Pace Morby ran a construction business doing 70 remodels a month for companies like Sprouts and Zillow, hitting $1 million in take-home in 2014, but convinced himself he was in real estate. A client named Bethany flipped a property with him in 2013, then told him straight: he was a service provider, not an investor. That hit forced him to see the difference between contractors and asset owners.
We like to ask people what they did on their first deal, like how much money they made on the 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 what Sprouts is. Yeah. Yeah. And Sprouts is a big company, kind of like Whole Foods, but they're—
Oh, yeah.
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. Oh, what do you do? Oh, 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. 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 setups, 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 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. Yeah. 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, 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 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.
