I think people— it depends on, I don't know, how you were raised. Some cultures are more open to the negotiation process. Some people see it as a confrontation. How do you view negotiating?

On price drops specifically?

Yeah, just price drops. Or even if you're— now you're calling a lot of contractors and haggling them for their prices. Does that affect you internally? Are you completely fine with that?

No. I mean, with the contractors, It's pretty like cut and dry, you know, like we, we all do the, we're all essentially in the same thing. We're trying to make our money, you know? So with those guys, it's a, it's a lot different than negotiating with a seller. Um, you know, and, and when you guys were talking about like the price drops, I was thinking, I was like, you know, when we were doing the $80,000 price drop or some massive price drop, it's because I was lied to.

Mm-hmm.

You know, when we initially went under contract. So I'm not going to come out of the gate and say, "Hey, you know you lied to me." I'm not gonna you know throw my hands up. I'm like, guys, so you know we did the inspection and some things came up that that weren't talked about when we previously spoke.

Yeah.

And we need to talk about that. You know, and this is what it's going to cost. And you know if if I don't pack that into my deal, then it just it doesn't make sense. And if you want to Cancel, that's totally fine.

Yeah. You know, um, what's the easiest deal you've ever done and the hardest deal you've ever done?

Oh boy.

I mean, an easy deal is I call Alex, you want to sell your house? And he says yes.

Yeah, no, we have the hardest deal and I just— we, we just let those die once they're gone. They're dead to us. Remember Dead to Me?

Yeah.

This is— that's dead to me.

Okay.

The hard deals, you just let them die.

Is there a hard deal that you actually went through with it? But it was hard. What was that like? And what was hard about it?

Can you remind me of one? I'm really brain farting right now.

I mean, I know people yell at you, they curse at you. You know, they do all these things.

What's I mean, we've had like—

I feel like your first deal, the mobile home, and you guys only made like $2,500 on it.

Yeah.

Wholesaling it.

Definitely.

I know we've done work, like harder ones.

Yeah.

That we've gotten.

Shabar was, was a hard one.

Shabar, he was tough. We talked about that one on the first—

Um, there's a— there's been a lot of hard ones. So narrowing it down, it's usually— I'm trying to think here.

Um, right. And, and what I guess—

easy. I can't—

I guess what was hard about it was definitely 90% of them are hard.

Rodney's was definitely okay.

But crazy.

What, what was— what's hard about it?

Rodney's? Yeah.

Did somebody interfere in the transaction? Did they not want to reduce their price?

Oh, the worst one. The person— when you talk about people, I, I'm not one to say like, you know, you're dead to me kind of a person, but let's go back to that. The one guy that is, is we were helping this, this guy out up in Northern California. He had a multifamily property. I think it was like Illinois or something.

Hmm.

So we got it under contract and Alex was doing the dispo. He found the buyer and then that buyer, he ended up like, it wasn't the actual buyer. It was somebody that he knew. They ended up going over to the, um, seller and then negotiating to buy out his LLC.

Oh, really?

Which is very smart. I never thought about that ever before. I was like, okay, like people steal deals. That's, that's just the name of the business. But it like, he, he was crafty with it.

Wow.

So that one kind of was, you know, left a Okay, how about an easy button one?

Let me describe an easy button. Yeah, uh, 20, 30 years ago, I, I was at another office and I had a buyer walk in and say, I want to buy a house for my mom. I'm looking at the senior community down the street. Can you show me some properties? Well, hell yeah.

Right.

Okay. We literally went out and looked at 3 properties. He wrote an offer on one. It was accepted and closed. It was a cash offer. So it closed like 10 days later. That's the easy button. That doesn't happen, but that's the easy button. Any easy buttons on yours?

I'd say off the top of my head, Shannon, I'm using like nobody knows these names. Um, our, our most recent flip that we're doing, uh, she was very easy to deal with and very like, we did do quite a bit of negotiating throughout till we got to closing.

Mm-hmm.

Um, but she, she was great. So I mean, that, that one, you know, went smooth. She allowed us to go get into the property, start You know, cleaning it out. It was very like everybody was on the same page. She was talking with us and anytime I wanted to go over and we weren't closed, I was able to go over there. If I had a question, she was quick to respond. That's the easy button.

Okay.

You know, for what we've experienced.

So she was realistic.

Realistic. She's like a normal person.

And did you have to like, you have to like do a warm rapport type thing with her or, you know? How come she was, like, so cooperative and easy? Was it her property? Or was it something she inherited?

It was her— it was actually her dad's property.

Okay.

And he was moving in with her. And her mother had just passed.

I see. Okay.

So, she was negotiating on his behalf. But he was still— he's still coherent. So, he was there during the whole thing.

But it wasn't Biden?

Wasn't— I mean, no, it wasn't Biden.

I just want to make sure. Just want to make sure. Yeah.

Um, but yeah, it was, it was just, you know, a good experience, I think, on both sides for the most part. I think we would have liked to have gotten a better deal. A lot of stuff showed up towards the end. Um, but it is what it is.

It kind of does. Like, yeah, somebody putting their foot through the roof. Yeah, yeah.

I haven't even told you about that yet.

Yeah.

Um, but the, the flip, I mean, in itself too is, is relatively easy because it was a— it was in good condition.

Yeah.

So, like, you're basically almost through it this week.

Right.

And how long have you had it?

Less than a month.

Yeah, a month.

Oh, good. Good for you.

I think we're almost— yeah, we're almost about a month.

Yeah. And is Alex mentoring you, teaching you?

Yeah. Alex is there.

Yeah.

Alex is there.

Alex is the main guy.

I'm the experienced one. He's the new— see?

Oh, wow.

Yeah.

So we're doing our second— we're going to start our own podcast called The New and Experienced. I'm just joking. You're just—

it's the senior investor.

Middle management.

Middle. CEO investor. That probably sounds better. Sorry.

Okay.

Um, yeah, and then the newest investor.

Okay.

There you go. Yeah, pretty good.

Joe says, no, I don't like this.

Um, maybe you could talk about now, you know, doing your first flip. Um, What are some things that you wish you would've done better? Or what are, what are some things you're gonna do on the next one, you know, for people that want to get into it?

Right. Um, I think, uh, it kind of, you mentioned this earlier, you know, and we've, we've been working on it, is getting, you know, as many subcontractors as you possibly can. At your fingertips. Uh, like, you, you can't trust anybody, like, I feel like, over and over and over again to continuously do the job right every single time. So, you know, we built out a huge Excel spreadsheet and thought of every single type of subcontractor you could possibly think of.

Mm-hmm.

And we're just filling that up as many people as we can. We're getting pricing from 'em, negotiating with them. Hey, You know, we get multiple properties, blah, blah, blah, blah, blah. I think that's a huge thing because you need people to rely on because obviously time is money in this. And, you know, wholesaling versus flipping, your cash conversion cycle is, is a lot longer on a flip versus just wholesaling a deal and then it's out of your hands and you don't, you don't care anymore.

How did you end up financing the deal?

We did hard money for the initial purchase, and then we got some private money to, you know, fill in the gap for the rehab and the extra costs.

Okay. Yeah. And you say we— is this your project, or are you partnering with Alex?

Yeah, no, we're working together.

Oh, you are? Oh, I didn't know that.

Yeah.

You're cheating on me?

No, I'm not cheating on you.

No.

Uh-oh.

Okay.

It's mine though.

I just want to make sure.

Yeah.

Okay.

It's all mine, Joe.

Okay. And hard money, any company in particular you went to?

Kiavi.

Okay. And interest rate and points?

Yeah, that, that was another thing we learned was making sure to pack in the whole— everything that is involved with the hard money. Because we figured the interest and all that, and then there was a lot more cost to closing with them than we expected. So I mean, what was that, like $10,000 to close with them? What was it, $10,000?

I think so. Yeah, it was like fees.

Yeah. 10% was their interest.

Especially when you're like, don't have big time experience.

Um, well, you have some experience under your belt.

Yeah.

Did they ask you for that?

Oh yeah. Okay.

Yeah.

Okay. You weren't like a brand new guy. No. Especially if you got 10% interest. I know that, you know, they gave you a break there because normally it's like 12%.

Yeah, I think they're like at 10%.

If you're just starting out.

Well, and then they have, um, something going on right now where they have like 8% interest in certain— it depends on the property, and then they'll, they'll loan up to 95%.

Nice.

Yeah, it's kind of crazy, but it's nice. The places we're in right now, they're not doing that. But yeah, they want a little more skin in the game because I was trying to ask them, does that mean it's a bad area that you're flipping in? No, I mean, it's Moreno Valley, so it's Hemet adjacent. Oh, that sounds nice.

Okay.

It's a beautiful neighborhood.

Yeah, no, it is a nice neighborhood. But maybe talk about, so you talked about gap funding. How did you get the gap funding? You said private money. How do you get that?

You find people who are looking to make interest on their money. So reached out, And luckily, I had some family contacts who had some extra money, and, um, and they were open to making some interest. Pitched them on it. And yeah, they're getting 12% on— I think it was $50 grand.

So you're getting more than Kiavi's getting?

Yeah.

Well, I think—

So now, how did you secure that? I mean, is there like a second trustee on the property?

Yeah, so that was like another odd situation with Kiavi. I don't think they like third-party lenders.

That's where I was headed with this.

Yeah.

To find out.

So I don't know.

Um, no, he is the second trustee.

We got it signed.

Okay.

Yeah, but then something was brought up like towards closing about they're not— they don't want that, or they don't want third-party investors. And I mean, it was still closed, so.

Okay.

Yeah.

He basically just had to sign off a third party.

Like I was the third part. Like it was—

Because it did come from your account.

Right.

Yeah.

So maybe that's why it worked.

Mm-hmm.

Because it came from my bank account.

Okay.

But I don't know. I mean, as long as it went through, I wasn't asking questions. I'll find out the repercussions later, baby.

That's not the way I taught you.

Hey, now, come on, Joe.

That's not the way I taught you.

That's just—

yeah. Okay.

Yeah, we're flying by the seat of our pants here.

You see when we're not involved, Joe, what happens?

It's very scary.

Yeah, you see that.

It's a wild west.

Very scary. So, um, I mean, private money, people always wonder, like, they want to get started in flipping, they don't have the funds. Did you have that much money laying around? You said you went to family members. Is that like the best place to go to first? How did these people find out you were even involved in real estate?

Yeah, I mean, you can, you can go to friends, family, you can go to meetups. There's, there's tons of people who, who want to fund deals, you know, they want to make money with their money. So, I mean, I, I'm not by any means an expert on raising money, so I don't— I couldn't confidently answer that and, and push somebody in the right direction. You just gotta, you gotta start asking.

Okay, so the most important question at the end of the day, how much profit do you expect after paying everybody off? After paying Kiabi, after paying your relatives, how much total profit are you looking to get?

We're looking net $60,000.

Okay.

Yeah, with minimal work.

Yeah, that's not bad. So Not bad. So looking at 2, 3 months, hopefully. Yeah, in and out.

Hopefully, hopefully as soon as, you know, hopefully we're done. It's, it's a month rehab. We'll get it up. Obviously that takes time to, to list and then, yeah, blah, blah, blah. So yeah, 2, 3 months.

It's not bad money.

Not bad. Tasty. I know.

And you're sharing half and half?

Yeah.

Okay. All right.

Yeah. See, you taught me that.

Yeah.

Joe says, where was I, guys?

You taught me that.

Yeah, that's fine.

Yeah.

Um, but, um, I guess, I guess it's kind of the chicken or the egg thing because, you know, when you're going around, you're asking for money, people would say, I want to see, well, what's your experience, you know? So how do you get that experience to ask for the money, you know what I mean? It's like—

You have to start someplace is what you're saying.

Is that— that's what I'm saying.

Yes, you have to start someplace, and that's a good place as any to start.

Yeah.

Or you can, like, if you're trying to get into it, flipping, I like, I don't have nearly as much experience as you, Joe. But when I think about somebody who's new, I think like start off like just dipping your toes in, do some wholesale deals, get your agent's license, like figure out how real estate works. stack your money as you do deals, then you, you kind of know the flow of, of how things work instead of just jumping in. You know, like a family who— they, their W-2 jobs and they want to flip a house. You know, it's like, how would you, how would you point them in the right direction when they've never done a real estate deal? They never even bought their own house.

Yeah, not good.

Because there's a lot of those.

Yeah, there is.

Well, and then I would just automatically just say, go to a mentor. That's the best place to do it. Don't figure out all these mistakes on your own by yourself and then have sleepless nights, end up a couple grand in the hole because, I don't know, for whatever reason you didn't want to make the connection beforehand.

Right.

Then also beyond just finding a mentor, bring value to that person. If it's a deal, if it's something else, Like we've had somebody that brought us a deal in Vegas. He wanted to learn wholesaling and I was like, all right, I can help you do that. And then he was like, I'll split it 50/50 with you. And then we just took it, kind of showed him step by step by step by step, ended up being great. So that's, and it's a win-win. There's like—

That's how it works?

Yeah. That's the best way to do it.

Boom, bang, done.

Well, there's so much money to be made that you You should want to split the watermelon rather than just trying to eat the grape.

Mm.

So you just can't continue to ask for help and people expect that you're going to answer every question that they have.

I mean, you can try that, but I feel like it doesn't really set you up if you're going to be in this for a while.

Yeah.

So when you do call on someone, they do answer because they're like, oh, this could be a deal that we could both make money on. It's like, oh, I'm going to answer this. I'm going to answer this.

Got it.

Rather than just take, take, take, take, take.

Got it.

All of a sudden they're like, eh, just skip that call.

You get a— I think you get a lot more of those. A lot of the guys who are trying to learn and then they'll call, they'll call you and they're like, well, I called the whole list and like this person said this and that. And like, I think I have some people who want to sell. And I'm like, okay, let's get on the phone with them. What can you tell me about your conversation? Because they come at you like, oh, I got somebody. They're all hyped up. Well, they just said they wanted to sell. I was like, okay, well, what do they want for it? I don't know. I was like, that's, that's just somebody who says like, that's not— we haven't gotten anywhere. You know, you need to do more. I don't feel like people want to do the work. They want to reach out to you or to me to then do the work for them and then close a deal for them.

That's what's happening.

And then split it 50/50.

Yeah, yeah.

And it's like, I just stop. I won't do it. Like, I don't— yeah, it's a waste of time.

I hear you.

I'm sure you get it all the time, Joe.

Buy me lunch or a cup of coffee and I'll tolerate you for an hour.

Yeah, that's fair.

I think it's fair.

It definitely is fair because then, you know, I mean, how many people have like Told you that they're gonna— this is my life path now.

Thousands.

After I talked to you, you've opened my eyes.

Yeah.

And then you just never hear from them again.

And then the next day they get closed back up again.

Yeah.

Yeah. What did Joe tell me?

Yeah, that sounds too hard.

Yeah, well, I talked to him for a while and it was like, that's a lot of hard work. I don't want to do that. I thought it was easy. And isn't that what they say on YouTube? Make thousands and thousands of dollars. That's the part, you know, it's like, it's easy.

Drives me nuts.

But when you actually start doing something, you know, it's not as easy as you think.

No.

Yeah.

If it was easy, everyone would do it.

Yeah, I've heard that before.

I think there's sort of a shift happening too, even within like the guru space where more people are coming out and saying it is harder than what you think. I think there's just— yeah, I think like in 2020 when the market was like, they're like, it's so easy.

All you gotta do is— yeah.

Now that it's kind of like people are falling off, people are just like getting over it, then they're like, okay, this is the real story. And people are resonating with that. I mean, it would be better to hear that upfront, right? Than to get involved and thinking it was like easy. 'Cause then you're doubting yourself. Like, I should have a deal by now.

It's just like—

Be honest from the beginning.

It's It's hard. You can't do it for free. Can you? Can't sustainably do it for free. It takes a lot of money to run a wholesaling operation if that's what you're trying to do, or even if you're trying to flip.

Yeah.

I mean, you, you don't necessarily want to get all your deals on market.

No. And I think the wholesaling route is a great path if you're going to start out. You can do it for not a lot of money. There's going to be some money you have to spend, but most of your, you know, time is just that. It's just putting the effort in, making calls, things like that.

Yeah.

You know, you can get systems and stuff for a few hundred bucks a month, um, that'll help you, but you have to put in the time, right?

Mm-hmm.

Do you see— well, now we're kind of shifting our focus more to the flipping, um, because I feel like that's gonna sustain through these laws, you know, or whatever may be coming down the pipe. Or we— you can say wholesaling is saturated or whatever, but I think wholesaling will always be there as an exit strategy.

Right. You know? Yeah. In case that person doesn't want to lower it by $80 grand, you know, you might be able to wholesale it to somebody who says, oh, I just want to flip properties. And yeah, I just got into this yesterday and that looks like a good deal. Okay, buy it. Yeah, buy it.

Or people are willing to just take $30 grand on it or $25, you know what I mean? Just to keep their guys busy. I don't know. I don't know what the answer is.

Yeah.

Or how people pay for some of these things, or maybe they're buy-and-hold investors, but some people are willing to pay more.

Well, right. There's people get into the business and end up losing thousands and thousands of dollars, mostly because they don't listen.

Mm-hmm. You know?

Yeah.

So that's the other part of getting the advice is like you have to listen to it.

Yeah, it helps.

It helps. It saves you so much headache. It's crazy. Do we have anybody in the chat?

Uh, yeah. Coach Steph says, asking for help is my middle name.

Oh yeah.

Uh, yeah, we're not gonna go into it. We'll be here for 3 or 4 days. Okay.

Some people are just not helpable, you know. I'm just kidding.

Not Steph.

She's— she can take a joke. Um, cool. This is the part of the show— we're carrying this on from season 2— where we have videos. I want to get your reaction, your raw reaction, straight here live. Make sure the sound is running.

Yep, sound. We need sound.

Sound is on.

I have to look at a million different screens right now, so bear with me one second.

Yeah.

Okay.

People like this, so we kept it into season 3.

Yeah, I think it's great.

It's a very popular—

And by the way, we do have a live studio audience.

We do?

Yes.

Little Beau, little baby Beau.

Chad brought his wife and his brand new spanking— he's not spanking new. How old is he now? 3?

No. Oh, 3 months.

Yeah. 3?

Oh, I know.

Yeah, 2 months.

Yeah.

Yeah, you guys like to— I know, I know women like to say like he's like—

16 weeks.

16 weeks.

Right.

I'm still at the month. How many months?

Two, two and a half, three.

Two and a half, three. I say I guessed it.

Yeah, no, you did good.

It's pretty good. Twelve weeks.

Yeah.

I wish we had a camera we could put on him right now.

He's being perfect.

Just how you take care of him.

We need baby on camera.

Yeah, he's just having popcorn back there. You know, just having a good time.

Clapping, laughing at all his dad's jokes.

He's learning.

Yeah.

He's learning. Two and a half months old.

That's right.

That's the youngest investor I've ever seen. There you go.

That's good.

Yeah, it's good. That's that's excellent. Yeah.

All right, we ready for a couple videos?

Yeah.

Yeah.

First one is red doors for your flips.

There was two strategies with your flipping business. You painted all your doors.

What color?

Red.

What color? Cherry color.

It's intentional in form of consistency, so the brand is consistent. And I actually researched best color to paint front door to sell a home, and pink was actually one of the worst.

And then there's there's there's a statistic on all the other colors, and red was number one.

There was two strategies with your flipping business. You painted all your doors. What color?

Red. What color red?

Cherry cola.

It's intentional in the form of consistency.

So the brand—

Boca Raton, Laguna Beach. Yeah.

Miami.

Yeah.

Miami.

Oh yeah.

Yeah. Miami.

What do you think about that? That guy? What do I think?

Yeah.

His red door? Yeah. I mean, if that's his brand and it works, it works.

I mean, what do you do for your door?

Black.

Oh, I see a red door and I want to paint it black.

Ah, okay.

We like black.

Black and white.

Blue's good.

Yeah, it was good.

Caribbean blue is my personal fave.

Yeah, yeah, those are good. But I would say you have to flip to what the neighborhood is. So like you were saying, if you go down to Miami, you know, yeah, you want to kind of pick these bold colors, pink and light blue, dark blue.

Yellow or something.

Yeah, you have to kind of pick. Like, we were doing a flip in Dana Point and my daughter Melissa, who was our designer, started to pick a bunch of blue colors and we had been putting gray everywhere. You know, the paint on the walls were really light gray. The flooring was gray. And then all of a sudden she just changed it up and I thought, wow, that's a pretty good idea. You know, just—

That's big Dana Point vibes.

Yes, very big.

Beachy.

Absolutely. Yeah.

Yeah, it's kind of interesting how like everything was gray for a while.

Yes.

And then now it's like warm tones, I guess.

Yeah, yeah, it changes. And we had granite, now we have quartz, you know. So yeah, things change. Designs change. Ask my wife. I have—

You've had 4 kitchens in the same house?

Yeah, at the same house.

Jeez.

Sorry. At least you're keeping up, you know.

Yeah, she says, oh, that's old. I go, oh God, please don't tell me it's old. We need to, we need to change it. You have good eyes. That's the thing, I don't, uh, take her around to look at Big Time's property because if I do, she goes, Oh, that's the new style?

Yeah.

Ours is old. Let's do it again.

You know, the live and flip every 4 years.

Yeah, no, that's not good.

We don't even own a home and I see Big Time Properties and I'm like, oh gosh, I need to redo my entire kitchen that I don't have.

Yeah, yeah, yeah. We've just renovated our rental. I haven't even told the landlord.

No, we haven't.

Yeah.

No, you haven't. They're going to be like, wow.

I know.

We should be like, thank you.

Has the baby rubbed off on you two yet?

Yeah, of course.

Yeah.

Yeah, definitely.

Okay. Did you tell her my prediction?

Yep.

Yes, I heard about it.

Joe says a baby girl, 2025, 2026.

Okay. Baby girl. So you guys, Them two can, yeah, they can play with each other. You know?

Better be soon or else it'll get a little weird.

Yeah.

Okay.

What else we got?

All right, producer hot seat. Here we go. Five mistakes I made flipping houses that lost all my money.

Five mistakes I made flipping houses. I didn't have a clear endgame. Why was I doing all this for? Why am I doing all this flipping for? And I realized that, right? If I don't have endgame, how many passive income I want, then everything I'm doing, I'm never going to get close to my endgame. Have a stand-up profit, location, condition, style home, and how to actually manage the contractor well. Poor communication, poor work ethic, poor time management. They have poor self-leadership, and they don't take responsibility for their own actions. I overspent on the house by. Designing it way too expensive for the property, spending too much money on the finishing of the property because I just wasn't super familiar with the area or the market at that time. My biggest mistake: make a mistake. I should have kept more of the houses as rental properties because you can't buy that cheap now, and I would have created more passive income sooner than late. Five mistakes I made on flipping houses.

That's a lot.

I didn't have a clear endgame.

Why was I doing all this?

Fool.

Why am I doing all these mistakes?

Yeah. So what do you think?

I think the over-decorating, that's, that's a big one. Um, overdoing it on, on the rehab. Just do, do what the comps show and, and that's it. Don't go crazy. You're not going to live in it.

Wow, you are learning a lot from this guy. You know, I've heard that before.

You've heard that?

Yeah, I've heard that.

I've heard that somewhere too.

Did that come out of your mouth, Joe?

I'm like, I've heard that before. That's good. And you're actually taking the advice?

Yeah.

You know, you're not going in there and going—

I'm shocked, Joe.

You know, I think we ought to put this $12,000 chandelier in this house.

Absolutely not.

You know, because that's what's going to sell it. The chandelier, mark my word, is going to sell this house.

Have you ever seen Flip or Flop? Because there was definitely an episode where the chandelier sold the house.

Oh, really?

No, I'm just kidding.

Oh, okay.

I was like, maybe around here.

I missed that one.

Yeah. I mean, we are in Orange County. If you go to certain places, you have to get more higher end, but then you're dealing with some snooty buyers.

Yeah. I don't like working in that price range. Yeah. Yeah, see the door you came in? Go right back out.

All right, one more video. All right, this one is Cold Calling Be Like.

Yeah, yeah. What?

Is this Christopher?

Not fucking Christopher.

Who is it? Never mind who it is.

Did you change your number recently?

No, no.

Are you calling from the federal government or something?

No, I'm not from the federal government.

Then go fuck yourself. Take your name off the list.

Or what? What?

May you burn in the deepest pit of hell.

See you there, bud.

I just like to throw those in there.

Pork brain.

That is the best by far.

Because no matter what cold calling you do, you're gonna come across those guys.

Oh yeah. So is it mostly guys or have you run into some gals?

The one. Yeah, the one lady. You were at the office here and she started just saying, screaming, just buy my house! Yeah, she was the craziest lady I've ever heard on the phone.

And she was being cooperative. She wanted to sell her house.

No, no, no.

Joe's like, that's a deal.

No.

Yeah, she wasn't. No, she— it wasn't. Not at the price though. She wanted it to— she's like, where are these young families, a nice family to buy my house?

Not—

I hate flippers and investors.

Oh God. Yeah. Okay.

But it's—

yeah.

I think Alex told me a story about some guy that you talked to and it involved a suitcase. Do you remember that story?

Suitcase?

Yeah. It's like he was willing to sell the house, but he wanted to—

Oh yeah.

Go ahead and tell us.

Yeah, no, we, we basically had a deal that was down, quote unquote. And this guy was working for supposedly a super wealthy man over, what is it, Florida? I think the deal was. And anyway, so long story short, they agreed to the price, but the only way he would do the deal is if I met them at a McDonald's with the suitcase full of money. I was just like, that does not work that way, man. He's like, well, he can't show anything going on record. I was like, I get it. Like, I get what you're trying to do, but we can't, we can't do a deal like that.

Okay. I was thinking about another one that Alex had told me that—

Another one? Yeah, there's plenty of these.

Yes.

Plenty to go around.

A suitcase, going to a park, putting it in a trash can, putting the lid back on, walking away. As soon as he got the money, he would sign the deed and send it to you. No, I don't remember that at all.

No.

Oh, that sounded like a good one to me.

That's a good one.

I mean, I had one recently where she, she said— we—

I sent—

she agreed to do the deal. I sent the contract over. She opens it up while we're on the phone. She goes, oh no, I'm not, I'm not signing until you send the money. I said, what do you, what do you mean? She says, you, you send me the money first and then I'll sign the contract.

I was like, what are we doing here, guys?

Is that how this works?

So maybe she, maybe she thought that's the way it worked.

And yet that's the thing, you know, it's, it's our job, it's our fault at the end of the day to, to, um, you know, explain these things, how it works to people.

So yeah, yeah. She said, didn't I? She didn't know.

She didn't know.

She's just asking.

We did have one, uh, Chad got a free hot rod.

Oh yeah, yeah.

Oh, I remember that.

Barracuda.

The pink slip came here to the office and I go, Alex, what's this? And so you explained the story to me and I said, you know, this is signed. I like— I can take it to DMV and just say it's mine now. But he wouldn't let me do that.

You can have it. It's not a Tesla, Joe, I'm telling you that.

No, but it looked like a really cool hot rod.

It's pretty cool. It's a pain in the ass, though. I've been working on it for like months. It's just—

it's—

yeah, I want to get rid of it.

It's like, no wonder the guy gave it to you.

It's like a boat, you know? The 2 happiest days in a boat owner's life are the day they buy it and the day they sell it.

Yeah.

Is that what that is?

100%.

Really?

Yeah, I told him he could have it back. Well, okay, so we My wife's— her grandpa, he has built hot rods his whole life. He's a big builder. He's currently building a car, has awesome cars. Anyway, so he's been helping me kind of go through the car because we wanted to go through it since it's been sitting in the garage for 10 years and hasn't been ran.

Wow.

You don't just want to fire it up because it's just been sitting there. So he's been assisting me with going through all All the things that you need to go through before you turn it over and fire it up. But our next visit to the car, we're turning it on. I'll send you a video, Joe.

Please. Yeah, please. That'll be very interesting.

It's going to be insane.

Fire coming out.

So loud.

You'll be able to hear from here. I'm telling you.

You're right. It's not a Tesla, and especially not a Cybertruck.

No.

Because you can throw fireworks and gas cans and everything in the back of a Tesla and it's not going to harm anything around it. It just goes straight up like that. You know?

Yeah, sure.

So Teslas are built tough.

Well, you guys are missing the craziest part of that deal is that that deal actually fell through.

Yeah.

We don't like talking about that.

That was a little—

The deal fell through.

But you got the car.

And he got to keep the car.

He's like, I don't back— I'm a man of my word. I don't take anything back.

Why did the deal fall through?

We had a buyer who said he was good and then he needed extra time and then we were going to novate it.

It was lies.

This is why Alex is still the new guy. It's like months later. I'm like, you at least got the EMD, right?

Oh yeah. No, it didn't go hard. Yeah.

So then I had to fight him for the EMD.

Serious?

But I ended up getting it. I ended up getting 9 out of the 10,000.

But I said any buyer wants an extension, I would just demand the EMD immediately.

So she learns quicker than me.

Have I taught her well? Come on.

Yeah.

This is the way it works. Yeah. Yeah.

That deal, I told—

How many, how many on the, on the transaction we had in San Jacinto, how many EMDs did we end up keeping? Like 2?

Uh, 2, but they were doing per diems every day.

I think we made like almost $30,000 or something.

Yeah, exactly. That's my point.

Mostly on EMDs.

Yeah.

Nice.

There you go.

Yeah.

Yeah. You want an extension? Oh yeah, we'll give you an extension. Release your MD right now. And they want another extension. Oh really? Okay, now we're going to throw in a per diem.

That's how we should have done.

Yeah.

Yeah. It kind of weeds out who's serious or not because then your money's at Instead of just—

yeah, exactly. He would have backed out probably sooner.

But hey, call, tell him he can have the car, man. I don't want it.

I know.

I don't.

He's like, no, no, no, no, no, no, no, no, no.

Anybody do hot rod cars and stuff, reach out to Chad.

Yep.

He's got a car for you.

Yeah.

Free '68 Cuda, baby.

Yeah.

It's fully built. Nice drag car. Wow. Yeah.

And so what do you do? It's not street legal. No.

Oh, it's very illegal.

I don't know, just look at it and you're like, yeah, smoke cigars around it.

You have your buddies come over, drink a beer, look at it and start it up.

Start it up just, you know, just to hear it.

It's my drag car.

Yeah.

And your wife approved this or she didn't even know?

Um, she, she approved it.

Yeah, sure.

Because we put it at her dad's house.

Yeah.

So that's another thing. It's sitting on his property.

I see.

Got it.

We thought it was going to be quick and easy. It's never quick and easy.

No.

I was like, oh, I'm just gonna get it and I'll sell it. I'll have it for like 2 weeks.

No, I think it's been 3 months. How many months?

3 months.

Not bad. Yeah.

Well, the deal may still have a little bit of fruit on it because Lauren now has it as a listing, possibly.

Possibly. Working on it.

Yeah, go girl!

Yeah, I kept it alive somehow.

Take up his slack. Pick up the pieces, girl.

That's what they both do. That's why I have them around. Yeah, pick up the slack.

Thank God. I know.

Yep, exactly. Very cool. Well, how can people reach out to you if they have a deal or they, you know, have some private money and they want to make double-digit interest on that money?

Yeah, you can. I'm not super active on social media. I probably— I should be 100% more. But you can reach me on my Instagram. It's private right now, but it's @chadblau. B-L-A-U. I think you got it there on the screen.

Yes.

That's the easiest way.

Nice.

And yeah, just request a follow and shoot me a DM. Very private man.

Yep.

Cool.

All right, well, thank you so much. I appreciate that. I hope that's some inspiration to you guys, you know, um, if you want to get started flipping. First, buy Joe lunch.

Buy me lunch.

Start from there.

And then—

I'm hungry.

Yeah, he's a very hungry boy.

Um, I'm hungry.

And then, um, you know, just learn from him, partner. And then you can have your own business one day.

Spread your wings.

Spread your wings and fly.

Make thousands and thousands of dollars.

That's right.

That's okay.

Cool.

Yeah, that was fun. That was the kickoff to season 3. Amazing. It feels good. We're invigorated for the new season. We're gonna have a lot more guests. We're gonna do some podcasts by ourselves. We're gonna do more in-depth dives into the topics that you guys want to learn about. So make sure to comment below this video any topics you want us to cover. If you're a beginner or you're an experienced investor, we got you covered. So we'll see you on the next one.

See you later.

Bye.

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