21-Year Old Getting Started In Real Estate with his Dad | Real Estate Revolution Podcast | Ep 13

Coming up on this episode of the Real Estate Revolution.

It's very difficult for me because I want to keep my hands and everything to take a step back and realize for each month you take, that's the money out of your pocket. So if you were expecting to make hypothetically $20,000 and you go two or three months past that, that means you've lost $3,000 in your profit.

This episode is so full of great questions and great strategies. You are not going to want to miss this. Make sure you listen till the end. What's up, everybody? It's Steve Valentine. Welcome back to the real estate revolution. Today I've got a father son duo on the podcast and this is Hayden and Raymond and we're going to talk about all kinds of crazy stuff. And they're on the beginning journey and there's some great things that we discussed offline. So we're going to jump into this. And Hayden is just starting. He's 21 years old. He's just starting to get into the real estate aspect and, and Raymond is a aircraft tech and there's some other things they want to do together in order to kind of change the course of life. So we're going to get into this. So, guys, welcome. Thank you for being here.

Thank you.

Thank you.

All right, Hayden, how do we meet? Who introduced us?

So I met it through a family friend, actually. Her name is Aaron Willer. And I just been in the game of trying to figure out how to do wholesaling and do a lot of things and just, just figure out where I'm going and. Okay. Aaron was just my way of getting into the real estate, cuz she was getting it too. And then we started talking and then she was like, hey, like I got. I know this dude I talked to. And I was like, really? She was like, yeah, and you want his number? And I was like, she goes, yeah, I think he would match what you do because he was doing the same thing. Like, sounds like you guys are doing the same thing. And I was like, okay, cool.

Yeah.

And I got your number and then gave you a holler and now we're here.

All right, all right. So. So you're 21. Did you go to school?

No. So I couldn't really go to school. I did any or any CCC for a little bit, but I just couldn't really afford it. So I ended up going to a different way because I've always. I was ever the kind of the books kind of person. So I decided, well, I've always been hands on trying to figure out what I needed to do. So I ended up just doing construction. Figured well, okay, learn how to do it, do it myself, then that and then figure it out like legit. So figured there would be different lingo and stuff and just getting into it. So I did metal, metal roofing. Me and my dad, we did house, we did drywall. So and so a lot of things it was like I did metal roofing, did framing, a little bit of concrete. And so it's just like now I want to hop into real estate and get that going.

Okay. What intrigues you the most about real estate? Like what's the goal?

Freedom of it.

Okay.

And I love that.

What type of freedom? Like expound on that a little bit.

Freedom to be able to. Found a very big importance to me. So being able to sit at your. Sit at dinner with my family is very important. So it's like that's just how we were. I was raised and how we were so being or being able to take problems that just need to be done and solved, like my mom needs help or one.

I don't know.

I want to get my family safe. I feel indebted to my parents. I've done a lot of. Or I'm, I'm. Yeah, I've had a lot of.

Don't be getting sensitive on me.

I know I've had, I've had a lot of your surgeries in my life. I was born a little small education, stupid. So they helped me out a lot. My dad always worked. He was a very hard working man and all. I didn't see him as much, but I knew he was there. I knew why he was doing, why he was doing it. Now I realize.

Okay.

But yeah, I just.

So, so the, so the freedom to give back.

Exactly.

Right.

Yeah. I just want. Just to be able to go wherever I want to go. You know what I mean? And do I need to and, and just not have to worry about the like bills being paid? You know, like not having to worry anymore. When I get that. Yeah.

So what's, what's your overall? Like what's the goal? You talked about wholesaling. Like tell me about what you've read or learned about thus far that you're, you're kind of going down the path on.

Well, when I first, when I. So now before I did. And I. Well, because I honestly I didn't really know what a good deal was for wholesale. So everything.

Yep.

So it's just like, well, what's the good deal? Why I didn't Understand, because I was. It was just very new. It was just. How do you say it? I didn't understand everything in it, so I wanted to understand more of it. So I started thinking, well, how would a person, like, what would make a person want to sell me their house? You know, like, if I want to buy a house, I want to make sure, like, it's a good deal or it's going well, but it's like, well, how do you have, like, how do you get someone to do that, but do it to where it's not like you're trying to pull it out of them or, you know, or. Okay, just a job.

So let me, let me rephrase that. Let me rephrase that question for you. You want to find a way that you can problem solve for somebody and make it a win win for everybody. Correct?

Correct. Okay.

That, that, that is the key to all of this. So, you know, getting somebody, getting over the mindset of trying to get somebody to sell your house is the mindset. You got to, you got to toss that. That's not what we're doing. The goal and what you're talking about is we have to get to the root of the problem with any seller, okay? And what I mean by that is, you know, I go into houses and I look at them, and sometimes the root of the problem is, is that the house needs so much work they have no money to put into the property, nor do they have the time to put the house on the market and go through the process, okay? And so we need to get to the root of the problem in order to solve for that person. And once we do that, that's where the win win comes in, and that's where you find a deal. And I also want to define something for you. Everybody in this business talks about deals. Nobody actually knows what a deal is because a deal is different depending on how you look at it. Every property is a different type of deal. Now, see, some of the things that I believe you've probably educated yourself with is the deal of flipping or investing. And most of the time in flipping, the deal is, well, I got to buy something at 60 cents on the dollar or after the repair value or these types of things, right? Those are the deals that people are looking for. The reality is, is if you can look at not what you see, but what you don't see and what nobody else sees, that's actually where the money and the freedom and the future is going to come from.

Okay?

Does that make sense?

No, that really does make Sense. Okay, okay.

So I'm going to give you a quick example. So when I look at things and I love utilizing this example because we're just now starting down the road of this, but we're starting to look at a lot more manufactured homes because all of a sudden I realize I can order a manufactured home. It's completely built, it's in good condition, it's brand new, I can have it delivered in 90 days. So now I'm looking at land and potentially knock down manufactured homes that are, you know, in the 70s that are, you know, they're pieces of junk. But we're starting to look at those as that's a potential deal. And the other thing, part of deals is there's three ways to look at something and a deal will either produce short term income. Right now it will produce midterm income. So if you have to flip it, you have to put money into it, you, you might make a profit that's a little bit more of a gamble or it potentially can produce long term gain by holding as a rental property. Have you done any research on like the rental property type stuff or are you just looking at the flipping, wholesaling aspect?

No, yeah, I do. I'm doing, I want to do another thing as well as called bnb. Airbnb pretty much is renting out property and then paying the rent and then just pretty much being the perfect tenant. So I've been on the air DNA and browsing out as well. I'm trying to hop into both at the same time really, but.

Okay, well if you didn't know, I've released my first book and published it is available on Amazon. Limitless Real Estate Strategies. I wrote this for anybody in the real estate business. I don't care if you're a real estate agent, lender, wholesaler, investor. This will help you change and break some myths that you think are out there. It will also change change your life, change your legacy and ultimately help you build wealth while creating win win strategies. So pick it up on Amazon today. So have you stayed in a V? Oh, go ahead, Raymond.

I mean, just snipping in because him and I differ as an older gentleman, like I said, I explained to you my past and I'm very, I'm more of a calculated person. I'm to the point in my life now where I have a, a set of income that I, it's, you know, I'm not gambling with the grocery money. So I, look, I, I'm trying to explain, to help him understand long term as well. But sounds terrible what I'm about to say, but I don't know, I'm hoping you can answer. This is a him and I were you're talking about deals I'm looking at. I've always looked historically like the Walmart brand. If I can sell 15 houses and make $15,000 a piece, that's still a win. You know what I mean? I find somebody because I talked to his younger buddies and things like that. They're looking for the boom, they're looking for the feel, you know, the looking.

For the home run.

The home run, there you go. The home run. And my thought would be, is like, I'm looking more long term. I'm 45 years old. I believe I got a good, good couple years left in me. But what are your thoughts on long term versus short versus what was the other one you said? Short and then long term and then the medium, whatever. But like, what are your thoughts on all those?

So there's a number of thoughts. You need a combination of all of those. So the combination is, you know, let's just start with like the easiest thing that Hayden can do right now that either one of you can do. The easiest thing is basically, and I hate calling it the wholesale side, but it's understanding the market, finding a seller that has a problem, and getting paid to connect the dots. That's what wholesaling truly is. So Hayden, if you go out tomorrow and you meet Jeff, an 80 year old guy that owns a mobile home in Flagstaff, and you talk numbers and you get close to a price and you call me and you say, hey, Steve, I got this guy, the house is terrible. He wants to get out of it. He needs cash. Here's his time frame. Is there anything we can do? And I say we because this is where we connect the dots. This is where we kind of change what typical wholesaling is. Because typical wholesaling is, is Hayden, you go sign that document or a contract with Jeff and it's really not a great deal. But you got him to say yes, which is great, but you didn't negotiate it to a point that it does make a good deal for somebody like myself that's an investor. So what happens is you can't find somebody to buy it and you end up canceling on Jeff and you've gotten his hopes up and now you've let somebody down. It doesn't create a win win. Right. So the goal for you is to have a resource to say, okay, I've got somebody that I'm talking To, here's kind of where they're at, numbers wise. And here's the questions I've asked. Is this something you'd be interested in? Right. So, Raymond, like you said, it's finding the, you know, one and two base hits at this stage in your life that's going to start creating income flow because you're going to need income to invest in other things. Now there's, there's crazy creative ways of buying things on seller finance and all that stuff, but it's going to take a little bit more education to get there. But right now you have one thing that someone like myself does not have, which is time. You have time to go make connections and stir up the pot until something boils to the top, right? And that one deal, you know, again, when I look at something versus everybody else, I might look at and go, this is going to be a great rental property. So I don't have to buy it as a deep, as deep of a discount as somebody else does because I'm not flipping it. But if something needs like massive renovations on it, I understand the construction game and the numbers. So I know where my numbers need to be in order for something to be profitable in that. Right? So the goal is for everybody to win. You get paid to connect the dots. That's what wholesaling truly is. Wholesaling is, hey, I used my time to create income by connecting with an investor and a seller and the investor is going to be able to make some money. And I get paid to connect those dots. And Raymond, you're right. You know, these, unfortunately social media is, you know, training these people like, oh, you're making 30, 40, 50 grand a hit. And that's just not the reality. Those home runs happen every now and again when somebody gets really lucky. But it takes a lot of at bats to get to that process. So wholesaling is creating income. And you know, if I talked to you, Kendall, and I said, hey, you want to connect with as many sellers as possible and you potentially could make $100,000 this year by connecting the dots. So now you've created income and stability and now we start looking at what's the long term versus the short term. A lot of people think the flipping game is where all the money is made. And the reality is it's not. The long term game of holding properties is actually where the stability comes in.

Okay, so I got a question on that one. That's all right. Is, yeah, how would you go about that? Like no one wants to, no one wants their Baby, to be called ugly. You know, you don't want to come in your house and be like, hey, man, your house is subpar, so on and so forth. How does that conversation happen? I mean, I, and I, and I put everything I, I talk about relates to aircraft, aircraft maintenance. I could go to a helicopter and say, hey, Johnny, I see your aircraft is X, Y and Z. This is potentially what it's going to cost. You know, it's, it's subpar. You know, I can give you explanations on why we need to fix this. How do you start that conversation with someone? Because, like I said, obviously you do it respectfully. But how do you go to someone who says, hey, are you interested in selling your house and can I take a look at it and I can show you why I'm willing to offer you this price? Is that how you do it? Or do you have pages where you.

Go, yeah, it's breaking it down. So, Hayden, you've had some ability or some skill or some time in the construction side of things. When you start talking to a seller that has an original home or maybe the cabinets are falling off the wall or whatnot, you have to go to them. From the standpoint of, okay, we both agree, and you have to ask the questions. You can't tell somebody that their house is a pig. You have to start asking questions to get them to kind of agree, which is, hey, Mr. Ms. Seller, would you agree that your house needs some updating? Well, yeah, I do. Would you agree that the house down the street that sold for $400,000, it might have taken, you know, $100,000 of renovation to get it to that sales price? Well, yeah, we weren't really sure what that was going to cost. The conversation comes in questions. It doesn't come in accusations. Some of these people want to go in and go, well, I'll make you an offer as is cash, blah, blah, blah. But they're not breaking down the numbers. So what I've learned to do is break down the numbers and the area around them in order to give them data, in order to make a decision. And some people are okay with it, some people are not. But your approach is everything. So I can give you a quick number, you know, because we're all in the same local market. If you see a house that needs the roof, the kitchen updated, like everything inside of it needs to go, you're probably somewhere around 75, $75 a square foot to renovate. So let me give you a good breakdown real quick. Let's say you Go knock on a door, and the house across the street, completely renovated, just sold for $400,000.

Okay.

And this is a model match. And you knock on the door and it needs everything. And it's a thousand square feet. Right? Model matches, they're both a thousand square feet. One just sold for 400,000. The other one is not on the market, and it needs all this work. So you're like a thousand square feet? Well, it's 75 a square foot. It's going to cost about $75,000. Between 75 and $100,000 to renovate this property. Okay.

Okay.

Now you have a baseline, but you also should understand what the seller had to pay to not only sell it at $400,000, but what they paid to renovate it. So here's how the numbers break down. $400,000 house. In the current market, that seller is going to have about a 10% cost of sale. Okay. So they've got real estate commissions on both sides, buyer, seller, commission. And they're probably in the current market going to contribute somewhere between 2 and 3% of buyers closing costs to make the deal go. And they're going to have 1% cost of sale themselves. So about 10% is an easy number. I utilize it all the time. 10% cost of sale. So the seller across street sold for 400. Their net was 360. So $40,000 comes off the top because somebody is going to pay that, sell it one way or another. Okay, now we take that 360 and we start talking about repairs. Let's just take an even number of $100,000 because it needs a roof, it needs to be gutted, all the things. That's a retail number. Now we're down to 260. There still is not a profit plugged into those numbers. Right. So your $40,000 cost of sale, another $100,000 to renovate it. We're down to 260. That is probably a house. I'm making an offer of $200,000 for now, somebody's going to be like, you're insane. I'm not insane. If I've been able to show them what the numbers and the cost are going to be in order to get that house to a $400,000 price. So it's all in knowing your numbers and having that conversation with somebody and getting them to the point to understand why the numbers are what they are. And one of the things you haven't experienced, Hayden, because you're not a real estate agent, is what are the Other time factors for that seller, do they have any money? Do you have the money to put $100,000 into this? Do you have six months of time to find a contractor to renovate this to get it to a $400,000 price? By the way, when you hold it for six months, you're going to be paying mortgage payments, utilities, all these costs to hold it as well. So my question, always a seller is, hey, if I found a net number that would work for you that you didn't have to do anything and you could walk away in the next 10 days, would this make sense?

Yes.

So on that particular deal, be like, hey, if I could either myself or a partner could pay you $200,000 cash for this property and it could close in two weeks and you don't have to do anything, no inspections. All the risk is on the other buyer. Is that a number you would consider? Now you start a dialogue. You're not going to offend anybody if you're being realistic. It's when you go into a house that doesn't need to be remodeled and you try to tell them it needs $100,000 worth of work, that's where it becomes unrealistic. And that's, you know, where somebody's going to call bs.

Last question.

But I think more important. No, yeah, go ahead, Raymond.

So again, it's. I'm kind of a perfectionist as it relates to things. I'm not a contractor. I converted my garage into a, to a home for my in laws and I actually we, I had my son when he was like very much younger. We lived in a manufactured home and we refurb the entire thing. And my, my real, my realtor because I refused to sell it until I thought it was up the specs, as far as I'm concerned is she said I did too much. Where, where as, as a, as a person trying to renovate a house, obviously you go into a home, you can go. I can sell it just by doing X, Y and Z. Where would someone get, where would someone get that? I'm not saying do a minimum or halfway, but that happy medium as a person trying to sell a home, I mean, how do you.

A lot of that.

Go ahead.

I'm sorry, go ahead.

Other than, other than me, like I said, I, I work, I work almost two jobs. You know, there's only so many hours in the day. I can't do it. I'm beyond relying a lot on my son right now is other than literally doing a baptism by fire, by winning and or Losing. How can one. How can one learn that? How can I learn from you by not making your mistakes? Where can I go for that?

Well, there's. There's a couple of different things. One of them is my wife and I do a online community right now called the Limitless Circle, which is a small investment each month. My wife is a general contractor. She has renovated a thousand homes in the last decade. I think she's got 26 projects under construction right now. And then I'm really teaching on the real estate investment side all the things that we're talking about. So, you know, learning from those is by learning by experience. Right. It's also learning with partnerships. So it's saying, hey, I've got a deal. We want to do this. Will you partner with me or can I, you know, consult with you and can I invest in your advice during this project? Okay. This is where a lot of people short side themselves and they're like, well, I don't want to bring somebody else into it. I don't want to be in it, but I want to make sure that you're not making the same mistakes that we did. But I want to go back to your original question because I think this is really important. Your original question was, how do we decide to not over improve something for the neighborhood? There's two parts to that. One, you're not going to live there. Okay? And so we have to take the emotion out of it, but we also have to put the emotion back into it. Which means, you know, what Wendy and I have learned over the years is we don't cut corners. We're going to do the right thing because it's right. But we're not going to over improve the property by, you know, doing $10 a square foot tile when the community affords a $2 a square foot tile. Sometimes we get emotionally involved in what we're doing when we're renovating something. And we have to stick to our guns and our budgets based on the area that's located in and based on the comps. And that's why when we start something. So I'm going to give you an example. Let's say you guys bought that house for $200,000. Before you ever swing a hammer, you're going to get full bids and inspections on everything in the house to make sure that the budget meets the neighborhood and provides a profit. Too many people think they got such a great deal, they start tearing into things before they know what's really happening. And then they create a mess. And so Sometimes we have to look at things and go, is it necessary to replace the kitchen cabinets or can I paint them? Not that you're cutting a corner, but sometimes the area lends itself to go ahead and paint the cabinets rather than replace them. Does the area need a massive master bedroom or bathroom? We don't need to do structural changes based on the demographics and the comparables. So we want to know the area that we bought in. Go look at a couple of houses in the neighborhood that are on the market. Go look at what has sold, drive by them, look at the pictures and go, well, they only painted the cabinets. They didn't change them out. So you start to figure out, like, I don't have to put as much money into this property as what I think I do. Because sometimes we go into. We're like, we're doing cabinets, we're doing showers, we're doing all these things. And there's ways to cut down on that budget to where it meets the area that it's in rather than over improving for that area.

Makes absolute sense. You're literally just talking about me, the guy that tears everything apart.

Well, and here's, here's what we learned early on. We stopped doing that because you go through and when you flip a house, you're doing all the pretty. You're focused on the pretty, and so many people miss the functional.

Right.

So you go through and you remodel the inside of a house and it looks great. And then you get to the home inspection, you find out the sewer line is collapsed under the slab that you never checked. Right, Right. We learned, we learned by the braille method that every house that we do, we inspect the sewer line, we have it scoped, and we check the AC and we check the water heater, because those are the three main things that will make or break a budget. And sometimes you're like, oh, I bought this house for 200,000 and it needs all this work and the budget's going to be higher than what I want to. Well, guess what? You can probably sell it for a smaller profit as is and walk away from it rather than getting too deep into it. But you're only going to know that as if you do those things up front.

Okay, so we're talking about inspection and things like that. And if I digress, please pull me back.

You're fine.

I make the assumption that you're yourself and your bride. You guys have relationship with. With home inspectors and things like that, right?

Yep.

So there are, there. There are some that are high level Some that are low level. How long did it take you to find that. That guy or gal that you're like, boom. That you trust? 100. Because like I said, again, I'm very. When it comes to county codes, building codes. If it tells. Like right now, as an example, as a. My. My job, it tells me to put two screws in, I put in four. You know, two. Four is better than two. Right?

So you're an overachiever, Raymond.

I'm that guy. I pre. Drill them all. Where. Where does. Where would someone other than just trial and error. Again, are there places like. What's that one again? I'm an older guy. The. The Google and all that stuff? Like, is there. Is there reputable places you can go for finding home. I'm sorry? Finding home inspection inspectors, things that are.

Oh, I mean, because. Because we're local. I love the question. Right. So, Raymond, who was the last real estate agent? When was the last time you bought or sold a house?

Six years ago. And it's Melinda. I forget her last. Bishop. Melinda Bishop.

Okay. You still have a relationship with her?

I do. On purpose.

You still get a postcard every now and again from her?

Yes. She's amazing.

Okay, so here's the deal. She's the first person you're gonna call, and you go, hey, who's the home inspector that you trust?

Gotcha.

Right?

Yep. Makes total sense.

Everything. Everything that you're asking revolves around relationships. And, you know, I. I love what my mentor, Chris Harder, says, is that there's. There's a connection either within your reach or one person away. So you call her. You're like, hey, I need a home inspector. Okay? This is the person I trust 100%. She's going to stamp that. Just like I would give you my home inspector and say, I stand behind this guy 100%. Okay. Not that they're perfect.

Right?

Right. You know, but you're looking for the trust piece, right? That person. Now you start to work with, you start to build that relationship with. Now you get into the contracting side. The contracting side is a little bit different because, you know, like, some of the stuff that Kendall was talking about was. Or Hayden was talking about was, you know, understanding some of the bidding and some of the other stuff. That takes time, but you're still going to have to have contractors that do framing, that do tile, that do roofs, and you start to look at building relationships with people that you trust, and that's a slippery slope. It took us years to generate our team. Now my wife handles all the construction and oversight. But she is the one that has built that team from roofers to plumbers to home inspectors to anything you can possibly think of. Window people. And it's trial and error until you find somebody that has a personality, that wants to work with you, that is going to be part of your team at the end of the day, that you trust and trust me. We've been screwed by contractors. We've been. We've eaten thousands of dollars worth of materials. Cause people stole it. And you know, we no longer work with those people. But everything comes back to this. There's two very important parts building the relationship and the trust. And those two things are built on a lot of questions. And they're not questions out of suspect questions, they're questions as to like, let's say you meet a plumber, right? We've all met them. They're like, oh yeah, I'd be more than happy to work with you, blah, blah. The first thing you do is like, hey, do me a favor. Can I have three references of clients you're currently working with that I can talk to? It amazes me in my business that when you hand somebody. So you just said melody, right? This is my realtor. Like this, the person I love, blah, blah, blah. Cool. Now if you and I met at the airport and I worked with you, Raymond, you're like, oh, oh, you got to use my agent. She's the best. Blah, blah.

Cool.

You gave me a great referral for that. You've given me her name and I'm going to call her and go, hey, I'm thinking about selling my house. But before we talk, I want to meet or I want to talk to three clients you're currently working with. Will you give me their information? Nobody does that. Nobody asked that question. But this is where we build relationship and rapport, especially in the contracting field. Because the minute you do that, you'll find out real quick whether or not that's somebody you want to work with. Because they won't give you the information. Probably not a good source. If they're like, yeah, here's the people, you're probably on the right track.

Gotcha.

And then you're going to have those conversations. That's where you build trust.

Okay?

It's. It's always a trust. But verify with everybody.

Okay? Just something again, if I'm going off, let me go. So you experience right now, let's say two guys, a father and son, you know, it's going to be an amazing time. We're never going to argue. It's going to be beautiful.

Right. But you guys will kill each other in the first 30 days.

But a time frame wise, because I, if I foresee this right now, I'm looking at my son. He'll probably be the first to do this. He's a little bit ahead of the game of me. But what is you guys. Let's just say, let's choose your thousand dollar home, the one you're talking, or the thousand square foot home with minimum. With minimal. Minimal requirements, you know, to get it up to par. Um, what would you. What would your expectation be of. You know, I bought this home today and it's. Let's call it June 1st. What would be your expectation to. From start to finish? Just a. A standard. No. No issues. Nothing structural. It's just dilapidated and just cosmetic. Exactly. It needs a couple cabinets, couple appliances, a little bit of paint job and some cleanup. But what would your expectation be for you and your crew?

My expectation would be 60 days. 60 to 90 days. Okay. Now it depends on the crews and how busy they are.

Right.

This is, this is why when, when I give you an idea, there's one thing. Like I was just playing pickleball with a friend of mine in Muns park and they renovate condos. They've got a contractor that does condo start to finish in like three weeks. And I'm like, well, that's a good connection for you because my wife can't do it in three weeks because she's got 26 other projects going on. So it really depends on who you find and trust. And again, sometimes you get really lucky. And I mean, I'll give you a great example. Our main contractor, Abraham, he actually started out on a job site from another contractor that we were using that we inherited from my dad. And this guy would take a job and sub everything out through craigslist. So we had light bulbs being stolen, materials being stolen, because he was just bringing anybody he could find off craigslist. Well, Abraham happened to be the one contractor that came through Craigslist. And when Wendy got a hold of him and created a relationship with him, it's been an eight year run with them. And he has been a part of a thousand renovations for us. And he's our main guy. He does everything for us. Sometimes that's what happens.

Yeah.

And we trust him explicitly. He is family to us. And that is one thing I will tell you about contractors. You treat these guys like gold and they will take care of you. But the minute you come down on them and you're you know, a class A hole, they will either rob you blind or they won't do your jobs very good, or they just won't show up and you'll lose them. So when you find somebody good, you reward them, you take care of them, and you stay on top of them and you make sure they stay in line because you don't want to lose them.

They're too hard to replace, especially these days, for sure. So that's the one that is weird. I'm just talking to him. That's what I was trying to explain to you is when you buy a home, if you listen to what he said, let's say that's a thousand dollars a month. That means you're paying that spot plus your insurance, etc, for those 90 days while that's getting rented that twice. Because a big thing that we have is like, I'm kind of that guy is I like things done my way. And like I said, dealing with contractors, that's something. Even when I did my home, I was like, the only way I'm going to hire you is if you subcontract me, explain the codes, etc. But it's. I'm trying to explain to my son that if it's very difficult for me because I want to keep my hands and everything, to take a step back and realize for each month you take, that's the money out of your pocket. So if you were expecting to make a hypothetically $20,000 and you go two or three months past that, that means you've lost $3,000 in your profit.

Correct?

Am I correct in that assumption?

Yeah, you're, you're correct because you have holding costs.

Yeah.

But you also have to realize too, that there's. In construction, there's, there's unforeseen issues. I mean, go back to Covid when we had supply chain issues. That wasn't their fault. We all, we all had to deal with it. Right. So it's, it's, you know, and I, I think the better conversation is having the upfront expectations and making sure that, that they are aware that, hey, I would really appreciate realistic time frames because I'm trying to budget for certain things. But you can't. I don't say you can't. You shouldn't hold that against them. Right. But if you're giving them realistic, if you're like, hey, can we complete this in 90 days or less, you don't want to, you don't want to hold them to that. You want to give them some grace. But maybe like can we do this in 60 days knowing that it's going to take 90?

Understood. Gotcha.

Yeah. Construction's a funny aspect, but it's going to take some time to get to know some people in the time frames of things. But typically when you're doing paint and carpet, those types, this should be pretty reasonable time frame. It's when you get into things where you either a, you're having to do permits, right. Which I would stay away from until you get a little bit more experienced or two, you've got, you're ordering cabinets or certain materials. Right. Cabinets are sometimes three to four weeks out, depending on where you get them. If you go to Home Depot, maybe you can get them sooner, maybe find a cabinet connection. So there's. It's when you make some of those things where you're ordering materials that are custom. Like a kitchen is typically a custom made for that order. So it takes three to four weeks. That's what typically holds some of our stuff up. And then. So like if I just give you a time frame. And again, this is a little bit more of my wife's forte. Let's say you get in day one, June 1st, right. Next week, this week. And Jude one, you get a kitchen measured out. You're not changing the structure of the kitchen at all. You're just changing the kitchen cabinets out. It takes three to four weeks to order them and get them delivered and installed. Then you have another. You've got to get a guy in there to measure the granite or the quartz or whatever countertops you're putting in. Then that has to be ordered, fabricated. So you're six weeks, seven weeks. Just in that process.

A little longer than even I was thinking. Let's get this done. Yeah.

It depends on the cabinets. Depends on where you get them. It depends on where they get them.

Okay.

And one thing that I would tell you too is that be real cautious when you're using new contractors with how they handle deposits. So we handle deposits now. We've worked with our guys for a long time, but we will only give a 25 deposit until a certain amount of work is done. Then we'll do another 25%, but they will never have more than 50% of the. The money owed to them during the project until it's very close to being done and the other 50% is due. There's a lot of guys that they will rob Pierre to pay Paul. Right. They'll collect a 50% deposit for your job, which is the money they need to pay to finish the last job that they already collected money on. And so they're constantly going from place to place to do that. And the other advice I would have on that is, unless it's fl. Flooring or cabinets, those types of things, do not buy materials for the job, thinking that you're going to save money or rack up airline miles by going and shopping for all the materials. Because here's what happens. If you order 52 by fours for a job, 25 of those end up somewhere else and you end up paying for it. So all the materials should typically be in a contractor's bid, other than the things that are specific for the house. Like you can go to floor and decor, and if he tells you, I need a thousand square feet of tile, you can order 1,000 square feet of tile and it's delivered for that job. Right. So you know that it's specific for that job.

All right. All right.

So, Raymond, let me ask you a question. Do you own any rental properties now?

No, that's.

I was.

Before the, The. Before the. The housing market in Flagstaff went ridiculous. I'm to the point now where, like I said, you know, my history is that I'm the very. I'm the guy that buys silver. I'm the guy that. I'm the guy with a coffee can in the backyard. You know, I've got. Come to the point now.

What's your address?

Right. But no, it actually took me a while, like you said. You said seven years. And you were speaking until you guys started getting everything together or the other airline guy. That's pretty much where I'm at right now, where I'm. I'm not betting my grocery money. My son's grown. He's on his own. I feel comfortable. Like, I'm to the point now where I feel comfortable. I'm able to lose. I could take a large sum out of my retirement and I would bet on myself. I feel. I feel extremely confident. It would suck. I mean, I can tell you right now the learning curve is going to be horrible. But I believe in. I believe the fact that long term, I can win. I. I really.

It doesn't, it doesn't have to be, though.

Yeah.

So here's the thing that I guarantee you, you know, and we can connect offline to this podcast, but here's the really cool thing. I'm going to give you a strategy that I want, you know, and. And again, we can actually do a specific strategy session with Hayden. Aiden, are you currently employed?

No, I'm just trying to do the whole cell And BNB right now, he's, he's.

Okay. He's employed, essentially. You know, the guy that you're talking about that they, you find on Craigslist, essentially, through all his, all his contracting, things like that, he does work.

Okay. Hayden, I'm gonna ask you a huge favor. You can do all the research you want to on Airbnb and the bnb.

Okay?

Okay. It is a lot more work and a lot more pain than there is pleasure in that particular market. Okay? Okay. It's a short term. When it comes down to it, here's the thing that I would tell you guys. If you can do this together, which I wish I had this plan with my dad early on. Okay. And I wish somebody would have given me this guidance. But here's the really cool thing, Raymond. You have some availability and some liquidity. My guess is you also have good credit, right?

Yes.

So, Hayden.

Yes.

I want you to go out and scout out a property that you potentially would live in. That's a total piece of shit. And I want you guys to figure out how to buy that house. Okay?

Because.

Because here's what's going to happen, Raymond. You can partner with Hayden as an owner occupied with 3% down, and you can start to create the portfolio which is what is really going to create wealth. But with your abilities and your skill sets, you take a house that you can buy at $0.80 on the dollar. Let's go back to that $200,000 example I gave you. Okay? I'm going to put this in perspective for you because this is where it's really cool, because this is the thing that my wife and I are doing with my boys right now. Okay? I just bought a house. Let's say that $200,000 house will stay on the same example. You found a house that basically is 50 cents on the dollar. Okay? You now bought that house. And it's going to get a little complicated for a second, but there's other twists. This. Let's just say you bought that with hard money, okay? And Hayden is going to occupy that house and either rent out to roommates or whatnot. But the goal is we bought it, we're going to fix it up and we're going to add value to it. So let's say you guys did it yourself and you put $50,000 into it. So now it's 250. Now you can refinance that. Owner occupied. Basically, Raymond, you're co signing, but you're partnering. Okay? I will not co sign with my kids and I don't recommend anybody co sign with your kids, okay? You're gonna partner, you're gonna use your credit, and you're gonna keep 50% of the equity. That's the kicker here. I'm not giving you my credit for nothing.

Okay?

You guys work that deal. You put 50 grand into it. You now have a. We talked about this earlier, right? 100, you know, selling it for $400,000, okay, $150,000 sounds like a big spread, but when you pay cost of sale to your realtor, Melody, 40 grand off, and let's say there's an $80,000 spread, well, about 30% of that's gonna go to the IRS, right? So this is what you're left over. But here's what I can tell you is gonna happen if you take that same example. You put that 50 grand into it. There's $150,000 of equity that you're not paying to IRS and you're not paying to a real estate agent. And you don't have cost of sale. You use that equity as your down payment and you refinance it. Owner occupied with Hayden being the primary. Raymond, you are the secondary on it. You have $150,000 in equity. You now have a house with zero money down that potentially should cash flow. That has $150,000 in equity that now you start down the road of a rental property. So Hayden, you move in, you're renting out rooms, you, you guys are running this little business together. Then you're going to go out and do this again, but you're going to keep this first one as a rental. It's probably going to cash flow. You can even do the Airbnb if you think that that's going to work in that particular area. Right. You need to do your research. Really important. You can go on and do this once a year and continue to build that portfolio and build that equity. And here's why I say that's important. There are ways. I can't go into it all on the podcast. There are ways to get a little bit of cash out of it and profit without paying taxes on it. There's ways to do this together. But you need two things which you guys have. Hayden, you're willing to go put the blood, sweat and tears into finding the deal. And Raymond, you're willing to ink the deal and do this together, which you're going to create generational wealth. And that is like the most important thing right now that I can share with you. It's the thing that I am most passionate about in my life, teaching people like yourselves, teaching real estate agents that selling real estate, wholesaling, Airbnbs, they all create income, but none of them create wealth. So, Raymond, I think, like you, correct me if I'm wrong, I think there might be a few regrets that you didn't buy and keep some houses along the way.

100. The. The moment I bought my house, my first. It was manufactured home on 14 acres. Best years of my life. The moment I fixed it up and sold it, I instantaneously. We made 65 GS on it. And I was like, this is ridiculous. I just made. I didn't pay rent for 14 years. So that's. I mean, that's a win. Adding it to tax at the end, I could claim taxes. And then I made $65,000, allowing me literally to buy my home and Flagstaff that I could never afford. Today, start from scratch. This was only six years ago. So that's where I'm sold. I. I was a big chicken. Like I said. I told you, I was the guy with the money in the coffee can in the back. But I'm to the point now where I have a home. Like I said, as. As a dad with having kids, I'm not willing to put this. This house on the market. You know, Delean this house. But if I had a second one, which is my goal, exactly what you're saying, that's where I would start, that I need a place to stay. Obviously, I take care of a couple people here, but if I had a second home, which is my goal, exactly what you said. Use the first to leverage second, so on and so forth. I'm glad that you said this because I thought I was super smart, but I guess it's. Apparently that's what everybody does, so.

No, but here's. Here's the deal. I don't think. Here's the question I'm gonna ask you, because this is where it's really big when I do strategies with people. When you decided to sell that manufactured home on 14 acres, my guess is you called an agent. You said, hey, I'm thinking about selling my house. They came over like, yeah, let's put your house on the market. Looks good. You should net about this much. Never once did that person go, hey, have you thought about keeping this as a rental? Have you thought about pulling equity out of it? Have you thought about, can you put more manufactured homes on this? Can you create more income here? Nobody ever questioned any of that, did they?

100. Everything you're saying is 100% right. And I think it's funny that you're saying that you were talking about land because I'm literally talking to my son. I says I can't afford, I don't know. I can't say I can't because of my, my ignorance is there but literally buying homes and acre lots. So I was like, for what my, my old house is worth to do day, it's insane. And I, I, I told, I tell all my kids I wish I would have never sold it because I was paying 500 bucks a month. I, I could have kept that, you know, and paid that debt. Both, both liens.

So where, where was that 14 acres at?

Williams, Arizona.

Okay. So. And, and I, I just, I want to prove a point here. I don't want you to feel guilty about this because here's the thing. I don't believe it has anything to do with ignorance, Raymond. I think it has to do with education and guidance from other people.

Yeah.

This is my, my 100% passion right now is that when I go and do a strategy session with somebody, I, nine times out of ten will talk them out of selling their house and they need to keep it as a rental if they can. If you still owned that 14 acres and Williams, my guess, if you went back to it, it's probably would have been split able. Yeah, you probably could have split that 14 acres in some way, shape or form.

Yes.

You probably could have delivered and installed multiple manufactured homes on it, creating other rentals. Like, like there were all kinds of things that could have been done, but no one showed you what was possible.

100%. And even that's. And for, for me to be, if I got to be 100% honest with you, I knew that there was the real estate things out there, but again, I was not educated on that. But in, in this first home, the, my first home, the big issue was fear of failing.

100. Yep.

If I had to tell you one, one contributing factor was fear. And sure. Like I said. Oh, it's like I told. I've tried to explain to my kid. It's like failure is amazing. It teaches you what, what you did wrong, what you did right. But I'm to the point now where I don't. I'm never going to gamble with the grocery money. But if I got excess, which I do right now, I want to buy a second home and I want to buy a third home. Like I said, I want to. Hard work is amazing. I want to, I teach all my kids that. But that doesn't mean you have to break your back. You know, your. Your body will fail you. But if you got a mind, you can always have a way to have income. And that's my concern.

But here's the one thing that I'm totally going to agree and disagree with you on. We have to do the hard work. And some of us have skill sets. Right? Right. You have a skill set in the aircraft industry. Now the skill set is how do I. How does somebody teach me to take my hardworking income and turn it into passive investments that are going to work with me or for me over time?

Right.

Okay. We all are there. I sell real estate as an income like you do as a aircraft tech that provides income. But the true wealth and where things are being generated is in the assets that I own. Right. Not in what I sell. What I sell is creating a job. You know, Hayden, we talk about wholesaling. Wholesaling is a job. It's an income. It is not the thing that's going to get you to the end of their life.

Yeah.

But we have to take that income as it's generated and figure out how do we put it to work so that it produces something down the road. Right. So I want to encourage the two of you, as painful as this might be. Raymond.

Yeah.

I want you, the two of you, to go back to that original property that you're talking about in Williams, and I want you to look at what it is now and what it could have been had you kept it. Was it split able in 2 acre parcels? Was it splitable in 5 acre parcels? The reason I want you to do this is because I thoroughly believe if Hayden sees this, he will understand the missed opportunity and learn from it. And he will also see what it looks like if he comes across it again.

Will do.

I just, I think that that's important. And I think that, you know, Hayden, what you guys are doing together and you embark on this together, there's a father and son advice that I want to give you. Raymond, as much old school as you are, even though we are the same age, because I am 45 as well.

Mature. Mature.

You do have to give some leeway to, to Hayden when he comes up with ideas. Because this was probably one of the biggest combative things that I had with my dad when we had a partnership when I was 21. It was his way or the highway, even though I had good ideas. Now the ideas need to be finessed. And he had experience.

Yes.

But there's gonna be some weird stuff like, you know, when Hayden tells you to do a dance on Tick Tock, you should probably do it. 100.

I'm down.

No, it's. It is hard.

It is difficult because, you know, I do always see him as my son, but like I said, it is the process of the jobs he's had in the past, you know. Check one. I don't want to be a professional roofer. Check two. I don't want to be doing contract on my life.

He.

He has, he has something. He has a, he has a history now that he can stand on, if that makes sense. Where before it's like that, I'm still like, I'm 45 and I still go add everywhere. It's insane. My struggle with my son is not so much his ideas. It's trying to have him understand is that financially, again, I would take the brunt financially of any endeavor we should do. Right. And is it fair to say as, as, as a partner, because whether he's my son or not, we are partners. We both have to agree on something. And if I'm not saying an idea but a process, it does need to be sold. Like I would have to explain to my son, hey, I believe we should have a sheet metal house or sheet metal roofing. It's going to cost X amount more, but I think it might make the house worth more. I don't know. That's just something I made up, you know. But it's like I would have to sell my ideas to him. It's a con. It's being married, for lack of a better word. We. He has to. It can't just be like, dad, I got a great. You using your example as. Excuse me, sir. Hey, Johnny, you know, your house, I, I see as it could use some repairs on and so forth. You sold me on that. You, you made me. You explained to me. You gave me the pros, the cons, the benefits, so on and so forth. It wasn't just because. Oh, Johnny said. Is that.

Is that. It wasn't because it was a good idea.

Right, right, right. It's, It's. Is it fair to say that? Yeah. And I'm asking you that. Is that I need my son to understand that he has to sell me. It's not dad being the jerk because I'm a control freak. I'm used to being in charge professionally and at home. But I do have to be sold. I, I see money as real. You know, I, I mean, money, real thing. And it took me a lot to get where I'm at. So it's not like being a jerk. It's, hey, what, We're a team. I can tell you 100 reasons on why this won't succeed. I need the one that says, as a team, we will succeed. Does that make sense? Is that fair?

As a.

So, Hayden, here's, here's the, here's the thing with both of you. Nothing should ever be a sales pitch. Okay? Hayden, you're going to look at 100 ideas or 100 homes before you find one that actually is the winner. And I want you, I want you to take this very seriously. Hayden, you're going to keep bringing deals in, right? There's going to be one of them that works. This is, this is me all the time, 100% of the time. If I take my investor's money, which I utilize, which is a lot of people's retirement money, and I'm putting it at risk, Hayden, you better be willing to ink that, that you're putting your dad's retirement risk.

Okay?

This, we're not, we're not playing with things. Right? You, you told me earlier how important your family is and what you owe your parents and all the things. So your dad's money and this partnership is just as much your money as is. And you need to, you know, look your dad straight in the eye and go, if it was my money, I would risk it. And I'm super confident in what we're doing here and knowing, like, you're not playing with somebody else's money. Because guess what, as you do this more, you will have opportunity to invest other people's money in the things that you're doing. And you better be damn well sure that you're going to give them their money back 100% of the time, because that is very, very important. It's very important to me. I manage a lot of investor money right now, and it's a lot of people's retirement, including my own mother. Right. Including my in laws. I am responsible for a lot of stuff, which means when I ink a deal, I better make sure I can back it up. And you need to be able to do the same. Now, I do believe that there's going to be things that Hayden, you see that maybe Raymond doesn't, but you guys got to talk through it. It's not an argument, it's a talk through. And you guys have to peacefully agree to disagree and call it a day. And nobody gets to go back six months later and go, I told you that would have been a winner. Nope, you don't get to do that. You get to go back and go, hey, remember when I said this? This is what it was. This is how it turned out. Sometimes that's a great way to learn from things. Because you know what, Raymond, you may see something go, you know what? I'm not comfortable with this. And Hayden, if you come back six months later and go, hey, dad, like, they bought that house for this. It looks like they put this into it and it sold for this. This was a deal I thought was good. So there's going to be a lot of practice in this, and that's okay. But I want you both to see the ultimate goal.

Yeah.

Okay. The ultimate goal is that there's some income created, there's some fun that's going to be had together doing this. And there's ultimate. And this is the important part, Raymond, you are going to help Hayden break the generational chain of the work hard and the retirement and the typical of what typical retirement is, which is save money, live below your means, don't take any risk, and bury it all in a coffee can in the back. Because, Raymond, if we go back to this at your age of 21, where Hayden is, and you're like, man, if I had bought four houses from the time I was 21 to the time I was 45 and they were all rented, I'd have six or seven thousand dollars a month of passive income and a million dollars worth of real estate. That's free and clear. Had somebody just showed me this path, 100%. And that's what you guys are embarking on.

100% and understanding as a team. We will. When I say fail, I mean failure is a big word. I don't see it as a bad thing always. You know, like I said, there are many times I tell everyone, you know, you get punched in the face and enough times, at some point you're gonna duck. It's a win. You know, it's winning from then on out, it's just.

Yep.

Having him understand as well, is that as scared as you are, you believe in yourself? I don't want to get cheesy, but you put the hard work in. Normally hard work works, you know, and in the end, oh, I do not want. We've had this conversation. Not in a bad way. He doesn't want to be me at my age, and I don't want him to be me at my age. And I totally agree. That's the goal.

But the, the. And the great piece of that is that Hayden, you, you get to see all this and your dad is sharing it with you, which is such an amazing journey for you guys to do together. More Importantly, Hayden, I 100% agree with your dad is that you are going to have to work your ass off. None of this happens overnight. Real estate success does not happen overnight. I don't care how many TikToks or YouTube videos you watch, okay? Everybody had to start somewhere, and they had to do the work, and it takes years to get to that point. And there's going to be some failures, not going to make as much money, and you have to be willing to work your freaking ass off based on the goals that you want. So you got to know what you want. Right? There's a. There's a pair of Air Jordans on my wall. And that was. It's a reminder of what my dad taught me. At the age of 12, I wanted a pair of Air Jordans. They were $125. My dad drugged me to Kmart, and he grabbed a $9 pair of tennis shoes. He said, this is what I'm responsible for as your father. If you want one $25 pair of shoes, here's $5,000. Here's 5,000 flyers. If you deliver these door to door, you'll make $5 per hundred, which will get you enough money to buy those pair of shoes. So if you want them, that's how you do it. That has always been the reminder that everything that you want is on the other side of working your ass off. There's nothing easy, right? So it's your choice. You got. I mean, my dad was terrible about these analogies. When people would come in and talk to him, they're like, I'm so far behind. People come in and talk to me like, I'm so far behind. He's like, how many hours a week are you working? They're like, 40. He's like, what are you doing with the other 120 hours your week? Sounds like my dad, because you ain't working that hard.

Yeah.

So that. That has been something that I have taught my kids, is something that I've taught my community is like, look, I don't go home and watch a bunch of TV. I'm getting up at 4am I'm looking at deals. I'm talking to people. I'm on the phone. I'm on podcasts. I'm looking at houses. I'm practicing still. But it took me a decade to accumulate what we've accumulated. But it took me the decade before failing through everything. My wife and I Lost everything. We had to start over. I broke my neck in 2009. We had two toddlers. Like, we went through hard shit. And it was always like, what do you want? And it's always my dad's voice. Well, go work for it. You want it, you can have it. And that's the truth. And that's the only thing you need to realize in yourself, is that if you want it, you can have it. But you have to know what you want, too. Right? One of the main things you said, Hayden, was freedom. You need to know what freedom looks like, because freedom's different for everybody. So you need to start thinking about what. What does that freedom look like? You know, you're almost speechless, Hayden.

Yeah, I'm out of it like that. I guess it has different perspective.

So I'm like, again, I'm the guy. I started from a mop boy to, you know, working on airframes. And one thing I wondered is, I'm very much. Like I said, I'm very tactile. I'm very visceral. I need to touch things. I need to see things. My son is very similar in nature. Apprenticeship, things of that nature. No, you know, getting. Not getting paid, you know, taking one for the team, so you get the experience, you get the knowledge, what's out there. Like I said again, and I apologize, I don't have all the time in the world. Like, what you're saying is, as a dad, you know how that was your. You gotta. You gotta prioritize. So I have not had the luxury time to.

I will tell you the most inexpensive. Hayden, if this is truly something you want to do, I honestly don't know how wholesalers, investors do it without doing this first. I would highly advise you. It's 90 hours of schooling. You can sign up tomorrow, go start your real estate classes.

Buy for the license.

Yep. Here's why. Your real estate license. What's that?

I said I'll spot him the money if he passes. It's free.

Yeah, there you go. But, Hayden, you have to pay for it before your dad reimburses you for it.

Yeah, no, I. I have. Yeah, I have it already set up. All right. It's just, I'm work. It's just the real estate part and figuring the thing out and the whole. All the numbers is. So I'm studying in for. To take the real estate class for the real estate license.

Have you already taken the classes?

No, I was go. I was for a little bit, and then things kind of went sideways for a little bit. And then I had to, like, I just didn't do it honestly. And now I'm trying to. Now I understand more of what I'm doing. So it's like, well, now, okay, here's.

Here'S why this is important.

Okay?

Go through real estate school, get your real estate license. Once you get your real estate license, you're going to text me back and we're going to find, like, you just talked about, Raven, like an internship, which is joining some sort of team in real estate so that you can learn the real estate structure. See, once you understand the traditional side of real estate, it makes the investment side all that much easier because you have all the resources to see it and understand it. See, I started out in the traditional space, which is taking with buyers, working with sellers. What that did was it give me opportunity to learn how it all works together. And then as you progress with your license, your real estate license is your greatest opportunity to create wealth because it's the one place where you can be Hayden Kendall realtor, and somebody calls you, goes, yeah, I've got this mobile home that I want to sell that's on 14 acres that I don't want anymore or I inherited. And like, cool. That's an opportunity my dad and I can buy. Let me show you how this works. Right? That's what my business is based off of. But you gotta learn the traditional side, which, by the way, the traditional side will create an income, which will create opportunity, which will create wealth. That's the path. And once you see all that, you will start to gain so much more knowledge about how this business works and how the industry works, which will set you up for future success. So, you know, you can jam through 90 hours of school, you know, in the next four to six weeks, you could have your real estate license before the end of the summer. That's, that's the path because it's going to give you the tools, going to give you access to mls, it's going to give you contacts with other people, and it's going to start that path of understanding it because it's going to give you a greater knowledge of how to work the comparables and understand the values and all of those pieces.

Okay, okay, okay.

Is there a way to. Like I said, I believe. I mean, I feel confident I could buy another home right now. As a young person, many times young boys want to go, or young men want to go off on their own. They want to. I'm doing this without dad type thing. What are avenues for a young person to Take, you know like Hayden has great credit, you know, he's, he does well with that. Is there ways for him, you know that, that the, the 10 down, you know, the FH loan or whatever it might be.

Yeah.

FHA, Is There LLC, Is There Ways that a young man can start with limited, with limited income? He doesn't have a plethora of money stashed somewhere.

Well, that's where you guys partner, right? That's where we start something where it's a partnership. Which means that if he has good credit but he doesn't necessarily have a ton of income, that's where you can partner with him, Raymond, by being the co signer. But the way you're going to structure that is you got guys are partners. You have 50, 50 in that equity of that house and the goal is like okay, now you're on your own. You have this house. We're going to run it like a business, however that looks like. And then you're keeping that house together and moving on to the next one until Hayden, until you're on your feet and you can buy something yourself. You know you mentioned a couple of times the LLC structures. Yeah, that is a huge complicated. You gotta have money and income to produce those types of things. You can't just go start an LLC and somebody lends you money to buy a house. It's not the way that works.

Quick question.

So.

You can tell me, tell me if I'm wrong or not. But I remember because I was trying to figure out how to get a loan. I was like I can't by myself. And so I started going around credit unions trying to figure things out and asking around and age was a big thing and all this other things. But I was mentioned. I don't know if it's true or not, but is it to where? Because there, because I didn't have like, because I put myself in stuff before which I found was a bad idea. Now I had to do two years of self employed. So that means like we didn't really do anything and buy anything. So but I guess what are you able to put money into an account for a credit union and leave it in for six to eight months and be able to make like a personal relationship with a credit union. Does that make sense?

Yeah, you're, you're asking, it's for, it's like a deposit account. If I deposit $100,000 into a credit union, are they going to overlook things and give me a loan because I have $100,000 in the bank. That's not the way it works. Here's why. Loans have boxes, right? So fha, va, Fannie Mae, Freddie Mac, they all operate in checkboxes. And if you don't meet the criteria, you don't qualify. So the only way around that is to do private financing, hard money lending, there's a bunch of other things that are out there, but you gotta start with the basics and you don't need those things as long as you and dad are good with making a partnership agreement on how to do it. Because, because you don't have enough income or job history to get what you want or where you want to go. So that is going to take some time. So good credit is great, but income and job history is going to be the other important part to all this because that's what they're going to qualify.

You on and going in together as partners. Let me ask you this, how does that fare is with a me being the, let's say, financial sole provider in this venture, does it matter if he has everyone as co partners? Does it matter if he's employed or are they strictly looking at me and me alone? Nope. Okay.

It does not. They're going to look at you and you're qualifying and they're going to look at his credit. So you're doing it together. So as long as you qualify for that payment, it's a structure and I can connect you guys with a great lender that can kind of walk you through what's going to be be needed to do that. So, you know, here's, here's a small path to what it looks like. FHA loan. And again, we don't want to buy properties if you guys are really going to go down this path. We don't want to buy properties just to buy properties.

Right.

But we do want to be prepared for when the right opportunity comes up. So let me give you an idea. Let's go back to that $200,000 example. Okay? Now we have that, we can refinance it. And again, there's more complicated to this, but I'm just going to give you the overview of it. So you find something for $200,000, you buy it with hard money, which is private financing, you get it fixed up, you add value to it and then you refinance it. Owner occupied with Hayden. Okay, now it's refinanced. Owner occupied on an fha, you can transfer the title of that property into an LLC that the two of you own. Now again, there are more complications to this depending on how you're going to do it and depending on what the long term plan is. But I'm giving you the short version. Even if you guys buy it together, you don't put it in any LLCs, but you can put a stipulation in title that you are partners on it because you're co signing and you're on title together and you're moving that process forward like that is the first place to start. But we don't want to go private property just to buy a property.

Okay.

I want Hayden to go do some work to find something that's a deal that you guys can buy together because that's part of this partnership. Right.

So we have. Hayden has been, he hasn't started. He has been showing that he's, that he's doing his due diligence and he's actually brought me to. There's a couple small lots. Are you familiar with Flagstaff? Well, you know, it doesn't matter. The small lots.

Yeah.

That are in an area, a neighborhood and they're condemned. So my, my thought to you is, is me being me. Like I told you, I'm the guy that replaces everything. What are your thoughts on if it's condemned? Like I said, I have, I have availability of tractor, tractors, dump trucks, have friends that way from literally leveling it, turn the power and gas and electricity off, level it and start from scratch. Are you a believer in starting from scratch? Because I know there's ways that you can. And again, I apologize if what I'm saying is wrong that you can essentially you pay interest only while you're building the home. Am I correct in that assumption? If I read that depends on.

It depends on the financing you get if you're getting some sort of construction, construction loan on those lots. What do you mean by condemned?

They're just, they're trashed houses, old. It's terrible. And me like the can do guy, I'm like, bro, let's level this thing out, clean it up and start from scratch with that construction loan. Is that, do you believe that to be a viable. Because the way I see things, most things that I build the house is it ends up being obviously up to code, etc, but very maintenance friendly. Because we're, we're talking about potentially a 2 home occupancy. And you know, I would like to build a home where it's maintenance friendly. I don't know if that makes sense. But where, you know, have water, heater access, heater access, et cetera, to where when we rent it out, if there's an Issue. I feel confident that myself, I can fix it as you know, the homeowner and our co owner.

Owner.

So my question is starting from scratch, is that something viable, recommended from the get go? I mean, this would be my third home I bought. Or do you do shun against that?

I don't shun against anything. You just have to realize there's going to be bumps in the road in doing something like that and you've got to. My advice would be, can I hire somebody or invest in somebody that's going to guide me through this process that, that can help me through the bumps in the road? If you try to go through it, you know, I'm sure that you're very handy and very knowledgeable. The minute you try to be the weekend warrior on something like that is when it costs you months and months of holding costs because you decided to do it yourself in between jobs.

Right.

Versus can I hire this out? What does it look like? Because you're talking about buying a lot that needs to be bulldozed, that permits are going to be required, that the county is going to be required. And then you're talking, I mean, you're talking about a year long process.

Right.

This is not a six month process. Now, it depends on what you're trying to accomplish too. That's why I said every deal is different. Right?

Right.

So if this is a lot that needs to be scraped, I don't know. I know a lot of Flagstaff is multipurpose, so is it possible that lot could have a manufactured home installed on it? If it is, you can get a manufactured home installed on in like 90 days. Right. So we have to look at it from all angles and go, well, yes, this is. No, it isn't. And what's it going to take to build? Do I have a contractor? Am I going to do owner, builder? Right. It's always great when we know people. But the question is you're starting to invest, so you're either trading time for money or you're investing money in time, right?

Yeah.

But here's, here's what, here's what is important though. There's a lot of practice in these things, which means. Okay, great. Hayden brought this opportunity. Well, what's it going to require? Well, how much does it cost? A demo? What does a construction loan look like? How much do I think I'm going to put into it? How much is it price per square foot to build? The reason you want to do that, it's not a waste of time because the more you do it, the more you understand and are prepared for opportunities. Because you look at it, you're like, okay, we can buy this lot for $100,000, but it's going to cost us $300,000 to build a house which is going to be an over improvement for the neighborhood. So that doesn't work. So in order for us to do this, we'd have to buy that lot for $50,000. So you've worked it backwards. So the more you do this and the more you look at things, the easier it is to be prepared for something that pops out and goes, oh yeah, we just did the numbers on this one last week and we kind of know the direction, so this would really work. Well, it's when you're like, you look at something from a surface level and go, nah, that's not gonna work. And you toss it. But you don't do the due diligence to even like be close to seeing if it's going to work or not.

Yeah, that's the over improvement. Very, very strong point. Yeah, I see that.

Yeah. Because here's the other piece too. If you're going to flip a house versus keep it as a rental, we renovate completely different. We build completely different.

Can you explain that?

Yeah. So if you're going to build a. Well, let's, let's just talk about flipping. For, for example, I'm going to go back to the $200,000 home. If you're like, hey, we're going to flip this house. So you're trying to make it look super nice. So I'm going to give you a couple of different small examples on it. You're doing it for resale, so you might go in and put pretty tile backsplash or showers right in, in both the bathrooms because we want it to look pretty and we're going to put a little bit more expensive flooring in it and we're going to do these things for a flip. Okay. That's because you're trying to appeal to resell it. It's kind of like painting a car, right? You want to paint it decent. You don't want to do a mako job if you're going to keep it. So what we go through is you're like, okay, when we keep a house like that for rental, we go through and we do just like you were talking about before, kind of a maintenance free type property. So rather than doing tile in the showers, we do marble surrounds. We do slabs of marble because they're easier to maintain. The tenants don't do as much damage on the grout. Doesn't wear all the things. When we're renting a house, we're going to do all solid surface tiles throughout all the living areas, but we're going to put carpet in the bedrooms. We're going to use a different type of paint, maybe a different type of countertop or cabinet. Like, I'm not going to put white cabinets in a rental. I'm probably going to put black or a charcoal because they wear better. So those are all things that we look at depending on are we going to keep this or are we going to flip it? And if you're going to keep something, you may look at something and go, you know what, let's replace the roof. Because this is going to be long term. So we want to go ahead and keep it versus if you flip it and the roof still has 10 years left on it. Well, you don't need to flip. You don't need to do the roof right now. It's still in good shape. So we always, we always find things and we look at them determining on are we creating income or we creating wealth. And there's a difference.

So.

Sounds like Airbnb is a lot of work.

Yeah.

Yeah.

Well, Airbnb is great if you're working the asset, but it can be a lot of work. Right. And I would encourage you to look at long term assets versus Airbnb and there's a lot of rules and guidelines. And the area that you're in in Flagstaff, you know, depending on the neighborhood, the subdivision HOAs, there's a lot of crap coming down around the HOA around VRBOs right now. And, and the market is extremely saturated. You know, we live in the Munds park market and that market is oversaturated with vrbo. So people have gotten hammered on it. They're getting rid of things now because they don't rent as well as they thought. And everybody, you know, Hayden would be interested why you're interested in it. And I think it's because everybody's like, oh, we're making so much freaking money on it. And it's not the truth. Right. One guy had a really good year during COVID and I guarantee you he's getting his ass handed to him now. Right. Because it doesn't work as well and everything.

You.

It's complicated. Right? I mean, we could go on for hours as to why it's complicated. In fact, you know, I'll put it in the show notes too, send you guys the link. I did a free Training for an hour and a half on the good, the bad and the ugly of vrbo. Because I've owned them. I've owned them in South Scottsdale, I've owned them in Flag in a month's park, and at the end of the day, I didn't like them. They're a pain in the butt.

Yeah.

And I make more money on my long term rentals than I do my short term rentals. Now, some people like I've got friends in Denver that are killing it in the VRBO market. But it's themed for bachelorette parties. They cater to women. And her audience on her podcast is women. So her business is pulling people into the vrbove. There was a purpose behind it. It wasn't like they just decided to do a vrbo. They did it very intentionally. So it's doing research on what works, what doesn't. Do I want to theme something? And if you're thinking about a $500,000 home for a VRBO, well, welcome to a saturated market. Right. And you're probably not buying a $2 million house for it either. So, you know, I, I think there's a lot of steps before you go into the VRBO market that we need to explore. And I think looking at some real estate sales, maybe some wholesaling, maybe some flipping, although I'm not a big fan of flipping right off the bat. But definitely, you know, your first thing needs to be finding that deal, Hayden, that you would live in that you and your dad can partner on and create a ton of equity on it and start that path. Because that's where the money is, that's where the long term is.

You know, you were talking about Airbnbs, and again, this is just, just me. My thoughts is that we differ many times. Again, young guy, older guy is. I see a rental as something like you're saying long term that that seems to me a benefit to me. And the reason why I'm saying that is if you have a person that's going to rent your home for a year, they're invested in a year, so they're not going to sit there part in theory, I would assume they're not going to be sitting there partying, drinking every, every night, you know, versus a person that comes from Phoenix to Flagstaff and then they're building bonfires in your backyard, you know. Right. Is it fair to say, just your thought, that that seems to be the pro of a long term rental versus the Airbnb 100%?

Yeah. Because you got to remember that you Know, the VRBO might be rented 50% of the time and 50% vacant. So while you're getting extra money for those higher days, but you're still paying for utilities, you're paying for Internet, you're paying for somebody's usage on things. You don't pay for all those things when it's a long term.

Okay.

Yeah, I agree.

Cool.

What are your thoughts?

Well, guys, I got time for one more question, and then I need to wrap up to get to my next meeting, but this has been fantastic.

Yeah. First off, like I said, I'll let my son ask his question. I appreciate. Like I said, just I appreciate your time letting the old man hang out. And like I said, we got. This is your podcast, and we can. We can start paying attention to that more, so we can be a little more proactive versus reactive. So I'll let my son have the last. Last question. Again, I appreciate your time, sir.

Absolutely. It was great meeting you, Raymond.

Well, honestly, I'm just gonna be absolutely honest. I got most of my answers answered when I was just listening, but I just want to say thank you and I appreciate your time too. And there's a lot you just said in my brain, so I'm, like, trying to process off, you know, So I was like, all right, there's a lot more things to do, but you definitely put in a different. In a different perspective. And a lot of my questions that I was curious and I thought I was like, man, dude, you put it in perspective to where I can understand it. And I think we both can understand. My dad comes, he has his store, and I have my store. And I think the way you put it, and I think you kind of what we've been arguing about, or not arguing, but trying to talk about and figure out and the differences, you definitely kind of put it in a way that he can understand the way I can understand it. So I appreciate it.

That's awesome. Well, the other thing, too, that I'm gonna do is I'm gonna send you guys a link. It's coming out soon, in about two weeks, is that I just published. Published my first book called Limitless Real Estate Strategies. And so it talks about a lot of the things that we talked about here and a lot of things that I've learned and how I created my buy box. And I think it'll be fantastic for you guys to read and take notes together and kind of go through, and it gives you a lot of real life practical tips and tricks to where you want to go and why I did what I did, and it's going to help you learn through this process together.

Appreciate it. Thank you.

Thank you.

Well, guys, thank you so much for coming on. I appreciate it. And we will definitely be staying in touch. And, Hayden, you're going to go get your real estate license.

Absolutely.

Dad, you're not paying for it until he finishes. And let's. Let's get that knocked out. That's your first step. And then you start scouring for some homes and learning that. And, you know, I'm excited for you guys. I wish this is something I got a chance to do with my dad. I did get a chance to work with him in the real estate business for a while, you know, before he passed. But this is one of those things that I love to see what you guys are doing, and there's no arguments, right? It's only conversations. So just. Just keep talking through it. Agree to disagree and. Or agree to agree and keep moving on together.

Copy that, man. I appreciate you. Thank you.

Thank you.

All right, guys, I appreciate you. Have a great night. I hope you enjoyed that episode of the Real estate Revolution. I hope you'll join me in the revolution through stevedvalentine. Com. This is where the podcast the limitless Circle, Private mentoring, coaching, and all the real estate that we do, plus there's a few exciting courses in there as well that might interest you. Looking forward to connecting you soon. And I hope that you will share and subscribe this podcast if it had value to.