EP69 From Car Sales to Real Estate Success: Tony Romeo and Matt Young’s Entrepreneurial Journey

[00:00:00] There's always an issue, like you said, and it's how can you help that situation for those people? Many a times, and again, people that I brought with me, they can vouch for this. Many a times people say, hey, we went with you guys because there's actually a solution, not a, hey, we can try something here. We do have a solution. It's just, does that solution make sense to you? And if not, how can we make it make sense to you?

[00:00:23] From cornfields to high rises, office to industrial, houses to hotels, and every other asset class in real estate, we cover the people, the projects, and the profit. Welcome to the Investing in Iowa Show. This show is for go-doers, action takers, and business owners. It's for people like you who are sick of Uncle Sam taking a huge bite of your apple. If you're looking to get ahead of what's taking place in Iowa, learn who is doing what and how you can get in on the action.

[00:00:52] You're in the right place. Hosted by Neil Timmons, an Iowa native who has been involved in over $300 million in real estate right here in Iowa. Recording in studio from West Des Moines. Here's your host, Neil Timmons. I've got Tony Romeo and Matt Young here. Guys, welcome to the show. Thanks for having us. I appreciate you being here. See, for the audience's sake, who are you? Where are you from? What do you do?

[00:01:17] So, me and Matt, both Southsiders, born and raised. Southside of Des Moines, we went to high school together. We've been friends 20 plus years. Worked at two other businesses together. One was EPS. One was selling cars at a local dealership here in Des Moines. It's two aunts in Hyundai. Decided at one point that we wanted to do more than just sell cars.

[00:01:38] It is a good income. It is something to live off of, but we both have small kids. So, you're spending a lot of time there. So, it's like, how can we change this? So, one, we're still making a good enough income to live off of, but two, that we're making lifelong money like we were seeing the business owner of the dealerships making. Matt called me up and was like, hey, I got an idea. What do you think?

[00:02:01] And so, it just kind of started out just thinking we're going to buy Airbnbs. Problem is, where do you find them that are of value that we can make make sense? So, then a transition from that to wholesaling to finding the properties. Went to a mini mastermind on how to analyze and find a deal with zero or low money advertising costs.

[00:02:21] Just capitalized on that. Switched over to another mastermind. Both of these were out of state and literally probably just off of YouTube. I mean, they were just off YouTube, right? Or, I guess, where would boardroom come in there? It was more, yeah, recommendation. We kind of got to as far as the first program would get us. And we're looking for more. And one of the guys in that group was like, hey, you should join this with me. And that's how we jumped into the boardroom.

[00:03:11] Yeah, sure. They're like trying to scale to 150 to 200. And we're at like one to three trying to scale to 10. It's like... Do I jerk it from a firehouse? Yes. So, a lot of great information, a lot of good connections. I mean, still people I talked to as of today from there and we're not in it anymore. We switched over to a little bit more of a process style mastermind that's not in person. And then I feel like we've kind of got to a point where we've grown out that one.

[00:03:39] So, we're talking about maybe taking a year off of no masterminds and just kind of dedicating more time into the community here. I mean, that kind of brings us up to where we are now. And then like where we are now is we're trying to project the information that we've learned and put that back into the community by helping first-time buyers, first-time investors, and building that local presence more than like, hey, we're using other people's information from around the country. Take me back to the beginning.

[00:04:06] So, you guys are selling cars, extremely successful in that business, right? You guys are in the business for years. No. Why not buy a car a lot? Why not build your own? Why not continue down that path? Why transition industries? The thing was the Airbnb. Well, it's the... The fancings of it. You have to live there. So, it's like you hire somebody that's going to live there or you live there. So, I was already the general sales manager and I was working my way up to be a general manager.

[00:04:35] And I thought that's what I wanted to do. I was gung-ho. And then just the more I was there, the more I was there, it's like it's not going to get any better. I'm just going to be here more, right? And then with the young kids trying to find a way to not be 80 hours plus a year a day at a dealership. And then if you own it, I mean, it's more and more and more. But yeah. The kids is probably the biggest swing factor. That and the idea of Airbnbs. It was a fancy idea, you know, on YouTube land at that time.

[00:05:02] Unless it was the time when there wasn't as many on the market. So, it was more need for new people to come in to fill that. So, I think it was a little bit of both of those ideas. Tell me about the very first investment property you guys bought. So, we put about four deals together all at the same time. So, they kind of closed weird. But one, we bought a Lustrin home. It's like one of those Sears catalog homes, all metal. All metal. No wood on it at all. And we bought that, made it an Airbnb. And then... There aren't many people... There aren't many in town. And believe it or not, I've owned one as well.

[00:05:32] Yeah. They're awesome. And we still own it as of today. And it's... It does well. It was our first Airbnb we ever purchased and put together. And it still does just as good as any of the other ones slash better because of the uniqueness of it. Yeah. Yeah. I think we got $140,000 in it. And it does just shy of $40,000 a year. That's incredible. Well, you know, almost instead of like cleaning or painting the interior, you could almost power wash the interior. Yeah. No, we did like a deep degreaser and wipe it down. That's all we did. Yeah. It's a cemented paint.

[00:06:01] So, you actually don't want to paint it because it'll never actually hold for a lifetime. It'll start to peel sooner than... Everything's hung up by magnets. Our smoke protectors are hung on magnets. The wall decor is hung on magnets. It's all magnets. The roof looks like it'll last forever. It will, but it looks like it. It does look like it. I mean, or... We have no issues on there. Yeah. We do have a little, like a sunroom. So, like a three to four season patio sunroom attached to it. And it's got a... It was an album. Yeah. A hundred percent.

[00:06:30] And ours is actually reversed. So, the back door's our front door. So, there's two models. They're identical models. They're turned around. One's twist. One's... So, we walk into the kitchen instead of walking into the front door. But it's... We like it that way just because it makes the backyard slash back area more inviting too. You know, that way. But you do walk into the kitchen. Not a bad idea when you're, you know, bringing groceries and you sit right on the counter. So, you know, walking through the whole house. But how old's that house? One, I think.

[00:07:00] The original roof. Yeah. That's the piece I was going to... Yeah. Yeah. It just blows me away. Some of the construction because I... As, you know, as we'll talk here a little bit, you know, the insurance costs that all of us deal with today is wild. A lot of it has to do with all the roofs right at the hill and then that it comes down on it and then shales just still last. Yeah. But... And then it's expensive. If that roof did get damaged. Sure. How do you replace it? Yeah. You know what I mean? Yeah. That's going to be tough. All right. So, you turn that into Airbnb. Airbnb. It's one of the first ones. You know, it was the first one. Yeah.

[00:07:30] Yeah. How did you decide it, you know, when it came to the decor, the, you know, kind of the sexiness? Uh. Because that's a lot of times it seems like that's what's needed. Yeah. How did you decide to build, to go and give it a life and furniture? My wife took the rings on that one, did a lot of that. We had some Facebook marketplace finds, but luckily my wife was excited about that one and she ran with it. And so that one we got lucky on, but the ones after that, Tony and I kind of try to piece

[00:07:59] stuff together and it was like, or we shouldn't be doing this. So. So you didn't learn anything from the first one. Oh yeah. Exactly. It still worked. Well, it could have been. Yeah. But it did still. She did help us a little bit, but we started adding them quicker than she wanted to be involved. Yeah. So. Yeah. No, I totally agree. All right. Give me the numbers. Cause I lost it where I was so excited about that. The cement brick house, which is not really, but. The impenetrable house of this thing is 140,000. That's what you're all in. All done. Yeah.

[00:08:28] I mean, mine has kind of been filling it with the furniture. Sure. You might have 6,000 in furniture. It's a rule in 150 on 150 and 40,000 a year gross on the Airbnb side. Yeah. Yeah. Yeah. Yeah. It's just incredible. Yeah. And that's a two bed, one bath. So that's killing it in Des Moines for a two bed, one. Yeah. Sure is. Yeah. Yeah. And what year did you buy it? It was 2020. 2020 was the first year. Yeah. Okay. You do a few more Airbnbs. Walk me through it.

[00:08:57] When you, when you decided to do some other things past Airbnbs, what was the next thing you did? Well, we, the next couple of properties we bought were long-term rentals. At the time COVID just happened and they let you borrow a hundred percent of your 401k, no penalties and no payments. So we took my 200 grand and we just started burning as fast as we could. And so we, we did a few of those. And then we realized we still got this, a little bit of a marketing budget we're spending and we're not selling anything.

[00:09:23] So then we started leaning more on trying to figure out how to wholesale some of these deals that kick up some cash to a barrier under ourselves from our marketing spend. What has you go into long-term rentals versus stay with the Airbnb model? I'm still. Ditch and deletes. Yeah. Cause they were just smaller houses on the East side. We bought a package deal with two houses. Um, and it just wouldn't know. Yeah. What you're saying is the property lent itself to long-term, not short-term. Yeah. Yeah. That's right. Yeah. Yeah. Yeah. Okay. Got it. All right.

[00:09:51] So you're, uh, you're, you're burning through money. Kind of not really. It's just getting tied up in things. Yes. And so you need to, you need to make insurance of dollars. So the idea is let's wholesale and start putting some things in play. How'd you go? Sounds like mastermind, but maybe Tony a little more. How'd you go acquire the knowledge to go, to go do a wholesale piece? Cause a wholesale versus a long-term rental or short-term rental, it seems like a long-term rental is like might be the easiest. Everybody gets the idea of buy a house, stick a renter in. Yeah. It was a few other things, but yeah. All sales, a different game.

[00:10:20] So we do have the sales background from the dealership. We get the, the lead generation conversion outside. And the mastermind we were in was actually teaching us how to market and find leads cost effectively, you know, a little or no money, but more time. And we had more money than we had time to market. And we are already used to, you know, paying for leads at the dealership, not our money, the store's money, but I got the concept. So we were talking to our coach and he's like, well, this guy's just starting a company doing done for you lead gen.

[00:10:50] And so we were like, oh, I was signed up with them. And, um, he started sending us leads and it was a pretty natural progression from there. Yeah. We get the lead, get one of the phones at the appointment and got to figure out something to do with it after that. So how did you learn? I understand you knew sales, but how did you know the sales process as it relates to real estate or because the process is a process. I'm a processed sales process driven person. So I get that part, but we had the coach. So we get stuck. We send him a boxer.

[00:11:20] He walks us through it. The next step. So he kept telling us, go as far as you can see. When we get there, we'll see further. So we'll just, we'll go. We got, we're a little risk adverse. So we'll just run, you know, figure it out. Yeah. You got to build that, build that airplane or build the bicycle as you ride. Yeah. Yeah. And just figuring it out as you go. Yeah. Yeah. Problem solving. All right. So you figure out how to get a list or figure out how to market people, um, through generating leads, right? Buying leads ultimately. Yeah. And then you're going and running appointments. You're doing these face to face.

[00:11:49] Yeah. Remember, we did, uh, we walked or we've had a partner walk and yes, out of our realm. But again, though, we've only done a couple of deals like that. Yeah. 99% of the deals. Buying leads. We have been in those houses. Okay. And then, uh, all right. Got a deal under contract. Now what? Cause now it's, now it's a little new for what do you do with that thing? Yeah. Yeah. That's, that's what our coach kept telling us. We're like, well, we want to get 10 of these under contract. He's like, slow down. Why don't you get one under contract and see if you can find the buyer? But really, I think more than trying to find a buyer in the beginning,

[00:12:19] we struggled getting hooked up with a title company that wanted to let us wholesale, you know, having, having a conversation and, you know, figuring that part out. Cause a lot of them would tell us we're crazy. Took us a little bit to figure that some sound. I'm saying it's illegal, but we knew it wasn't. Yeah. I just didn't want to do it. Yeah. Which it was. Yeah. It was when it came, uh, like, uh, like, uh, lawyers and, uh, title companies wise. But then again, problem solving, figuring out who can, who will, and then process that out

[00:12:48] to make it make sense in scale. But I think in the beginning, we found most of our buyers from the Facebook groups. So just posting a deal. And if it's a deal, then you should be able to get it sold. You know? Sure. Yeah. Okay. And then, uh, so you get your first one done, get it wholesale. It feels like a solid fit. And you guys, what do you do from there? Fast forward and just do more of it. We did more wholesales, but I felt like we kept getting in that trap of we wanted to buy everything. So we kept getting in. Well, we liked heaps of steel, liked heaps of steel, liked heaps of steel.

[00:13:17] And then we'd keep getting behind on our marketing and spending, trying to work through that. It took us probably close to two years to get out of that rhythm of just buying too much, which looking back, I don't think we bought too much. It wasn't a bad thing. But yeah, definitely. Just from now we're, we're more to the point like, yeah, we would love to keep the house, but we know that we should wholesale it, you know? And a lot of times the wholesalers are just going to keep all the good stuff. And we've learned that we'd love to, but it's not the best decision. Sometimes you got to sell the good ones too.

[00:13:46] Sometimes the good ones have the biggest paydays, right? And that cash speed also may be recycled and set the business off more in the end to get their house. It's a real like equation on future of money slash current. That and learning that we need to borrow other people's money and do our deals. So in the beginning, we were using all of our money. So it doesn't matter. You make 60 grand and you spend 80 grand to put more deals together. Yeah. You still have no money. Right. So once we learned that we should be borrowing that money from somebody else and just making

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[00:15:06] They're not long-term holes, right? Right. Yeah. No, no. They fire the property. And then, yeah. So we did either borrow someone's money to buy the house, or we do a lot of creative things where we'll give the seller some cash and then have a contract term to reposition the house. So if we give you some money now, maybe you give us six months, we'll give you the rest of it. Or some kind of creative aspect of that. To get deed was the most important thing for us so that we could fur it and get it refinanced. To people. Sure. Yeah.

[00:15:36] But rates are low. We try to burr everything that we could make sense out of. Yeah. Did you sort of fix it in flipping at some point? We did. We weren't very good at the fix and flipping. No. Yeah. Why? We're not detail-oriented people. And we're trying to find deals and also to property manage slash project management. It's just like, we can't. We also have to reinvent the wheel. It needs to be there. And we were everywhere but there because we're trying to get more deals. So it was a lot of time was this.

[00:16:05] Also, we were doing everything on our own. Now we have a small team. So it went throughout us having to do every single aspect of everything to now we have delegated out positions slash things that need to be done per deal, per month, per whatever that situation is. Now we're trying to manufacture those people for the position instead of finding a general contractor or somebody that could just take it on and take it off our hands. Yeah. So that was our problem in the beginning. So at this point, have you stopped? It sounds like you've learned a lesson. So we have a stop. Not stop.

[00:16:36] Yeah. We do a lot of cleanups. Don't GC anything. Yeah. So we'll just pull in somebody that can do that whole side of it without us having to nitpick or look at things. And we'll do smaller stuff like if it's floor paint, you know, lipstick style or like rental turn stuff like that. We have a dedicated guy for that. We have anything more extravagant than that. We're really trying to push it to like a dump huge C service type thing. Yeah.

[00:17:02] It just makes more sense because again, us finding more deals puts more money into the business, puts more long-term holds in our portfolio. Do what you're good at. Don't try to redo the wheel. So you're wholesale today. Now do you hold tail deals as well? Yes. Actually, the last couple of deals, I'll say at least two since you started becoming a realtor. At least two of them in hold tails. Yeah. No, more than that probably. Yeah.

[00:17:31] So about six months ago, I became a realtor because at the beginning of the year, we thought we were going to be flipping like crazy. And so coming out of 2020, we had seven, I think in the pipeline, this big flipping. And that's when we realized, man, we're not doing this right. They all took way too long, very little profit. And then we kind of transitioned back to let's just try to sell everything as is or sell them on contract or lend the money to the flippers if we have it available, but maybe spend it so quick.

[00:17:57] But yeah, from that, if it makes sense to hold tail it, our first option would be wholesale it. Right. And if we can wholesale it quickly, we would do that. But sometimes even we're kind of learning that we would be by best even taking a lower number and moving that thing versus us closing it and taking it all the way. But now that we are our own realtor and building that team, it makes more sense to hold tail some more of those that we would have preferred to just, yeah, just move on the wholesale side

[00:18:24] because we can pick up some buyer activity for our buyer side of the retail team. Do you novate at all? We've done a couple of novations. I think now as being a realtor, it makes it a little more complicated. It's not in that listing by any means, but someone could say it is. But if we were to novate it now, we'd probably just do a no commission sale and then take it all on the green MT side. All right. So what I hear you saying is ultimately you've got a giant marketing machine today. You're generating tons of leads, right? Bringing these things in. Leads.

[00:18:54] I don't know about tons of leads yet. Always a little more. And then go to the apartment, you're there face-to-face. Ultimately, sales is a problem solution business. I mean, you're not, you're there to buy the house, but really you're there to solve a problem. Those in the business solve problems and ultimately the outcomes are real estate solutions. And then on the backside, it's wholesale, hotel, novate on occasion, fix and flip, long-term rental, short-term rental, and then long-term contract sales.

[00:19:24] Did I miss any of that? Well, short-term contract sales. Okay. We'll do that as well. Like if we can get it subbed to or buy a contract from the seller, we'll sell it to a flipper as if we're the private money lender. Yeah. Money down and just do a short-term turn on that. We've done that a handful of times. And so exits like that, but anything we could not have to do the deal and still be part of it is what we prefer. Yeah. And then if we do have to do the deal, we're building out some better processes where we're not actually the ones managing the rehab.

[00:19:54] And that's, that's been working a lot better. Let's talk about, you know, ultimately sub two at the wrap and then the contract on the backside. So sub two for the, for the audience to say, who maybe don't understand it at a very deep level, what's a sub two? So subject two would be, we take over with that underlining lien, the first position mortgage staying in the seller's name. So we would get deed of the property. Lien would still say, stay with the seller and their name.

[00:20:21] We would take over payments, making those payments to that lender. We'd now be responsible for taxes, insurance, maintenance, and those payments. And we also have deed. So usually what we do in those situations is we'll give some cash to the seller at closing

[00:21:02] for their equity. And they're going to have a higher interest rate, right? Eight, nine, 10, 12, whatever, whatever the interest rate happens to be. Yep. You're a, presumably you're making a spread in a couple of ways, probably reselled it for a little more than what the underlying debt is when you paid for it. Right. And then you get a heck of a great spread of suspects because the interest rates spread. It's like fantastic. And that's where you're getting pretty good cash flow. What type of cash flow do you end up in that position? What does that look like? Just give me one example.

[00:21:32] Versus, you know, your standard bread and butter long-term rental. Yeah. Long-term rental also is you're outlaying like a lot of cash. Yeah. You probably suspect in these, you don't have as much cash out the door. That's what we like about this scenario because same house, we try to get it pretty close to what a rent payment is going to be. Maybe a little bit more to get your escrow and stuff in there. But we don't have to replace a furnace. We don't have to replace an air conditioner, right? So a lot of times when you're underwriting your rental, you're going to hold it for 15 years.

[00:21:59] You want to make sure that when you're buying it, you have those costs built in. And so we can go in there, do a light cleanup and try to get as much as our down payment that we put in back. So have very little cash stuck in there, maybe six to $10,000 in the deal. And then turn around and sell it and getting anywhere from a $650 to a $1,200 a month cash flow. And with no- Positive cash flow. With no rent. With no maintenance. That's cash flow on monthly basis. Yeah. With no maintenance. No maintenance.

[00:22:26] Because these people come in and they're putting real money out of their pocket to be a home owner because they're lying on contract and ultimately you've made them a homeowner. Yeah. They don't call the bank about their AC going out. So- No. Yeah. You've become the bank there and they take pride of ownership in that. And before you know it, they have fixed your collateral and improved it in the value of that. You hope so. Yeah. But we buy shitty houses. So if we get a shitty house back, it's all right. Yeah.

[00:22:54] Well, it's not just that vein of houses. You run the gamut of houses because I've seen some of the stuff you've got that there are. They may be in not great condition, but there are some addresses that you guys have dealt with out the ground, some fantastic homes. Oh yeah. No. I guess it's a good- Multiple hundreds of thousands of dollars range where there may not be in good condition, but that is a tremendous opportunity for somebody to come in in a fantastic neighborhood and make it there. We've had multiple deals on Kingman. That's a known street in town with the high-end properties.

[00:23:22] I mean, just for an example, one of the first deals probably was within the first 10 deals that we ever did was on Kingman. And I mean, we sold it for, I think, $65,000. Did have a little bit of foundation issue just on one wall. And then of course, we needed a full interior next year. But there's actually, it's on the market right now for $389,000. And the guy lived in it for two years. So it was a real owner we sold it to that does his own flips. He remodeled it, lived in it for two years. Now they found like a little acreage.

[00:23:50] So he's selling that and he's going to build on this acreage with his brother. But I mean, that's an example. I mean, I don't know what his total like rehab costs for him, but he's going to make money and he lived in it. Yeah. So it's definitely people get some good deals. Yeah. And that's just one option. There's just out the grand, like you've said, we've had deals in Waukee. I mean, nicer suburb neighborhoods. We got an acreage in New Virginia that we ended up selling to the neighbor.

[00:24:16] They took 75% of the acreage, kept the land and then rehabbed the house and made a hundred grand. Wow. So the neighbor did, this is you making the money. No, we made sold to somebody. Yeah. We made 20 grand wholesaling it to the neighbor. But that tried stealing the deal from us, but we kept it together and sold it to him. And then he took, you know, the chunk of land that's connected to his land and then sold the house with a couple acres on it. Yeah. I think he was in something and he sold like one and a half and kept 10. Yeah.

[00:24:46] It's surrounding the house, of course, too. Made money and ingreased his land by 10 acres. Yeah. It's a great deal for him. Yeah. Yeah. Good, good deal for us too. How have you guys had to change and evolve from day one to today to become what you guys are at White Adults? Part of it, becoming a realtor and taking on that retail side. Just working through selling these houses on market. We were frustrated consistently with negotiations and stuff like that.

[00:25:16] Do you think that's because of your sales background? Oh, yeah. That's right. Probably. We would tell them what to say and they either wouldn't say it or they would say it in a different way that doesn't put the true meaning out there of what we're trying to get across. And so, yeah. But at least two realtors that we had gone through, many we've tried, but at least two of them we caught not saying what we needed them to say to get the overall issue fixed or whatever that problem was at that time. But that's the biggest thing is most people don't know how to talk to each other and it's,

[00:25:45] yeah, just be basic, be direct, be transparent and figure out a situation. And a lot of them don't want to. They're just used to throwing on the market, waiting for someone to call. Yeah. Go look at it. Okay. Send me a contract. That's it. Yeah. And well, when they, when the days existed that you just list a home and eight contracts come in and they just pick one. I mean, is that really selling? No, no, it doesn't. They're glorified marketers and they're not even marketing their brokerages. So it's like, yeah. That's the reason we've been marketing.

[00:26:15] The brokerage, you didn't either. And the MLS is marketing it. MLS and the sales price is marketed. Yeah. I love, I love how you're the one conveying this, Tony. I'm not a realtor. Yeah. I never wanted to be realtors and it changed. Yeah. Well, you've got to evolve, right? Isn't that, isn't that the nature of business as a whole and an ever-changing marketplace? Yeah. And interest rates have, we've seen since in your career, four years, the highest devised and then all of a sudden interest rates double in a year.

[00:26:42] Five-year treasury going up in a year, which hasn't happened in the existence of the five-year treasury. So it's just, you have to be able to bob and leave if you will. We've had sweet moments in the market and we've also had harder moments in the market. So it's one of those things where at least we have felt both ends. And so we, we are ready in case there's another extreme change, but also too, we know what it's like when it's sweet. Yeah. But you can't look back too long because you are moving forward or trying to at least. Yeah. You guys do a lot in this community.

[00:27:09] Plug in and so that we know each other through the community here. And one of the things that I think is unique about you is you welcome newer people. I was going to say younger, but not necessarily younger. I mean, people, all they just, you know, newer people to the business who want to get in. They want to get their first deal done, whatever that happens to look like, whether it's short term rental, long term rental. Or just kind of a more, you know, vanilla deal just to flip. That's one of the things I think is unique about you. And you often brought a whole bunch of newer people out to them. Hey, come walk a deal with me.

[00:27:39] Come to the home. Come meet the homeowner. Yeah. You go walk a house. I'm going to convey to you and talk you through what I think as we walk through this. That's one of the things I think. Just this week, I brought in two first-time buyers that have never done a deal before. Just this week to two different appointments. I do it often. I'm not afraid for them to see who I am, what I'm doing, where I'm at, and what I'm saying. Because all of it is transparent. I pull that out to them once I do, you know, present a deal to the community as well.

[00:28:06] So it's like, but a lot of it too is like they have a mindset because you see the really, really sweet things on YouTube or maybe hearing it from somebody else. You have no idea what actually goes into the back end of it. And I really want to show them the back end of it so they have a clear sight of what is actually happening. Not like, okay, this is super sweet, easy. I can, but you know, advertise for almost no money, get a deal, make some money. And yeah, it's like, there's so much more that goes into that. Well, that money's made up by. Yeah.

[00:28:36] Here is money. I mean, did you sign that contract? Yeah. You should know that you already, you already ultimately. Yeah. And there's a lot of things that have to go into that right there. A lot of equations and a lot of specific situations will always sway that number, sway that situation too. And so it's definitely something you have to think about as you're trying to close the deal. That's another reason why we became realtors too. So we're not just showing, Hey, here's a low cash offer. Take your leave and we'll talk to you later. It's a, Hey, I understand you're where you're at right now.

[00:29:05] Now here's a couple of options. We don't care what option you take, which one makes the most sense for you. And then that way it's more of a yes or yes, not a yes or no. But then also too, it's just, we just doing this four years. I don't know how many deals total, but I mean, well over a hundred deals. It's like, yeah, a couple hundred. Now there's always an issue, like you said, and it's how can you help that situation with those people many a times. And again, people that I brought with me, they can vouch for this many a times people say,

[00:29:33] Hey, we went with you guys because there's actually a solution, not a, Hey, we can try something here that we do have a solution. It's just, does that solution make sense to you? And if not, how can we make it make sense to you? A lot of people are just one-sided. Hey, here's this is what I can do. Take your leave it. I want them to tell me what needs to happen. And then, Hey, how can we make that make sense to us as well? And sometimes it's getting the house cash offer. Sometimes it's just helping them clean it out and list it.

[00:30:03] That completely are like, Hey, you need to clean all this out. It's probably going to cost somewhere around here. Call me back when it's done. Well, we'll actually step in and help them get through that process. Because a lot of it is just like we were talking two seconds ago about people not communicating with each other. They don't know who to call or they don't want to call, or they'll call somebody out of Google. That's the highest number there. And then now they're like, I can't do this. So clean out bid for 3,500 bucks. Yeah. Knock out $800. Yeah.

[00:30:30] And so it's kind of crazy to me, but again, it's also, that's where we're niched is, Hey, we can help in so many different aspects, or we could take a step back and help you on a minimalist one. And you guys can have more of the money, but like, how much of this can you do? And how long is it going to take? We can get it done for this in like this short period of time. So what makes more sense to you in your timeframe as well? So we have a time, we up with problem solving.

[00:30:57] We help with overall bigger issues. Sometimes it's legal stuff. You'll have somebody pass away. Then all of a sudden you're in escrow, cancel something for a certain period of time. There's just so many weird situations that we've gone through. So we have that experience. We can actually express that to them. Like, Hey, this is how it will go. And then this is just, I mean, you can ask again, our lawyers or whatever for that feedback to make sure that it is like a guesstimation time that makes sense and what that situation is.

[00:31:26] But yet we do have that backing too, because of that experience. And also too with, uh, you know, just like talking about a situation, but again, being upfront with them, like, Hey, I know you might think it might take 30 days, but this situation that you're in because of something you're caught with a legal situation that you can't do until this time. Um, and just a lot of other, like just cash only real estate or real investors or wholesalers maybe have not been through that situation or that situation popped up and they've walked out. So they just never worked through it.

[00:31:55] So again, problem solving situational. If you're a house flipper, execute the burst strategy or do double closings and are in need of money. Little Guy Loans is your go-to lender here in the Des Moines area. Time is money. Loan approvals in 24 hours. Closings in five days. Little Guy Loans was founded by Neil Timmons, an investor just like you. Since he has been in over 10,000 homes in Des Moines, there's never an appraisal.

[00:32:23] Houses, multifamily and commercial property loans up to 1 million. Check out www.littleguyloans.com. The whole thing ranges. I mean, it ranges from a homeowner who doesn't want the house anymore, who has, who owes no money on the house, right? The options that you can provide them look different than to the other extreme. Yeah. Somebody who has two mortgages on the house and they're behind on both mortgages in the house. And then their spouse died. And all of a sudden now you're into, or they died.

[00:32:51] And now you're into probate with kids involved and mortgages that are behind. I mean, that looks like another host of options. Yeah. Another whole completely different path you have to go down in order to solve that problem. Mm-hmm. Yeah. And a lot of them didn't even know that those were problems until, you know, a title opinion comes out or something like that. There's a lot of hidden problems too. Just as an example, a deal were doing the first of the year, it was 11 judgments.

[00:33:17] Anything from parking ticket all the way to charge-offs on credit cards and everything in between. And of course they weren't upfront with me at that time, but I have the experience to know that like those can all get taken care of. Back when we were first starting, it would be like, oh my God, there's 10 judgments. We can't do this deal. But I mean, we've worked through so many that it's like, it's almost like I'm always thinking that there will be an issue. So I'm already thinking about what that solution will be prior to finding out what that issue is. But yeah, that's a perfect example.

[00:33:46] There's 10 judgments of over $10,000 total. So it's like, they're always doing things. Oh, hey, give me a call. I got this letter. I need to go over it. Yeah. It's like they already lost their house in a tax sale that they never mentioned that they were in. Yeah. That issue too, because the tax sale was through the dead mother who they didn't know was dead at the time, but was dead. So the tax sale actually didn't go through. So they did own it. But then now the tax sale is being redone through the sons that were living in it.

[00:34:14] That's a super unique situation that we didn't find out until like week of close. And then once we found out that was the clothes out a little bit, because then we had to go through and do all the tax sale stuff. The dude had like four socials. Yeah. He was not on the crazy up and up, but also too, it was a house that took him seven 40 yard roll off dumpsters to clean the house. Well, so just as a picture idea of what that situation was, they weren't the most community

[00:34:43] friendly base people. Yeah. You know, the, everything is mission. My experience is that I want to hear yours. The more complicated it is, the more the hair that's on it, the more time it takes. Two things happen. One, the competition goes away. Oh yeah. No idea how to solve it. Two, the paydays are the biggest. Can be. Sometimes they're a thin deal just to make it go through to save them from that situation. But also too, it can be super big home runs too. So it really just depends on the asset that you're fixing the problems for. Yeah.

[00:35:13] Yeah. But we've had both. We've had ones where we took a super, super skinny deal just to make sure that those people got out of a super bad situation. But also too, we've had a couple of home runs as well. So it's like everything averages out. 2025. What are you most excited about? Doubling up our marketing. Yeah. We're not leaning hard. So it's got our mess of everything we've done up till now cleaned up. So we got our monthly reporting down, our KPIs dialed in. We're doing great on our leads to contract conversion.

[00:35:41] So that number is really, really good. So we're just going to push that until we can't switch it any higher. So there is a diminishing return. We'll start spending more to get higher price per lead. But right now our numbers on the marketing side look really well. We want to lean in and try to double up. Yeah. It's exciting. You guys ready for the final three questions? Sure. I believe so. All right. If you had one piece of advice for your 20-year-old cell, what would it be? Buy Bitcoin. Yeah, right. Isn't that the truth? Oh, heavens. Yeah. I mean, I'm joking.

[00:36:11] I talk about that all the time, but it's 100%. 100% when I would tell my 20-year-old cell. So with real estate, we always say we wish we could have bought more. If we stick to just a real estate idea, we always say it's never a bad idea to buy more. Because again, it depends on what your mindset is. But the first couple of houses that we bought are 50 to 100 grand of equity in four years.

[00:36:38] So it's like if we had double the amount, we'd have double the amount. You know what I mean? It's like so it's just thinking back then as don't be afraid to start sooner. A lot of people want to wait, but what are you waiting for? You know what I mean? A lot of people, because I'm kind of known as collecting the new people, but a lot of people are like, oh, yeah, I think I want to do this in about a year. Or, hey, I think I want to do this, but I got to get some of the stuff cleaned up over here. Those really aren't problems. They just don't want to actually start.

[00:37:06] And that's all is like just they don't know where to start. Yeah. Well, I mean, yeah, that's kind of what we try to help with is showing them that path of the start. But start like don't be afraid to jump in. And it's all problem solving. No problem can't be solved. Just take time, money, energy or thought. Figure it out. Matt, are you buying Bitcoin today? I don't have any Bitcoin today, sadly. All right. So here's a question I often ask myself and I'm not looking for an answer, but maybe just to see the point with you 20 years from now.

[00:37:34] What are you going to wish you told yourself today? I'm going to buy some. Yeah. Last couple of times when I was planning to, I had my IRA money lended out. So they were already stuck. And then now it's higher again. So I was like, just put myself in a weird spot every time I've tried to do that. But I will get it done. Here's what changed your life. Seven Habits, Highly Effective People. And let's see. Fraction. Fraction's a good one. Profit first. Yeah, profit first. Never mind.

[00:38:02] If you were cast away on an island for one year, you could only get three pieces of data about your business each and every month. What three things must you know every month to know how your business is right? I mean, if we weren't, if we were more of management of business and not actually running business, if that's the mindset, it would be... You know what's in our pipeline, money coming in, how much we have sitting in our accounts, and then how many contracts or how many leads it takes to get a contract. Guys, this has been a fantastic conversation. I've asked lots of questions.

[00:38:31] What's one question I did not ask that I should have asked? I'm just throwing an idea out because I can't think of anything. But like a 90-day, sort of like thinking, hey, what are you going to do for a year? And like maybe what is your immediate changes now? I mean, we do have presidential change, economic change. There's so many quick changes coming up here January 1st or early January.

[00:38:52] I feel like we're at a good point now where we have our numbers dialed in that we can actually put thought into what that 90-day, 180-day, year, five-year, 10-year plans are. Does Traction help with that? Traction helped a lot with that. Do you implement US? Implement US? Ish. Yeah.

[00:39:13] So we're kind of getting out of this mastermind, but we've added basically a COO and we meet with him every Thursday and he's helping us dial all this stuff in and we're doing those kind of meetings with that every Thursday. So we're identifying roles and mapping out so we can start plugging some more people because basically that's our limiting factor is the two of us are still trying to do too much stuff. So we're mapping out what needs to be done and what we can take off our plates so that we can have more effective versions of those meetings.

[00:39:43] And implementing the right people in those positions or those things. We say it all the time. We know what we need to do, but we don't do it alone. You know, like we still are doing the wrong thing. And even though we know the right thing, what we should be doing sometimes is you got so much stuff moving. You just got to get it done. The other way we talk to you know what he should be. Right. Yeah, exactly. Yeah. It takes a whole different set of things to actually do that. Tony, what I heard you say about the 90 day pieces is breaking things down. Yeah. More tangible because we think about what do I get done in a year? Cool.

[00:40:13] Now, how do you break that down? Quarterly rock. Right sized pieces, right? How do you need an elephant? Because that's how it is implemented. That's right. By breaking it down into, OK, hey, this goes into the quarter. This goes into the month. This goes into the week. This goes into your daily process. So that's something that Matt's taught me a lot about still trying to implement it going down that low. But also, too, it's something that's put us in a way better position today than we were. I mean, we were just saying, I'll change it.

[00:40:41] You know, now we're at a point where we're at least trying to do the same things each day to bring us closer to another deal, closer to another close, closer to another. And so, and again, finding those people that can help with those things so we can dedicate mind and thought and action to other parts of the business as well, too. Not all partnerships work out. What makes you guys work so well together to where this relationship does and obviously has worked for years and years?

[00:41:10] Yeah, I would say full trust. And then also, too, our positive and negatives are opposite. I truly believe opposites attract. Me and my wife are opposite. I feel like him and his wife are not completely opposite, but definitely have opposite traits. We definitely have opposite traits. I'm more known as the face and the closer, the runner. He's more of the processes, the mindset, the planning. And we understand those roles. And he, I trust that he's going to put us in a better position.

[00:41:40] He trusts that when I'm going into a house, I mean, we have a high probability of something happening there. So I feel like trust mixed in with opposites attract. Would you say? I mean, I would say for sure that. Yep. Knowing our role, staying in our lanes and having trust each other, for sure. A lot of partnerships, I feel like you're getting the same exact people, same exact ideas, and it's never going to work. That and never want to do. It's not always 100% 50-50. So sometimes someone's going harder than the other person and it's just going to work out.

[00:42:10] I mean, you got to have some faith in that. Some days it's heavier on one side, but some days it's heavier on the other side. Everyone, both are, you should be doing something, but it's not always 100% even every day either. And that sometimes people get so locked up and like, hey, you're not doing anything. It's like, well, are they really not doing anything? Because they probably are. That's 100% right too.

[00:42:32] A lot of people just become jealous of the other one not doing it or of the other one not doing as much when you feel like you're doing everything. But also too, it's this we're on two completely different sides of each individual deal that he knows that my 100 might not be that day. But as soon as he gets his thing done, my 100 starts. And then he's at zero and I'm at 100. But then it's trusting that other parts of the business are being taken care of as well too.

[00:43:00] So many parts that swing so fast. Yeah. And we're good at just jumping on the phone, figuring out a situation right then or there. I guess I really appreciate you taking the time to connect and come in here. For those who want to find you, follow you, connect with you, where can they go? What should they do? Look us up online. We got Sell Direct Iowa for our off-market investor side. And you can reach out to us if you want to find deals there. And then we have the My Realty team for the retail side may help you find deals.

[00:43:25] A lot of realtors can help you find investment properties, but not everyone has a pipeline of off-market deals. Or we can serve those up. So that website's MyRealtyIA.com. Links below the show notes for everybody. Guys, appreciate you being here. Absolutely appreciate it. Thanks for listening. If you're enjoying the show, may I ask a favor of you? Naturally, subscribe so you never miss an episode. But would you rate and leave an honest written review on Apple Podcasts? It does a lot for us here at the show.

[00:43:54] And I appreciate reading your thoughts. Great guests make for a great show. If you know of another island who would be a great guest or you yourself have interest in being a guest, well, get on our radar. Visit Investing in Iowa to fill out an application or recommend a guest. And if you want to connect with me one-on-one, go LegacyImpactInvestors.com. Click on the Invest With Us button in the top right corner.

[00:44:21] And there you can pick a time for the two of us to get on the calendar and connect. Until next time, keep investing in Iowa.