Transcription
Jason is living the dream because he's flipping 60 homes per year and generating massive profits, while for every piece of his business, he's found somebody to come in and be an expert at. So, he's orchestrating and not even going into any homes anymore.
Jason's ability to be creative and adapt to real estate and run with real estate and do what he really wants is what's appealing. And he's so young, it's inspiring. I mean, you just came on the call and said, "I signed four deals this morning." So, that's exciting. I know people are going to like that.
Yeah, man. No, thanks for having me. And I am in the Wilmington, North Carolina area. So, southeastern NC down by the beaches. And we primarily, we started about, I say we, I mean I started about six years ago, uh, 2019, uh, around this time towards the end of the year. And my business model from day one has been flip single-family homes to drum up capital, um, including flipping manufactured homes. We do a lot of those and then use that capital as down payments on commercial, multifamily, RV parks, and the, and the like. And so fast forward to today, we are currently flipping around 60 houses a year. And, you know, maybe 20 to 25% of those are really more of who tails than flips. And, uh, the rental portfolio consists of four small apartment complexes totaling 60 doors and a 33-pad RV park, a couple single-family homes, and we just finished rehabbing an oceanfront beach house in Carolina Beach that is going to be our first short-term rental as well.
Awesome.
You, sir, are crushing life.
Yeah, that's a lot.
How did, how did this all start out for you, man?
Uh, was your first deal?
Yeah. You know, it's funny. I, I always had interest in rentals, but I initially just thought I would do it the slow, boring way where you save up money over five years or 10 years for a down payment, you buy a cheap rental, and then you wait another five or 10 years till you save some more for another down payment. And so I thought that I would build a small rental portfolio while I still worked my day job and then maybe in retirement I'd have 20 or 30 rentals that were paid off and I'd be sitting pretty in retirement. But then when I was under contract to buy my first property, which I intended to be a rental, I went to a friend's wedding and he was like, "Hey, that guy over there flips houses. You should go talk to him." And I went and I talked to that guy and I think he had flipped about 10 houses at that point. And I told him I was buying this rental and he got all excited. He's like, "Well, man, you, you should check out the Bigger Pockets podcast." And that, that's all she wrote, man. I, I started listening to that, you know, back when Brandon and David were hosting it. And I got addicted. I went back and listened through every single episode before that. And my eyes were just opened to things like hard money and private money. And I'm like, "Wait a minute. You mean to tell me all I have to do is find a great deal and somebody will fund all of it? Like even though I don't have any money or experience?" And I was crazy enough to try it. And I pretty quickly, I honestly, I got lucky. I found my first flip, uh, really soon, like within a few weeks. And it was a double wide and I found a hard money lender even though it was a double wide and even though I had no experience, I found a double, uh, a hard money lender willing to lend me 100% of the purchase price in the rehab. And then I leverage, leveraged my credit cards to do cash advances through, uh, Venmo in a way, actually, to be able to buy the materials that I needed and get the money for the closing costs to be able to, you know, close on the purchase of it. And then when I sold the property, I paid the credit card back off for the materials and then the contractor got paid from the draw schedule once his work was done. And then we sold that one and, uh, walked away with a net profit of a little over 26 grand. And that was really the proof of concept for me.
So when you said even though it was a double wide, are you saying that hard money typically makes, they don't use, they don't actually lend on, on, uh, mobile homes?
Correct. Most of them do not.
So what was the lender that did?
Yeah, that one was, it was called Carolina Hard Money. They're based out of Charlotte. Um, however, now if you know, if I need a hard money lender for it, if, if all my private lenders I already have tapped out, then now I'm mostly use Kyavi because about a year, a year and a half ago, even though they don't really advertise it, Kyavi started, uh, doing loans on them as long as they're already on a permanent foundation.
Got it. Well, shout out to Kyave, sponsor of the show unofficially.
There you go.
I, I've had great, uh, luck with them as well. Oh, them and Renovo, actually. So, not for hard money, but for my DSCR lending. Um, they've been great.
Yeah. Yeah, I've heard great things about them.
So, all right. Um, fantastic. You had done that, uh, double wide deal. It, they provided 100% of the lending, but then I was, uh, wondering what did you need the cash advances for? Was it for the rehab itself?
Yeah. So the first part, the where I needed money was I had to bring about eight grand to the table to get the deal closed. So the closing costs, the lender's points and stuff, 'cause they were kind of expensive. It was three points upfront. And so then we got the deal closed and then I got the handyman to agree to not get paid until I got the draw after the whole job was done because it was such a small job that he could do and I think he finished it in like 10 days.
So the advance was for the lending fees, but then they also, hard money gave you the draw for completing the work?
Yes. So init, so, so, so I got about 8 grand in advances to close the deal and then I used my credit card to buy the materials and then once the work was done, the hard money lender released the money for the rehab and then I was able to use that to pay the handyman and to pay back off the credit card from the, you know, materials that I purchased.
Oh, fantastic. That makes sense. And so then, uh, you got more permanent financing, or did you just flip it and sell it?
Uh, just flipped it, sold it. Now, we, we listed it on January 1st of 2020 and we all know what transpired right after that. So.
Oh, yeah.
We had co.
Exactly. We, we had two contracts fall through due to COVID-related issues, people losing their jobs or whatever.
Got it under contract a third time and almost lost that one too. But we were able to salvage it. So even though the rehab was only 10 days and the total time between when we closed on it and when we relisted it for sale was only 14 days, we still ended up holding it for a total of 5 and a half months.
Just fairly long.
Yeah. Or is it fairly short? I, I'll say this, it usually takes, uh, uh, six months to season and get a refinance. Um, and that's typically what I do when I'm doing like my buy and hold, you know, BRRRR strategy deals. So, um, I usually am done before the six-month period, I guess.
Right?
But you've heard, I've heard stories of people not selling it for a year, right? So that would be bad.
Yep.
That would be bad.
So, what's your average flip now is kind of what I'm asking. Is it long or short?
There's a whole range. I mean, we, some of properties that we buy are pretty much turnkey and don't need anything. In, in those instances, we just get it cleaned and immediately relist it. But, right.
Others that are, you know, pretty good-sized rehabs, I would say we're, we're typically getting those done in six to eight weeks now.
Wow.
So, most stuff we're able to get from close to close in under six months.
So you have crews ready to go immediately upon you close the property, you get a crew in there, six to eight weeks later you're putting the property back on the market and away you go.
For the most part. And it's not, obviously, it's not always been that way. It's taken, you know, six years to get to this point, but, you know, there have been times in the past where we had to sit on a property for four and a half months before we even started work on it. But, you know, these days, uh, we've got more people, we've got good, good folks and we manage, like we can kind of increase and decrease the throttle on how much work is needed to be done by choosing how many of the deals to wholesale instead of actually,
Rehab. So that's helpful as well. So these days we,
Criteria.
On, on what, what do you, how do you determine wholesale versus rehab and wholesale, essentially you're buying it and then turning around and putting it back on the market? But how do you determine whether that's going to be a, whether you're going to do a flip with it or you're going to wholesale it?
Yeah. No. So, first, let me define what I mean when I say wholesale is that we're not doing any repairs or updates to the property. All we're doing is cleaning the junk out, maybe trimming down the bushes, landscaping, and maybe having it cleaned, and that's it. If we're doing, if we're doing even five grand worth of rehab work to it, then I consider that a flip, not a wholesale. Some, not everybody sees it that way, but that's just kind of how I look at it. But to answer your question, um, truthfully, a lot of the times I don't really know when I am under contract to purchase the property. I don't really know with certainty what the extra strategy will be. It kind of depends on, like I said, what the, the deal flow is looking like and it depends a little bit on the property. Like, you know, we have some that, you know, we get a great deal on a little brick ranch that's in city limits in a good area that is totally financable the way that it is, but it's just really, really ugly and outdated. Well, sometimes I may have a friend or a friend of a friend that I know is looking for that exact type of opportunity to buy as their primary residence that they can build sweat equity into over time. And in those instances, I, I'll go ahead and if there's something like a couple broken windows or something that would stop it from being financable, we'll go ahead and do those little fixes. Uh, but then we'll just turn around and, um, you know, sell it straight to that p, that buyer with no agents on either side and, uh, and sometimes when we do it that way, we're making just as much, if not more profit than if we would have done a full rehab and sold it. But we have also wholesaled some real turds that were not financable and we've done pretty well with a lot of those too. So, it, it kind of depends. But for that reason, since I, since I don't always know going into it which route we're going to go, I don't go, I, I don't use slimmer margins for potential wholesale deals. You know, I, I like to keep it safe and use the same kind of margins that we look for for flips just to keep it safe.
Refresh my mind again. What's the difference between wholesaling and, uh, doing a novation?
Yeah. So a novation, you never own the property. You're just.
Oh, got it. So wholesale, you actually do take it all the way down. You buy it.
Yep.
Yeah.
I don't know where the word came from, but it's wholesale is like a cross between wholesale and retail. And.
Right.
So all, all wholesale is is you're closing on the property and then you're listing it on the market. So that's the difference. Novation, you never own it. Wholesale, you do own it.
So, do you put your own money down to, to buy it cash for a wholesale?
Uh, no. I use all private lenders or hard money.
And then, man, 60 deals a year. How do you even, uh, organize the contractors for that many deals? Because contractors make you pull your hair out sometimes on one deal, right? They just get a higher paying job in the middle of your project. So, all of a sudden, you stop hearing from them and you're like, "Hey, what's going on?" Right. So, how do you manage that on such a big scale?
Yeah. No, that's definitely one of the most challenging pieces initially and, and part of the reason is it doesn't really matter where you hear about contractors or if you, they were referred by somebody or whatever. Finding good contractors, there's really not another way to do it other than trial and error. You pretty much just have to try them out and see how they do. See if you work well together. See if they're gonna jack up their price on you on the second job. Those kinds of things. And so it definitely can be an ever-changing revolving door. But, you know, here recently, we, we've had a good long stretch here with some really good crews that really value the consistent work. And a couple years ago, uh, I actually hired my dad as my full-time project manager. And so he's the one that deals with the relationships with the contractors and makes sure that things go, are going on. But, but we don't work with individual subs, individual trade people. The only thing that we will really sub out is the HVAC and, you know, 'cause we need that to be fully permitted and all that stuff. But just about everything else, we let that main unlicensed contractor handle it and, and get it done. So, we don't have to, the project manager doesn't have to sit there and schedule out every single individual trade for a project. He just talks about the whole job for it. Um, but it works well. I mean, these days, I don't even see the properties that we flip ever. You know, my, my lead manager sets the appointment, my acquisitions manager goes to the appointment, gets the contract, I line up the private money for it, and we get it closed. And then my project manager goes out, changes the locks, meets the contractor, you know, agrees to a price for the job, and then when it's done and cleaned and ready to be listed, he lets me know and I let the listing agent know that we're going to use. And it, it's been working out really well.
Nice.
Dude. It sounds like it. And you've, uh, you're so young. I feel like you, you've accomplished, uh, what everybody's dream is. And so I'm very, very excited for you and excited to get to talk with you about it today. Uh, I, I mean, I assume between the first and this, the, the deal you're on now, you, uh, had some deals where you did all those processes, right?
Oh, for sure.
Yes. And shout out Dad for handling the pro, the actual contractors, but, um, what was the next position? You know, what, what was the first position that you, I guess, hired, right, to get, uh, taken off your plate?
Yeah. So, it was really right at the same time that a, a couple years ago or so that I hired the project manager and acquisitions manager. And the acquisitions manager, he was handling all of the lead management, you know, in addition to acquisitions. And then probably, I don't know, 6 months ago, I hired a, a VA executive assistant. That, that didn't work out. So I'm currently, I'm rehiring for an in-person executive assistant right now as we speak. And probably about three month, three or four months ago, I hired a full-time lead manager in house. And that, he's been crushing it. That's been really helping our, you know, deal flow by having, having a full-time person that's dedicated to that role that they're able to have really quick speed to lead and really good, consistent, thorough follow-up. That's really helping us land some extra deals here. So, I'm super excited to see what 2026 looks like because, you know, I think we, we're going to be growing a decent amount.
Nice.
Well, yeah, congratulations. Do you have the same, uh, concept for your lead manager as you do contractors? You basically said that you don't know if they're good or not unless you just try them out, right? So, have you applied that with other positions as well, or do you have a different process for those?
I guess it depends on the position. So, for the actual, uh, the executive assistant role that I'm hiring for right now, I'm, I'm going through a recruiting company that specializes in, you know, helping you find good assistants. So, that's a very thorough process. A lot of, you know, preemptive screening and stuff. But the other ones, uh, it's been a little bit subjective. The, the acquisitions manager position. I really wasn't trying to hire anybody at that point, but, uh, a friend of mine that had just quit his job after a year of selling cars at a local dealership who already had a little bit of prior experience with some real estate stuff. He came to me asking me how he could like get involved with real estate and stuff. And I was like, "Well, he's like, "Have you ever considered like being an acquisitions guy?" And he was like, "No, but that, that sounds interesting. I think I'd be good at it." And I was like, I was like, "Okay, well, let's just try it. Like, I don't, I don't know if it'll work. I can't pay you a base, you know, so it'll be commission only, but, you know, let's go with this commission structure." And, uh, I just sent him like eight of the leads that had come in within the last week that I wasn't able to get up with anybody. And I wasn't really expecting anything of it. I expected that to kind of die there. But he ended up getting a deal out of it. And I was like,
Dang. Okay. Well, it's like, let's do some more. Like, and so then he started handling the rest of it. And he's still, you know, this whole time been commission only. And the lead management role that was, that was a little bit different. I met that guy, uh, actually at a gun shop and he, he sold me. He was really, really good and super personable and he had a, like six years of experience selling cars before that and, you know, I knew we had very similar values and morals and beliefs and he was just a very, you know, happy, grateful person and he was great at sales and he also was the personality type that likes some routine and structure. You know, that you would want a lead manager to have, you know, as opposed to acquisitions managers are usually the opposite of that. And so in that case, I just kind of, I, he was, he got really interested in real estate after talking to me for a few months about it. And then at one point, I was just like, "Dude, why don't you just leave this place and come work for me?" And he's like, "I," He's like, "I would." And I was like, "Well, how much would you need?" And he's like, "Well, I'm only making this much a week here." And I was like, "Done. I'll pay you that as a base and then I'll give you, you know, a commission on every deal that we close that you, you know, were the lead manager on." And so,
How did you know that you weren't going to teach this guy everything and he was going to go start his own wholesaling company, or was that a concern for you?
You know, that's, that's always a risk. And I don't make anybody sign non-competes, which I honestly, I don't even know if non-competes are really enforceable in North Carolina anymore. But I, I don't know. I, I feel like this guy, I, I trust him and I feel like I, you know, I'm giving him enough to look forward to in the business and to grow with me and potentially even enjoy some of the, you know, profit share one day or maybe given like some phantom equity or something, you know, depending on how he does and what role he goes into in the future. You know, if he wanted to potentially move up into like a COO type role and kind of work me out of a job one day, I can see that being a real possibility. And I also don't think that, you know, sales guys that are true-blooded sales guys are typically not the kind of people that have the right characteristics to run a business well. And they often don't want to. They just want to say, "Hey, give me the opportunities, but don't, you know, cap my income," and they're comfortable with that. So, I don't, I could be wrong, but I don't, I don't see him being somebody that would really have that kind of drive to go and start his own thing like that.
Got it. Well, makes sense. Just curious because it's always a concern people have and, uh, ultimately at the end of the day, you need to have, you need to have people on your team and you, uh, pick somebody who's in a sales job, right? So that's how you knew, hey man, he's just really interested in sales and if you withhold information from him, then he's going to be operating inefficiently in your own business, right? So you can't withhold information because then they're not going to be able to do their job to the best way, right? So you've got to provide that training. And, uh, for me, I think you, you nailed it right on the head where just most people, uh, don't want to start their own business and if they do, they're typically pretty forthcoming about it from the beginning. Um, and then also, um, you know, you've got to train people with the best material you have. Otherwise, I mean, what, what are they going to do? If they stop learning and growing, that's when they'll just go leave, go do another job, right? So, as long as you keep training them and keep pouring into them and your business grows so that they can grow into it, like you said, maybe he could do an operations role. Um, that's, you know, I think what keeps, keeps people around.
Yeah, absolutely.
So, Jason, what is your, uh, next move? I mean, it seems like you're, you're operating it, but you're not in the business much. You're kind of, uh, built a lot of systems and put people in places to handle a lot of what needs to be done day-to-day. So what, what do you think your next move is?
Yeah. So this year has been mostly spent on hiring to make the business run more efficiently and also take some things off of my plate. And like I mentioned, I, that first executive assistant VA hire was a failure. But right now, the, the main thing is I'm trying to mostly work myself out of a job. And also this year I've intentionally not bought any other big properties because I wanted to, you know, really build up liquidity very heavily to just feel like I'm ultra safe because the more employees that you have and then the more deals you're doing, the more pressure, responsibility you feel to take care of those people that you know because you're helping feed their families and the more deals you do, the more volatility, the more risk there is and the more reserves that you need. So, right now,
When you're taking them down, right, especially when you're taking them down because you're, you're buying them.
Exactly. And so right now my goal is when we get this new assistant in that the, that she will be able to take off a few things off of my plate such as the transaction coordination part on our off-market purchases and some of the general, you know, bookkeeping and expense tracking. Little things like that that would help, you know, little admin stuff that would help free up some of my time. And then, you know, once we, once we're set for that, then pretty much mostly all I'll have to do is be the one to give that final yes or no on, you know, are we going to do this deal? And, um, also I'll, I'll probably at least for the foreseeable future maintain the relationships with the private lenders as well because that's kind of a sensitive, you know, topic that, you know, I probably want to m, be, be the face of for now.
Got it.
Got it. Well, as we kind of wrap up, um, do you want to share any really important lessons maybe from the past year? Uh, maybe that could really help somebody listening right now.
Yeah, I think the biggest thing, like I said, I have been building up liquidity this year. That would be the biggest lesson that I could give to somebody that's newer starting and they're wanting to grow, you know, don't grow too fast. Don't, don't worry about your door count or think that, oh, well, this is a, a good deal on this 20-unit complex and it's, it's going to be a great deal and it's going to work out well, but it's going to take $300,000 of my liquidity for the down payment and then leave me with close to nothing. You know, that puts yourself in, you know, some very risky situations when you're flipping this much because, you know, when you're doing this many flips, it takes nothing to see 300 grand go out the door in a week, you know, between rehab costs and holding costs and all that stuff. So that's what I would say, you know, build up a really, really healthy level of reserves, like at least six months of business expenses before you start trying to use your profits for down payments and such.
Yeah.
Yeah. No, that's good advice. Appreciate you sharing that. Um, and definitely in the past have had moments where I unnecessarily couldn't sleep well because, uh, nothing actually was wrong or nothing actually happened. But just feeling when things are tight, right, it does, it does, uh, change your peace of mind, I think, for most people. So, it's really great advice.
100%.
Well, Jason, I know you've got a beautiful website. It's, uh, capefigurecashoffer.com, right? For any, any deals people might have that they might want to submit to you or, uh, do you actually have a buyer list, uh, that they can get on at that website as well, or is that a different website?
Uh, neither, actually, because we don't wholesale, so we don't have a buyer list at all. Uh, but if anybody wants, if any wholesalers want to bring us deals, or if anybody is interested in being a private lender on our deals, uh, they can reach out to us there. Uh, or for private lenders, if they go directly to jvwithjv.com, it will take them to the investors tab of that website and they can submit a form to reach me there.
Wait, you own JV.com?
No, JVwithJV.com. Oh, JVwithJV.com.
And of course, that's your initials and joint venture. I love it. Well, Jason, man, thank you so much for hopping on today. It was a pleasure. Um, any, anywhere else that, uh, people you want to send people or anything you want to say before we sign off today?
Yeah, man. No, I appreciate you having me. If anybody wants to follow me on Facebook or Instagram to stay up to date on what we're doing, uh, feel free. Here. If, if you have any questions or anything I can ever help anybody with, uh, you know, don't hesitate to reach out. And thank you guys again for having me. It's been a blast.
We're there. Absolutely, man. Appreciate it. Talk to you later.
Thanks for listening to the Deal Machine Real Estate Investing podcast. Please leave us a review and follow along wherever you're listening to your podcast.
[Applause]