From Contractor to Real Estate Investor — The Wake-Up Call That Turned Him Into a Multimillionaire

What's up everybody, this is the Painless Flipping Podcast and today I have Pace Morby. What's going on, brother?

What up, dude? Dude, good to see you here in Utah in this dope studio. Congrats, this is awesome, dude.

I'm happy that you're here, man, because I know you're a busy guy, you got a lot going on today, so I appreciate your time.

Of course, this is the kind of stuff that is really important to me is somebody can get some value from this and help their journey, kind of cut the, cut the learning curve down a little bit, I'm happy to do it.

That's the goal. And at the Painless Flipping Podcast, where our goal is, is to show people that getting into real estate doesn't have to be that painful, right? It can be if you just try to figure out everything yourself. But the reason why we have you on and other experts on is to get you guys to kind of learn from your experience, from the experts' experiences, and know what, what they can learn and what they can do to go ahead and not suffer everything alone, right?

Right.

That's the goal. So we like to ask people, what they did on their first deal, like how much money they made on their first deal, how they got it, and where you're at today. So let's dive right into that.

I started out by lying to myself for 7 years that I was going to get started in real estate and I was going to figure it out on my own. That's how I started. For 7 years, I told myself I was going to get started. I was going to get started. I was going to get started. I was a contractor to, you know, paying my bills as a contractor, own my own construction business, and for 7 years would work on other people's flips as the contractor, other people's apartment complexes. I even Sprouts— you guys have Sprouts here, right?

I'm not familiar with that.

I mean, okay, well, People in Arizona know Sprouts.

Yeah.

And Sprouts is a big company, kind of like Whole Foods, but they're—

Oh, Sprouts.

Okay. The grocery store.

Okay. Got it.

The grocery store. So I did like all their renovations. I did all their tenant improvements. I did all of that stuff. So all the signage you see inside of a Sprouts, I did all of those things. Wow. That's what I was doing for a long time. And I would work on all these buildings and I would lie to myself so long that I convinced myself that I was also in real estate. Yeah, I convinced myself like, look at me, I'm touching all this real estate. We're doing this stuff. I'm in real estate. So when people had asked me, instead of me saying I'm a contractor, I'm like, I'm in real estate. I do real estate stuff. Oh, what do you do? I renovate properties. I fix and flip. Yeah. And I didn't really understand that I wasn't involved in real estate. I was basically a service provider. I had a lady come to me, hired me to do a flip for her. Her name is Bethany. This is back in 2013. Okay. And so roughly 10 years ago, she says to me, hey, will you do a flip for me? You know, you have a great reputation. I was doing work for Opendoor, Offerpad, Zillow, Sprouts. I had a great company.

It was a company that you owned.

I owned it. Yeah. So I owned it. I was a contractor for 10 years, did probably 7,000 renovations, something like that for other people.

My goodness.

Yeah, it was a lot. And now a lot of those renovations— take Open Door, for example. Open Door, I was their first contractor when they came on the scene.

Okay.

Offerpad— do you guys have Offerpad in Utah?

Not in Utah, but Offerpad. Okay.

Same thing with Zillow. So I was one of Zillow's very first contractors when they started actually doing flips and buying properties and doing all those things. So I would do 60, 70 renovations a month for these big companies.

Yeah, that's unreal.

You know, there were $5,000 to $10,000, $15,000, $20,000, you know, estimates that we would do the work on. Carpet paint, carpet paint, a lot of carpet paint, drywall repairs, touch-ups, all that kind of stuff. And I created a little machine that made really great money. My first time clearing $1 million was in 2014, the year after I got into real estate. I cleared $1 million in construction, like take-home.

Yeah, yeah.

So I had a good construction business. I wasn't like broke, right?

Right, yeah.

And the problem is I was reinvesting all of my money back into my construction business, which was like, I just didn't have anywhere else to go. I didn't have the financial education 10 years ago. I was 30 years old thinking I had it all figured out. And then Bethany hires me to do a flip. I do it on time, on budget. She hires me again for the second one, on time, on budget. On the third one, she comes to me and she's like, what's wrong with you? Why are you a contractor? This doesn't make any sense. No contractor I know shows up on time, gets the budget done. You know, any of that. She says, you should be in real estate. I'm like, what are you talking about? I am in real estate. Are you a lunatic? I am in real estate. Look at me. Look at all these houses I'm flipping. She's like, no, no, no, you are my slave. Your business—

she talked to you that, since, like, that directly?

Like that directly? Yeah. Still to this day, 10 years later, we're friends. And she'll still text me. She goes, you You shouldn't have said that. You shouldn't have done that. And I'm like, I appreciate her.

That's funny.

She says to me, you are a simple Google search away from being replaced.

Really?

You're nothing. You think you have a business? You don't. Your business relies on my business to make money. And I was like, name a business that doesn't. She's like, real estate investors. I don't rely on anybody else. I rely on tenants to pay their bills. Yeah, there's reliability, but I'm not reliant on somebody else making decisions for a business. Yeah, I own this thing. The only person that cannot be replaced in a real estate transaction is the real estate investor. I was like, dang, she broke it down. She's like, real estate agents, service provider. They're not in real estate. I'm like, okay, that's kind of weird. A real estate agent, Bethany, is in real estate. She's like, no, they're not. I go, tell me how. And she goes, is a mobile notary in real estate? I go, no. She goes, then how is a real estate agent any different than a mobile notary? Who's somebody who just has you sign the documents? And I'm like, holy crap, you're right. Like, all we are are service providers to other people who are actually in real estate. Lenders are not in real estate. Real estate agents are not real estate. Notaries, appraisers. Yeah, there might be a piece of real estate attached to it, but they're not in real estate. They're a service provider to somebody else's real estate business. And I was like, crap, I have been lying to myself. And she then told me to pull out my phone and she says, I'm sick of your excuses. We're going to generate leads right now.

She sounds tough.

She's gangster. She's what everybody needs. Like, she's what everybody needs. You can't— you said at the top of the podcast, which is you can't do this on your own. You'll never be able to do it on your own. Even to this day, people look at me and they go, oh man, he's got it all figured figured out, no, I have great team members. I learn from people all day, every day. I've got mentors, I've got people I collaborate with, I've got people I'm doing deals with. I learn something new on every single deal, even 10 years later. But Bethany forced me to pull out my phone. I had like— it was like back in the day when the iPhone 5 was out, right? And you had the internet, you had Safari, you had all that stuff. And she makes me call a company that sends out postcards and mailers. She goes, how much money do you have in your bank account? I got money. Yeah. And she goes, I'm going to show you how to go generate leads and get your first deal without any of your own money. I go, how? She goes, you have a credit card? I go, yeah. Use your credit card spend $5,000 on postcards and mailers. And it was like excuse after excuse. I kept telling her, we're standing outside of a house, by the way, that I was about to give her an estimate on to do her renovation. We're in the yard, like it's just nitty-gritty. She says, pull out your phone, we're going to call a company, you're going to use a credit card that's not your own money, somebody else's money that you're borrowing, and I'm going to show you how to generate leads and get phone calls coming in, and you're going to talk to people about buying their house. I'm like, I don't— what? She's like, get it done. So I, I go, but I don't know where to send the postcards into this. And she goes, you're such an asshole. She called me an asshole. And she's like, you just keep making making excuses, excuses. You keep kicking the can down the road. And she's like, call the damn company right now. So I called the company, and when I talked to them, they go, oh yeah, how much? What's your budget? I go, $5,000. And now I don't send out mailers, but this is how I got my first deal. Of course, it's really expensive, so new people don't send out mailers. It's expensive. Yeah, you can do it when you're getting deals and momentum and stuff like that. But I go, hi, I'm a new investor, I don't know what to do. And they go, oh, no problem, where do you want to buy? I look at Bethany, she Just name a city, you idiot. Doesn't matter. And I go, Phoenix. So the guy goes, perfect. I got the perfect postcard, the perfect zip code, the perfect this, the perfect that. When do you want them sent out? I go, I look at Bethany. She's like, tomorrow, you idiot. Ready to go right there in the yard.

This guy's like, probably stoked for $5K. You know, he's like, let's get it.

Oh yeah. So he's— I spend the $5 grand, postcards go out. My first call comes in 2 weeks later. Guess what? I missed the first phone call.

Okay.

I missed the second phone call. They keep—

they called back twice.

No, no, these are right. I sent out 5,000 postcards.

These are different calls.

Okay. Okay. They're different cards. I got a lead that comes in. I missed the call. Why? I was installing a toilet. Literally, I was installing a toilet.

What would you say that job would cost to do that job?

$20.

$20. Okay.

But what it was is at the end of every renovation, we all know this, that are fix and flippers or whatnot, you're the final— the like final minute details are the hardest part for people to get done. Yeah. So I would go in and do the cleanup work after all my guys. I'd be like doing the blue tape and whatever.

Like, yeah, but you hated that, huh?

I loved it.

You liked doing that?

That's the problem.

Okay.

The problem was I really loved being a blue-collar guy and putting my hands on stuff, and I couldn't get myself out of it. So I was installing a toilet, my first lead comes in 2 weeks later, my phone's in my back pocket, I'm like, I'll answer it later, it's probably a customer for my construction company. It wasn't. It was my first lead that I spent $5,000 on.

Wow.

Then about an hour later, I get another lead. I missed that call too. Then at nighttime, my wife asked me that night, I get home, she goes, hey, have you started getting leads from the postcards? And I go, Uh, yeah, I got 2 leads I think today, but I'll call them back tomorrow. And she's like, you are so dumb. You won't wait 15 minutes to go to a restaurant that has a 15-minute wait. You'll go to the next restaurant, right? Do you think these people calling to sell their house to you are going to wait a whole day for you to call them back? And I'm like, you're so right. So this is like 8 o'clock at night, and my wife says, pull out the phone and call the damn people.

And you got a bunch of women that are just helping you out, man.

Look at my company now. Like, it's amazing. All my, all my badasses are women.

So that's awesome.

So she ends up going, let's call these people back. And as I grab the phone to call these people back, I get my third lead comes in because Direct mail, the way it works when you send out postcards in mail, the mail hits all the same day. So you get slammed with calls for like maybe 3 or 4 days and then the calls kind of stop coming in. Right. So I was getting slammed with leads. I pick up the phone. It's a lady that is— she goes, hey, you know, I saw your postcard. I'm calling. And her name is Janie Munson. First deal I ever did.

Still remember her.

Oh, yeah. We still text. She sends me a gift. She sends me gift cards for my kids. Like, wow. Oh, yeah. My first deal. I'll never forget this.

That's amazing.

I learned everything I needed to learn to, like, really get started in real estate off of this deal. So here's what happened.

Okay.

One, I took imperfect action. I generated the leads not knowing even know how to comp. I didn't know how to fill out paperwork. I didn't know how to negotiate, talk to people. I didn't know what a deal was, a deal, any of that kind of stuff. But Bethany kept calling me an asshole. She said, you're a freaking asshole, dude.

Can I ask you what that means?

You just— you're an asshole that just asks a lot of questions.

Okay, that's what it is.

Yeah, stop being an asshole. You just keep— you're a black hole of questions.

Okay, asshole. Okay, asshole. I'm like, okay, get it now.

So she just kept calling me an asshole. Take the action. Shut your mouth and take action. Shut your mouth and take action. You're not going to learn any of this unless you just go out and screw up. And she was the first person that told me it's not just okay to screw up, it's a requirement. And I was like, interesting. She's like, have you ever had anyone talk that directly to you? No. I was being a little sissy and didn't get in the business because I needed somebody to yell at me and tell me I was an idiot.

Like, I would even say most mentors, coaches, whatever, like, don't even— aren't even that aggressive or that straightforward.

Yeah, and she was really smart because here's how this benefited her, I'll tell you. So she saw something in me. I was a guy that showed up, I did the thing, I was consistent. She's like, that's literally all you need to be successful at anything is you show up, right? Everybody else is dumb. Yeah, I mean, we all walk— be consistent. Yeah, we walk around the world, we know people like— surprise, you look at people like, how do you live your life?

Yeah, how are you making it?

How are you making it? And she's like, you show up on time every day, like, you're going to be in the 1%. You're just putting all your eggs in the wrong basket. You're putting them into construction.

She must be seeing so many people that are just like not getting on time.

And think about every contractor you've ever dealt with. Oh yeah, it's a nightmare.

You don't even know if it'll get done, right?

So she— I'm— she meets one contractor, shows up early, gets the job done. I'm polite and customer service through the roof, all these things. She's like, you're in the wrong business, right? You do not fit the cloth. Like, you're not come from the same cloth, right? Anyway, so Janie's on the phone with me, first lead. It's like 8 o'clock at night. She goes, uh, so what do we do? And I go, I go, I don't know. I don't— I go, hold on, let me call my partner. So I get— I call Bethany on the other line. I go, Bethany, what do I do? I got a lead.

You merge it or did you just—

I just went flipped over this side. I go, what do I do? She's like, you set an appointment, you idiot. Like, go to the freaking house. I go, I don't know what it's worth. She goes, set the appointment. I'll tell you what to pay for it. I'm like, okay, great. So I'm going up to the house 2 days later, driving up there. I'm texting Bethany. She tells me, don't pay a dollar over $150,000. I was like, great. That's all I needed to know.

She gave you your price.

She gave me the price I needed. I didn't need to learn how to comp. Didn't need to learn how to do anything else. I said, what do I say to her? She's like, go to the house. And ask her what's going on. Stop asking questions. Go to the house. I'm like, wow, okay. She's like, think of it as a first date. Ask all the questions, be curious, and screw up. You're not going to get this deal, she told me. You're not going to get this deal, but you need to go and screw up and mess up and feel stupid. Yeah, okay. Go to the house, go through the house with Janie, or go into, into the kitchen basically. You know how you like go into somebody's house on the appointment, go straight to the kitchen? It's like weird how they take a seat. Yeah, yeah. I look at the counter, it's full of postcards, letters, everything you can imagine from other investors. And I'm like, I ask one of the greatest questions I've ever asked. I still ask it every day. What's kept you from selling the house? Like, you obviously have other options. What's kept you? She says, I've got an offer at $165,000, but I need more because I'm a retiring schoolteacher and I need all the money I can get to move and retire and utilize this money for other stuff. And I go, okay. And internally I go, I can't help this lady. I'm out. Like, how do you bridge the gap between $150,000, the number I was given, and she already has a solid offer at $165,000? How do you bridge that gap when you're— might as well be the Grand Canyon?

Yeah.

After a couple of minutes of chit-chatting and getting to know her and all that, I go, well, to be honest with you, I don't think I can help you. And she's like, well, why? And I go, my offer is way below that. Like, I, I, I would be disrespectful for me to give you a number. She's like, just give me a number. Stop being a salesperson. I'm like, I promise you, I'm not a salesperson. I'm inadequate at this. I'm newer. And I can tell you, I'm just— there's no way I'm giving you this number because you deserve more money. And she's like, okay, what do we do now? I go, I guess I leave. So I'm walking out of her house, I'm in the doorjamb, and I turn to the left of her and I go, you know, I'm about to leave and I'm standing in the threshold of the door. And I go, is there anything else I can help you with? She's like, what do you mean? Like, you want to help me, but you don't want to buy my house? I'm so confused. Like, what game are you playing with me? This lady just thought I was playing a game.

Yeah, yeah.

And I go, well, I can't help you, but I have a construction company. And I have a lot of guys that could come in and load up a truck or, you know, pack boxes for you, whatever you need help with. You're a single lady, you know, raising a grandchild. All this stuff is going on. And she's like, wow, you actually paid attention. I go, yeah. She's like, you really do want to help me? I go, yeah, I want to help you. She was like, I got this really weird thing. It's like, it's really weird. You really want to help me? I go, yeah. She goes, okay, follow me. She takes me into her backyard and she opens up the sliding glass door. I mean, this house was so rickety, like she hadn't done anything since the '70s. So like, as she slid the glass door, it was like that. Like, yeah, the wheels were broken at the bottom, right?

It's like that. I've seen that.

Yeah. So I'm walking the backyard and she shows me 3 Flemish bunnies. Do you know what a Flemish bunny is?

I do not.

They're the size of a 5-year-old child, a bunny.

Oh my God.

Massive. Like, they're this— literally this big or larger. Wow. She's got 3 of them in her backyard.

That is— and I bet they eat like crazy.

They do. And they're eating her out of a house and home. She's like, I can't retire with these and take them to where I'm going in Oregon. They're gonna— they cost me $400 or $500 a month in vegetables and all this kind of stuff. Stuff. I'm like, where do they come from? She goes, my granddaughter won them in some like raffle. When they came to the house, they were this big. We thought they'd be the greatest things, and then they grew into these Flemish bunnies that are massive. If you guys are watching this, Google the word Flemish bunny and you'll see a grandma holding a bunny that's the size of a human, right?

I've never—

I—

that sounds, uh, kind of scary, to be honest. It's that big of a bunny.

It's like from a freaking haunted movie. Yeah, a Nightmare on Elm Street type of stuff.

Gosh.

So she goes, my problem is I need to rehome them, but I can't just give them to anybody. And do you know anybody that you can help take these bunnies? I go, yeah. So I call my mom on speakerphone. Really? I'm in the backyard. I call my mom on speakerphone. My mom shows up 45 minutes later in a truck, and she takes the 3 Flemish bunnies. By the way, I've never seen this truck before in my life. I have no— my mom's just a resourceful gangster. She had 12 kids. She's just a doer. She shows up. Janie, great to meet you. Let me take these bunnies. I'll find somebody at my church that will take them. We have a lot of people out there that have farmland. We'll find a home for these bunnies. Amazing. This lady's like crying. Oh my gosh. Come to find out, she already retired from the school district a year and a half ago prior, but was so afraid of letting go of these bunnies. It sounds silly.

Yeah, no, this is real stuff.

But she'd been putting off selling her house for a year and a half until she figured that out. Like, that was the underlying problem. That was it. That was the problem. So I go, all right, sounds great. My mom leaves. I then tell Janie, I go, all right, good luck selling your house. She's She's like, you're literally not going to give me an offer? I go, Janie, my number's way too low. It's not going to make sense. She's like, just throw out a number. I'm like, I'm not going to even throw out a number.

Yeah.

Wasn't playing games. Literally was not playing games with her. I just did not know how to get down to $150,000. Didn't know how.

Of course.

So she's like, all right, great. And I go, if you need anything else, let me know. 2 weeks later, I get a call from her and she says, hey, today's the day I'm making a decision to sell my house. It's on my calendar. I gave myself homework just like I did with my schoolchildren that I taught. Gave them all homework, and my homework says I have to make a decision on who I'm selling the house today. And I made the decision. I'm selling the house to you. I go, I haven't even given you a number. And she says, whatever your number is, I know I can trust you. And I go, why? She goes, because I thought you were playing me this whole time. You haven't called me in 2 weeks. You truly did not think about you. Oh, she'd been thinking about it. And she said, I met with 15 people before you and 15 people after you, and you are the only person in 30 people that actually asked me, is there anything else I can do to help you? She says, you're the kind of person I want to do business with. And I said, my number is significantly lower.

Okay.

And she goes, like, what are we talking, like $120 grand? I was like, no, $150. She's like, come up here, I'll sign the documents.

Wow.

I don't know how to sign paper. I don't even know where to get a contract from.

Yeah, yeah, for sure.

So who do I call? Bethany.

Yeah, Bethany.

I call Bethany. Bethany's like, great, come pick me up. We'll drive up there together. So I get in the truck, drive up there. She walks through the paperwork with me. She talks to Janie. This is what we're going to do. Here's the steps. You know, here's— we got 3 weeks of escrow. We got this, this, and this. And I'm sitting here going, how am I going to come up with $150,000? Like, I had no idea about hard money. I didn't know how to wholesale. I didn't even know the word really wholesale meant truly.

Of course.

So we leave the appointment and Bethany says to me, that was one of the most valuable lessons you'll ever learn in real estate. And I go, what? And she says, it's never about the house. The reason this lady sold to you is because you found her bunnies, you found her problems, you found the thing that nobody else was willing to even uncover. And now I look back at my real estate career You know, we have 2,100 doors in our portfolio. I've literally never had a deal that we didn't uncover somebody's bunnies. And I was— we got somebody in the live studio today. I was telling Landon Moore a couple days ago, like, the more you're in this business, you want to go back to the basics over and over and over to remind yourself it truly is like, what is the actual pain? Yeah, stop trying to negotiate the deal. Find the pain. The rapport will usually work it out for you. And what Janie said is, she says— not Janie, but Bethany says, I want you to remember for the rest of your real estate career, you need to find the bunnies whenever you're having a hard time on any real estate deal go, have I found the bunnies? Have I truly found the bunnies? And I go, okay, this is great lesson, I appreciate it, but what the heck am I gonna do with $150,000 contract? She goes, you're gonna assign it to me, you idiot. I go, assign it to you? What does that mean? She, oh my gosh, have I taught you nothing? I go, we've never talked about assignment. She's like, okay, what we're gonna do is this contract, you're gonna sell it to me. I'm like, how is that even possible? So she walked through an assignment contract and she bought it from me at $175,000.

Wow.

I go, you would have paid $175 this whole time and you told me I went through this whole thing. She's like, did you learn stuff? I go, yeah. She goes, I— this is why I'm a good mentor, is because I force you to learn the things you have to learn. So I made $25 G's.

It's amazing. Without even having to pick up, uh, kind of the tools that used to, right? Having to do the construction, nothing.

And I basically— the way I looked at is I made about $7,000 an hour that I put into that one deal. $7,000. It was like 3.5 hours I spent on that deal. Made $25,000. And I'm like, where have I ever spent 3.5 hours of my life, like, actually on a deal, anything, that I've made $25,000? Never happened, right? So I did that.

Pretty generous of her too, right?

She could have came in at you and kind of got a 160. Well, you know what's funny? Here's how bad my mindset was. I made $25,000. I was like, that's amazing. I immediately thought, I'm going to take that $25,000, I'm going to put it in my, my construction business, and I'm going to reinvest in my construction business, buy more equipment, hire more people. And so I go, I'm so— this is amazing because now I get to do the renovation on the property. She's like, oh no, you ain't touching it, buddy. You're fired. I just taught you how to get a real estate deal. And the first thing you can think of is how do you get in there and do the renovation? Like, think about the mindset of what I had 10 years ago. So blue collar. I'm going to go after and do the renovation. She's like, I just taught you how to find, negotiate, get a contract, assign it, make $25,000. And your first thing is you want to get back on the construction site. What the hell is wrong with you? She wasn't wrong. It took me 3 more years to, you know, I did hundreds of deals. I was already building a brand around myself. But for 3 years, I kept running my construction company simultaneously while doing my real estate business and built a portfolio of like 43 rentals during that time using creative finance. I used— I learned creative finance within 2 weeks of starting in this business. Amazing. Which is amazing. Most people go through like 10 years of just wholesale and BRRRR strategy. What it was is I had a lady named Eileen Brown. It's always a woman for me that's changing my life. My third contract I opened escrow on that month, I made $50 grand my first month. I got 3 deals, assigned all of them to Bethany.

Oh my.

Yeah. And Bethany just walked me through it like a good mentor. She's amazing. And then she says, go use this title company. I use this title company. It's Eileen Brown. Eileen Brown had been doing creative finance for 41 years.

I think I met her last time I was in Phoenix. Is she still doing business?

Yeah. She called me a month ago and she's like, because of you, I cannot quit my business.

Yeah, I met her. She's, she's awesome.

She's amazing. So she's been now in the business at this point, 51 years in the business.

Yeah.

So So she tells me, what are you doing with all your other leads that you're not able to close? And she sat down and taught me sub-2 and seller finance, novation agreements, and whiteboarded with me for weeks and weeks and weeks. And I'm like, why does— why do most people not teach this? She said, people do teach this, but typically, this is again 10 years ago, creative finance mentorships are like $50,000 and they're really hard to get into because she taught me something that was so valuable. She said, they make the water muddy so you think it's deep. And I'm like, wow, that's freaking— what do you mean by that? She goes, they— everybody makes creative finance seem so challenging so it keeps you away from it.

Really?

She says, I've been waiting for somebody to come in and normalize the conversation about— around creative finance. And I said, Eileen, mark my words, I will be the guy that will normalize creative finance in the United States, and I will shout your name from the rooftops over and over and over and give you all the credit. Right now, it's what we— our whole community is doing. It's been amazing watching our community lead every single state in terms of creative acquisitions and title and escrow officers are like, we love your people. That all came from Eileen Brown, actually Bethany Willis taking an interest in me, becoming my mentor, walking me through step by step because I'm an idiot. We're all idiots. We need somebody to walk us through step by step. She then— what was funny about Bethany, and she said, you don't need me anymore. You need somebody bigger. I'm a small player. I'm like, don't leave me. She's like, nope, you got to go hire another mentor. It's time. And then, and then after that guy, 6 months, hire another one. After that person, hire another one. You'll never be done learning. She says you should spend 10% of all your income from your business reinvesting in yourself, going to seminars, reading books, going to masterminds, this, that, and the other. Mike, what's a mastermind? Didn't know any of this stuff.

It's all new world for you.

Whole new world. And that first year I made half a million dollars take-home. But again, I was also making $1 million a year as a contractor. So you can see my conflict. Yeah, my conflict was like, well, how do I let go of this? To focus on this. The way I went full-time in real estate was years later, finally I had my biggest client file bankruptcy in my construction business, and I lost everything in my construction business. He owed me millions of dollars. I lost everything. I had to sell all 43 of my rentals to recover from it, and I had to start all over. Was that 2018?

He lost everything and affected you?

Oh, affected— he— I was, I was pouring money in his job, so he wasn't paying me on my construction until he sells the house. So I would front all his construction. I mean, we're doing 10 houses a month. Yeah, talking millions of dollars. He filed bankruptcy on $16 million.

And that means when he files bankruptcy, that everything he owes me is gone, and he doesn't pay you back or anything?

Never, nothing, no payment plans, nothing. He filed Chapter 13. He's done, gone, bye.

Gosh.

Me and 42 other people lost $16 million combined. Yep. So it— but it was the greatest thing that happened to me. It came on September 20th, 2018.

Did you feel like that though when it happened, the greatest thing that ever happened to you?

I think at that point I was mature enough and I had momentum enough that I go, this was Heavenly Father, God, the universe, Buddha, whoever you guys believe in, telling me I was an idiot for the last 4 or 5 years. Just focus. I wasn't focusing on the thing I was getting really, really good at.

Gotcha.

My mindset was I believed in other people's businesses so much that my construction company was this mindset of other people are going to take care of me, they're going to go buy houses, and I don't have to worry about if I screw up in my real estate business.

Got it.

And finally, the universe is like, we're gonna make you lose everything. So 64 months ago, I had no— I didn't even have $2 to rub together. Lost everything. I didn't file bankruptcy and I rebuilt it. And in 64 months, we now have 2,100 doors in our portfolio.

Did selling everything, did it get you like breakeven or were you still in debt after you sold all your rentals?

And it got me to breakeven. Basically what I used those rentals for is I called Jamil. This is an interesting part of the story is I did my first 100 deals without ever comping a property. Not one time. Now, I left a lot of money on the table because I would go to Jamil or other people and I would go, What would you pay for this? And I would just go find the bunnies. And I got so good at just finding the bunnies. He dispo'd them. And he took 5— he was taking for the first year, he was taking like an average of $8,000 a deal. And we did 100 deals together.

You're probably at that time like cool with that. You're like, oh, focus on the bunnies.

And you, bro, if somebody's going to get me through another deal and that paradigm shift and put money in my bank, we're going to get the next deal. Next deal. Next deal. Really wasn't even about the money I was making. It was about me becoming so good at this one skill of finding the bunnies with every seller. And really perfecting my creative finance. And then I started doing deals in other states and learning other states' stuff. I started hiring attorneys to teach me about creative finance because I learned all the gurus in the creative finance space were guys that hadn't been doing deals in 10 years.

While you're doing those 100 deals, are you doing the negotiating or—

All of it.

You did it all. You didn't hire like acquisitions?

I didn't hire acquisition people until 2018. I linked in with my partner Cody at the time. When I went full-time, I said, all right, I'm going to— I'm going to go full-time real estate. Literally 5 years ago. Yeah. And I need a partner. So I brought in a partner, Cody Barton. He's amazing. He's the counterbalance, right? I'm the visionary, big idea, go negotiate, close deals, raise money, do all the things, attract talent to our company. He runs the back end, the employees, all that kind of stuff. And so we hired acquisition people. We had them for like 3 years, and then about 2 years ago, I'm done with acquisition people, right?

That's one thing I've noticed. When you were doing the negotiating, you were probably extremely good. Obviously you're good at finding the bunnies, but when you try to scale that out, sometimes those people don't They just want to—

it's just a— here's the thing. It's an acquisition-minded person. Yeah. They— what does that mean? They all want to own their own business. And so what happens is in that, like, my title and escrow business, my escrow officers that I have on the team, they'll never leave the company, right? They'll be there for 35, 40 years. It's not in their blood. That, that type of demographic does not go, okay, I figured it out. I'm going to go start my own title company. Very rarely does that happen. In acquisitions, it's like the opposite. It's like very rarely will you have somebody go, Well, what do I need you for anymore?

Yeah, they're not like, I want to work acquisitions for you for the rest of my life.

They want to own their own thing. They're watching my YouTube channel. They're watching Jamil and Jerry's YouTube channel. They're watching podcasts like this and they're like doing acquisitions for me in the day and then working their own deals. My last stroke, like I could talk about this for hours.

Of course. Yeah.

But I had acquisition guys that were working for me Monday through Friday and they would come into the office on Saturday and Sunday and act like they were working for us and like catching up on hours. They were just calling my leads on Saturdays and Sundays for their own business. My business. My gosh, this went on for like 6 months, and I'm like, I'm done with Americans.

Yeah.

So now I have nothing but Filipinos on our, our acquisition side. Now, on my multifamily business, we now have a little over 1,000 multifamily doors. I have a full-time team, 6 people. Multifamily is very different because I can give my multifamily acquisition guys a portion of the equity on the deals, and they're large enough deals that they make sense for those guys to stick around.

They feel like they're building something versus—

Yeah. And I'm not involved in that business at all. I mean, I am when we're raising money for the fund. I'll raise money for the fund, But that business, it's a 6-man team, will buy $40 million in real estate this year just on that team. We just launched it maybe 8, 9 months ago. And then this year in 2024, we'll probably buy another $80 or $90 million in real estate. My goal with that business is to have $10 billion in assets in the next 15 years.

Okay.

With, with just that team.

It's incredible. To what end? Or do you have like, once you get that, do you want to do more? Is it for some sort of goal you're trying to accomplish?

Like, the goal is to be worthy of somebody. I want to be worthy of obtaining a billion dollars, not get a billion dollars.

Okay.

I want to be worthy of it, which means being a great leader, having employees and team members that their lives are enriched by us. I mean, it's every time you hire somebody— I've been telling this story the last couple of weeks over and over— had an employee named Alyssa sends me a group chat with all of our leaders. She says in the group chat, with, you know, hundreds of people. She says, Pace, thank you for dreaming so big that my dream can live inside yours. And I was like, wow, that's, that's powerful. So when people say, what are you trying to do? I'm like, I have a responsibility. I have plenty of money. I have plenty of assets. I don't need to make another dollar as long as I live. I, I'm good. I mean, we have $450 million in real estate in our portfolio. Yeah, you're good. I'm good. Yeah. Like, think about if all that—

a long time ago, I was good a couple years ago.

Yeah, like maybe nearly 4 years ago. Yeah, yeah. Yeah. So the goal obviously changes because you want to hire more people and help more people and all that kind of stuff. But you realize you were put on this earth at some point for a purpose, and the purpose was not just to take care of your family. At some point, it's like, that box is checked. I'm done. Yeah. What do I need? My wife can only drive one car. She can't drive four cars at a time. Okay, so we don't need more cars, we don't need more houses, we don't need more whatever. And really what it was is realizing people are making decisions to have babies, get married, buy their own houses, go on vacations, invest their own money in other things because your stability and your business that you built.

Yeah.

And you're okay. I have a purpose here on this earth. Somebody put me here. Take care of your family as quickly as possible, then quickly go out and try and take care of other people's. So when I have a family meeting in my family, we're talking— my kids, 16 years old, 5 years old, 1, 2-year-old daughter, she has no clue what's going on. We are talking about other families that we're impacting. And our goal next year, for example, goal for my kids is we're— our goal is to get 50 families off the street that are homeless. Because there's all sorts of crazy statistics talking about how 1 in 30 kids are on the street in the United States. 1 in 30 kids are homeless. These aren't drug-rattled, like, fentanyl situations. These are families that are working at Walmart, Target, single mom who's making $18 an hour who can't afford rent.

Yeah.

Okay, so how do we go after that? Our job is to go buy real estate, figure out how to make it affordable, work with charities. There's a couple charities we're working with. One's called Family Promise. They help working families, non-drug-related, situations to get into the houses that we as investors go out and get.

That's, that's definitely a mission.

It's a mission.

That's a mission.

It's a mission. And so I think our community, our real estate community, will probably get close to 2,000 families off the street next year by working with this charity. And when you show your kids, this is what we're doing, this is why we're buying real estate, is to benefit other people. And like, cash flow is no longer the goal, right? So I just want to become worthy of that. Thing, the billion dollars, would it change my life? Will it open up other doors? Yeah, I think to a certain degree.

Yeah, it's interesting what you're talking about because when you say billion, I think of the money, but you're not thinking— it doesn't seem like you're thinking about the money. You're thinking, you're saying, what could that help accomplish when I get that?

Like, kind of, but like, also the best people I've acquired on my team and attracted to my team were when I did some sorts of sort of personal development. I learned how to be a better leader. I learned how to do this. I got rid of a bad habit. I got rid of some bad branding or something that wasn't really in alignment with other people, and I fixed things in my ecosphere, and all of a sudden, magically, the best people start going, hey, do you have any open positions? I'm like, why was it so hard to hire people for all these years? And now it's like people are clamoring to come work for us. Personal development.

Yeah.

And as we work on ourselves personally, all of these other opportunities that you didn't even think existed start coming to you. So really saying I want to be worthy of a billion dollars is just saying I want to be worthy of being a leader that attracts amazing people, amazing opportunities, open doors I don't, I don't even know exist. It's basically unlocking a secret level in a video game you don't know exists. You know there's a secret level. Yeah. But you don't know what it looks like. And so I know there's a secret level that I'm not aware of. I just am not worthy of that level yet. And people— I had— I was on a flight. Steve Harward, who is a mutual friend between us, he's got a jet, calls me up, he goes, hey, you want to be on this jet? I've got a bunch of like heavy hitters on this jet. I go, okay, cool. Jump on the plane with him. We're flying, you know, maybe a 2-hour flight. And I'm talking to the guy across from me. I go, what do you do? He goes, I'm the guy that's behind some of the biggest deals you've ever seen in your life. I'm like, real estate deals? Yeah, kind of— he's like, I'm the guy that's taking the Anaheim Angels and getting them to move to Vegas. I'm like, what? That's a big deal. That's like not something you learn. Is that a job? Exactly.

Well, I didn't even know that existed.

And he said he's here in Utah.

That's amazing.

And I go, is that all? He goes, no, I'm also— I'm negotiating with this senator to do this for this state that will allow for this big thing to be built and blah, blah, blah. I'm like, so what's your job title? He goes, I guess I'm like the fairy godmother to a lot people. Wow. I go, where have you been my whole life? What a great, amazing relationship that I've been able to obtain today. Thank you so much. I'm so glad we bumped into each other. I go, where were you my whole life? He goes, you probably are going to be offended by this, but here's the answer: you didn't deserve to meet me until today.

He said that to you?

Oh yeah, straight up. He said, what—

not with pride, I'm assuming. He probably was a really humble guy.

He said, you must have been learning or working on your leadership that allowed somebody to invite you to be on this plane. They thought you were worthy of this, that then put you in the same situation. He goes, I'm asking the same question, like, how am I, you know, so lucky to meet you? He's like, because we're personally developing and we finally showed people leadership and showed this and showed consistency and wherewithal long enough that people, oh, that's somebody I can invite to a thing and a gala and a charity thing and a blah blah blah. Next thing you know, you're in rooms that have nothing to do with real estate because somebody invited you because you showed them something that you developed on yourself. Leadership. You went to a seminar, you read a book, you got better at this, you acquired better people. You solve the problem and people— it's, you know, and all I— at one point I was like, I'm just getting in this because I just want to get a deal.

Yeah, you know, it's amazing. Well, ever— you know, we'll wrap it up because I know you got to get going, but everything you said is, is, is— the story is incredible because it's— I've seen it in the lives of other people I've interviewed. It's like, you know, they first start off with trying to get that deal, but then their leadership skills eventually get them to a level where they're— it's past the deal, right? You still want to help people because that's like what, what it's all about is the emotion, the emotional income.

Once you start getting emotional income coming in your life, it's, it's— I call it the help— the helper's heroin or the helper's high. When you start helping other people obtain— like, think about what Bethany got when she helped me get my first deal, right? She still texts me all the time.

You know, she saw something in you, right, where she felt like consistency. Yeah, right.

She saw consistency and was like, you're somebody. Now, Bethany and I did like 30 deals together in our first year, and And I ended up actually buying her business from her on seller finance. So she was a HomeVestors franchise, right? The we buy ugly houses people. So I bought her business for $135 grand. I go, I don't have $135 grand. She's like, why don't you have— you're making all this money in your construction company. Yeah, I reinvest it. She's like, you need to fix your financial literacy. You should be investing outside of your business, pulling money out. I didn't know what that meant. Took me years until I was ready to hear that. And when I finally was ready to hear that 3 or 4 years later, I look back and go, oh my gosh, Bethany was telling me this, but I wasn't ready for the information. And that's what I'm talking about with personal development. I want to become worthy of somebody worthy to get $1 billion because there's things that in my life right now I'm not ready to hear. Yeah, right. I wasn't— definitely wasn't ready to hear them 10 years ago.

You weren't ready for that airplane when you first were trying to get your first deal?

Hell no. So a lot of people ask me, how do I get on those planes? How do I get around those people? I'm like, oh, bro, it's a journey. It takes 5, 6 years of consistently showing up thinking nobody's going to believe in you, nobody's going to do anything. And then finally me, the only thing I have as my advantage is I'm a cockroach. I outlast everybody. Like, you, you can kill a dinosaur, the dinosaurs don't exist anymore, but cockroaches do. That's funny. I'm a cockroach. I just outlast. That's it. I'm not better than anybody else. I just am a freaking disgusting—

You got Brent's rhino, you got the cockroaches.

There you go. I love it. So Bethany, she goes, I want to get out of the business, my husband and I are retiring, do you want to buy my business? I go, I don't have $135 She goes, buy mine. I go, I told you I don't have it. She goes, yeah, but you already know Creative Finance. Why can't you buy my business with it? I'm like, I can buy a business with Creative Finance? So I bought her business for $100,000. I've actually never told anybody this story because I don't know that anybody even cares. No, this is incredible. But I bought her business for $135,000, $0 down, $0 interest. She let me pay her like $20,000 a month from my deals.

Really?

Oh, it was the greatest thing. It was just like, here you go.

Incredible.

Yeah.

Own a business like that. I'm sure it was pretty well-oiled.

It was, it was okay. I mean, it was a, it was a small mom-and-pop business. I learned a lot. And really what it was is I owned the Phoenix territory for We Buy Ugly Houses for 4 years.

Incredible.

And I, that opened up doors for me. And then I became well-known and started getting on podcasts like maybe 5, 6 years ago. People would ask me, will you come on my podcast? I go, why do you want me on your podcast? Well, because you're doing 12, 13 deals a month. Like, I want to talk, how are you doing this? I go, you really care about that? Okay. Yeah. And that came from Bethany giving me an opportunity because I showed up and I did the thing and just doubled down, kept doing the thing, kept doing the thing, kept doing the thing. Still to this day, it's all I'm doing. Like, I'm here in Utah right now with Landon Moore, who I referenced a couple of times. I don't know if the camera can see him, but I'm just flying around the country buying deals with people now.

Incredible.

It used to be an Arizona thing. Now I'm like, okay, 30%, 40% of stuff I'm buying is in Arizona. Now everything else is all over the country. I'm in 21 states. And made the decision today that I think I'm going to pause on single family for probably a year. We just started buying RV parks and like 50-unit to 150-unit multifamily stuff, all in creative finance. So I think I'm going to focus on that for the next couple of years and really just allow— I think what's going to happen in 2024 is interest rates are going to come back down. And I think the market, anybody that's been holding properties like a guy like me, 2,100 properties, 2,100 doors, what's going to happen to the value of my properties? They're going to go up 10, 20, 30% maybe in the next 24 months, I hope.

Yeah.

And if they do that, I'll refinance out $40, $50 million, put in a lending business, just rinse and repeat, do it again, do it again. And you know how it is, it's like you just got to show up every day, do the crap. I see the biggest problem with a lot of people is they go, oh wow, I found something that worked, I got 4 or 5 deals. You know what they do? They go, all right, time for the next thing. It's like, no. Yeah, Subway Sandwiches doesn't go, all right, we did sandwiches, we sold a million, let's start selling hamburgers. It's like, no, they perfected the thing, build a machine, get employees to run the thing, Yeah. And I, you know, I have great partners that allow me to do that. But anybody that's out there, you got to get to a point where you do a couple of deals on your own. You then get to a point where you might have somebody you collaborate with. You get to 3 or 4 deals a month. You do that maybe for a year or 2. And people don't want to hear that.

Yeah.

People, all right, next thing I want to own 1,000 doors like Pace. It's like, dude, you don't understand. The journey was 10 years.

Yeah. And it's not just you. You got a massive team behind you and all these people think they can do it themselves.

You could probably do it in 5, but you're definitely not doing it in 12 months. Yeah. And you're not going to do it after reinventing every 3 months and going, all right, now it's time for for something different, like, oh my God.

And from what you said, maybe they're not ready for that yet. They're not ready to handle that because they got to improve themselves. So one thing we want— I want to ask you, you can leave the listeners with, because most of the people that watch this are probably in their first deal stage, right? They're trying to get their first deal. What piece of advice, what's one thing you could tell them? Because we have talked a lot about leveling up, right? Who you are so you can handle that. What's one thing someone could do, actual item they could do today or this week that could help them begin that trajectory towards, you know, leadership, towards leveling up.

All right, so when I was a contractor, one of the reasons I couldn't get into real estate for 7 years wasn't because I didn't have books or YouTube or these things or 3-day seminars, stuff like that. I had all of those things, but what I didn't have was an actual friend. I didn't have somebody that I could collaborate with. It's like, remember when you're in high school and your parents would be like, all right, your freaking, you know, curfew is at 10 o'clock at night? Yeah, you'd show up at 10:30, 11 'clock. Um, Mom and Dad, I'm so sorry, I lost track of time. You ever tell your parents you lost track of time?

Of course.

Okay, create an environment in real estate that you lose track of time because you love being with the people that you're working with. And that's not saying go get partners and go get employees. I'm saying make friends. Like, Landon Moore and I travel around the country, we go hang out with each other. Him and I are not partners, we're just friends collaborating. He's building his business, I'm building mine. That is the greatest thing ever because now the conversations between point A to point B— let's say I'm going to Starbucks with Landon We're not talking about wasteful stuff, which is probably the number one reason I was having a hard time. Not probably, the literal reason why I was having a hard time getting into real estate is because all my friends were contractors. I was talking about what drill is a better drill company than, you know, DeWalt or Ryobi or whatever. That's the conversations I was having. Which left me with the energy that I had, which was, oh yeah, I'm a contractor, I'm a contractor, I'm a contractor, the identity. Entity. So what I would do is I would go to meetups, I would find people. Guess what? How did you make friends with the people you went to high school with that you ultimately lost track of time with?

Spend time with them. You spend time with us, you sport—

locked next to them, your sports, you whatever. The way we do it now in real estate, it's a meetup.

Same thing.

Go to a meetup, link in with 5 people, you'll like one of them. Go to another meetup, do it again. Another meetup, do it again. 120 days later, 4 months later, you'll go, I got I have badass friends I love spending time with. They're all doing a couple of deals a year or a couple of deals a month. And then guess what? Your job is to then try and level them up by saying, let's do more deals together. Let's do this. Let's do that. A year later, if some of them fall off, your job is to refill them with people that are bigger than you. I'm at dinner with Grant Cardone. Like, this is like going from first deal to now I'm at dinner with Grant Cardone a couple of years ago. And he says, how much money do you make? Which I love. I love that conversation to, you know, if you were in private settings, how much money did you take home this year?

Right.

And I tell him, and his response was, why so little?

To roast you.

I go, damn. All right, Bethany, just punch me right in the face. And he goes, I go, I guess I just got to level up. He goes, no, you don't. Your friends that you're with are always the people that level you up.

That's amazing.

He says, you need to hang out with people that are making double what you're making. Otherwise, you're going to be stuck right where you're at. They have different conversations, different ideas, different this. They, they behave differently. They treat people differently. Everything about their life is different. Even going to dinner with people that are making $10 million a year is a different experience than going to dinner with somebody who makes $100 grand a year. It's a different experience. Even if you don't talk about real estate, just the experience you get, right? The environment, the confidence. And then, you know, when you're around a really confident person, they give you confidence.

They feel confident right now.

Yeah. Hell yeah, bro. So that's the answer. People don't want to hear it. They're like, oh, okay, I got to make friends. But what about the information? Guys, I did my first deal never comping. My first 100 deals, I did not comp a single property. Didn't know how to fill out the paperwork, didn't know how to comp anything, didn't know what an assignment was, didn't know how to negotiate. I just had a friend, Bethany, that literally filled in my gaps.

It's amazing.

So, you know, joining a community, joining a Facebook group, getting— and then physical proximity is very important. Human beings are meant to be connected. Zoom is okay. It's a great appetizer. It's a great, like foreplay, but at some point you got to have physical contact.

You do.

Yeah.

You know, and it's interesting, I was talking to Brent Daniels about this the other day. It's like the information's out there, right? You, you talked about it even when you started. It's about the community.

Yeah.

What you have at Sub2.

Yeah.

So that's— it sounds like that's what really helps you level up, which is amazing to hear that.

I level up inside our community. Like, it's crazy how much I learn inside of our community from other students that are doing deals. Like, Landon and I were talking about one of our fellow students— I'm a student inside of Sub2 just like anybody else— Matt bell shows up consistently, but he brings something completely different to the table. He's like a top lender in the country, talks about DSCR loans and how do I do this and how do I help out with this and how do I get the DTI removed from the thing. And here's, here's the ways I do it. And it's like everybody collectively learns from him, and so do I. Yeah, amazing. And I'm like, I only want to be hanging out with people I'm learning from because I, I know what it felt like in my 20s where I was basically with a bunch of contractors talking about drills and what kind of wood they use for a freaking house. Great, perfect. How's it going to make me any more money?

Yeah.

And of course, money is not everything. But what did Kanye West say? He says, having money is not everything, but not having money is everything.

Of course. So anyway, so amazing answer, and I appreciate you coming on here. And just one last thing about friends is, if you do reach out to those higher-level people that you want to be around and they're too busy, or they're— they don't want— not they're saying no to you, but they're like, hey, you know, they don't have the time, right?

Yeah.

What would you recommend? Because I know people are probably going to try and reach out to people, maybe maybe that they're— I don't want to say they're not there yet, but they might— those people might not—

the message that we all— we— here's how do we message people. We message people through text messages, Instagram DMs, Facebook Messenger, email, whatever, right? Higher-level players don't receive messages through those mediums. How do they receive a message? Through your consistency being talked about in circles. Consistency is the number one attribute. You want to get somebody's attention that's a higher-level Show up for a year and have other people talk about you in those circles. So for example, you're going to a meetup, you see somebody like, I want to collaborate with you and hang out with you. Don't go up to that person. Go help somebody else get a deal in that room. Help another person get a deal in that room. Those people are going to let that person know by your actions that you are the person that they want. Turn it around on them and go, oh, I had a text message.

That's a perfect answer. I love it.

I've never talked to Sean Whalen. You know, Sean, Sean Whalen. Waylon. Never talked to him. Okay. And today he sends a text message to me and he goes, dude, I am just so curious who the hell you are because everybody won't stop talking about how you're helping their business, you're doing this, that you're collaborating with them. Why have we not collaborated? And like 3 years ago, somebody goes, hey, do you want me to put you in touch with Sean Whalen? And I go, no, because that's a, that's a referral. The only way I want to message him is through my reputation. I want my reputation to be the message he receives. Yeah. And that's the message I got this morning from him. He's like, your reputation— it took 3 years. That's the problem. Everybody wants to be part of the outcome. They don't want to be part of the process.

No, that's, that's the best answer I've ever heard for that, because a lot of people, they'll make that DM, that direct, they expect it to happen like that. But go help someone's community. Be, be, be a shining light in Sub 2, right? And so you hear about them, I'm sure you're going to talk to those people, right?

Or reach out.

So no, amazing.

Well, hey bro, bro, thank you for having me. Appreciate you.

Thanks for coming on, and, uh, see you next time.

Sam.