Confessions of a Bay Are House Flipper with Jake Knight

Summary

In this interview, Jake Knight discusses his experience as a house flipper in the San Francisco Bay area. He emphasizes the importance of finding good deals and running the numbers to ensure profitability. Jake also discusses how he finds sellers and raises capital for his projects using technology and networking. He talks about the role of real estate agents in his business and how they help with finding properties and selling them. Jake shares his strategies for pricing properties and the importance of underpricing to generate interest and bidding wars. He also discusses his worst flip, which involved issues with the construction process and hiring the wrong contractor. Jake emphasizes the importance of thorough contracts and proper project management. Finally, he shares his best flip, which was his first one, and the sense of accomplishment and fulfillment it brought him.

Transcription of the Interview

Sure. Well, I’m living the dream, so to speak. I am a house flipper, and it’s really the only thing I wanted to do. Getting out of high school, which was around about 20 years ago. And I took this long path and I originally, when I got out of high school, my mom and I, who we were both getting into real estate, or at least we wanted to, and we heard about this book, rich Dad, poor Dad, very well known real estate investing book. We reread it, we went to the seminars, we got the board game, but

Back race.

Yeah, sorry. That’s right. I was just young, not confident, didn’t know what I was doing. So I thought, let me get a job in the mortgage business, maybe then I’ll learn the fundamentals of it. So I did that, but as time went by, I still just didn’t really feel confident and know what I was doing. This was pre-internet mostly, so there weren’t a lot of resources out there. For some reason I couldn’t do it. I just kind of got into this career mode for a long time. I worked in lending for a long time, and it wasn’t until maybe two or three years ago that I kind of had that light bulb go off again. And since that day, my life has completely changed and I’m doing exactly what I always wanted to do. It just took me a really long time to do it. So now I’m here living the dream.

A light bulb went off. So describe that moment. The light bulb went off. Were you doing the laundry or you were putting a pot pie in the oven?

It was more like a dimmer switch When you slowly increase it, the light slowly went, maybe in the course of a couple weeks where we sold a house and we took the profit and put it in a cd and it was a really good rate. It was 1% and

Retire.

Wow. You’re counting the profit at the end of the year, like, oh, it’s not really going to make that much. But we started looking into what else we could do, and I found a website called biggerpockets.com, which is really the go-to investing place online. And the more I started researching, the more it just clicked. And I remember laying in bed with my wife at night and just talking your ear off. I had all this excitement. I was like, oh my God, we can do this now. This is going to work and here’s how it’s going to work. And this went on for, that was the light bulb that went off,

Right? Right. BiggerPockets, yes. I am also a BiggerPockets member. So where did you grow up? Where do you come from?

I’m Bay Area, born and raised. I grew up in the East Bay. Shout out to Contra Costa.

Where East? I’m East Bay too.

Okay. I’m Berkeley. Grew up in Pittsburgh. I went to high school, Pittsburgh Comp

Pittsburgh. Okay, alright.

I’ve lived in Fremont. I lived in Oakland for four to five years, so pretty much covered most of the East Bay.

Right. So what was your childhood like? Were you a skate punk or were you a studious guy or?

No, I was kind of like a, if you could describe a sea average in every way. So I grew up, my sister and I have one sister. Our summers were pretty idyllic, eighties and nineties kids where we swam at the public pool. We played sports in the street, played Nintendo. I had a job. My stepdad was a contractor. So from the early age of 11 or 12, I was out there every summer doing grunt work, tearing apart a roof or painting or at

11 or 12,

Yeah, I was doing the dirty stuff. Wow.

Is that legal? Did

Pay workers’ comp. No, making five bucks an hour, which was probably minimum wage back then. But every summer I progressed and got to do more and more stuff. So

Wow, that was

A good experience.

That’s cool. That sounds like a great experience. So you’ve lived your whole entire life in your bay area? In the Bay area

Minus six or seven months. During the crash, I was working in mortgage, so I got laid off three times in one year and I said I have to do something else. So I was in my early twenties and I said, I’m just going to pick up and move to New York. So I did that basically.

Oh wow. New York City, the big apple.

Yep.

You were in Manhattan. What were you doing in Manhattan? We moved

To Manhattan.

Bad place to go with no money.

I got laid off and I just booked a trip with my buddy and I said, let’s go out there. I’m going to look for a job. I got a job, a sales job through Craigslist, and we went for a weekend trip. I lined up three interviews on a Monday. One of ’em hired me on the spot and was like, I need you here in two weeks. So I went back home to California, put everything in a storage, made all the arrangements, broke the news to my family, got another ticket, and found another place to live through Craigslist again and just went out there. The job was terrible. I ended up quitting.

What was the job? Were you like a bus for a nightclub or?

Well, in New York, it’s mostly apartments, so they have a lot of apartment brokers. So I worked for a brokerage making about 150 calls a day trying to connect people into rentals. But it was just a boiler room and I just didn’t enjoy it. And the sales manager was really bad, so I thought, well, I’m here. I can find another job. Unfortunately, it was the beginning of the crash and Citibank had just laid off like 12,000 people. So

Bear Sterns, Morgan Stanley, all these guys are going under building.

So the market got flooded with people, with job candidates, and I just got pushed to the bottom. But the good news is I spent half of my day sightseeing for about six or seven months. So I really enjoyed it, but I just didn’t really accomplish much. So I came back.

I love New York. You have a degree. Are you a lettered man?

Well, part of my story is that during the crash or after the crash, I went back to get my degree, and as I was about to finish maybe four classes short is when I discovered real estate investing and we had a baby. So something had to give, and it was my degree, unfortunately, but I’m so close that it would be easy to finish.

I have no degree as well. Confession. A lot of people meet me think that, oh, you must have a degree. No, no, I’m a college dropout. You

Look like you have a degree.

Yeah, I looked like that. Right. But no, I do not. I think I have almost enough credits to complete my sophomore year.

Nice.

So that’s where we’re at there. Okay. So let me see here. So you were a mortgage broker for how long were you a mortgage broker for?

I only did the sales part of it for a little while, but I worked in the mortgage business as a processor. I was in sales for a wholesale lender. I did underwriting from maybe 2002 to 2008.

Oh, wow. That’s a long time.

And then during the crash, I moved to New York, then I came back and did technology sales. I learned that I ate that, and then I was like, you know what? I want to go back into lending what I really like to do, but I didn’t want to get laid off. Again, the compromise was going to work in commercial lending. I did that for about six years until last year. But that was interesting because it taught me a lot about risk analysis, how to evaluate commercial property, which is a lot different than residential. I got a lot of good skills that help translate to what I do now.

Right, okay. Commercial lending. So working for Comerica or who’s a commercial

Lender? I worked for Bank of the West for Bank of five years.

My friend was working for Bank of the West. He just quit and moved to North Carolina, of course.

Okay.

Unfortunately. So I guess we just talked about what got you into house flipping, but how long exactly have you been doing the house flipping for

About two and a half years now. And that start date is when that dimmer switch went on, and then it took me probably six to eight months to actually find and get my first deal.

Right. So I think that’s where a lot of people get into trouble is that they rush into the wrong deal. So tell me what makes a house a good candidate for flipping?

Number one is just making sure that the numbers work. I think flipping can be very risky and dangerous if you’re not doing the math and underwriting it correctly. But what makes a house a good candidate is if there’s some value that we can add. Usually that’s through the construction process, improving a home. It could also be if we’re adding value to a seller, such as solving one of their problems, maybe a financial problem or just a convenience problem or goal for them. But most times it’s coupled with doing either light improvements, just updating an old home or doing more severe or major upgrades. So we just did one where the roof was caving in the kitchen, there was a leak upstairs and the deck was falling apart. I mean, there’s just so many different things that can be wrong with the house if it’s neglected over years. So usually that’s the first thing, is that a fixer upper two, are we solving a problem? Three, do the numbers work and not in that order. They’re all important.

That’s interesting you say adding the value for the seller of the property, because I think a lot of people don’t really consider that. I think they think, oh, it’s an opportunistic flipper, but a lot of times these sellers are in dire straits. Right. I mean, it’s like a lot of times they’re looking at bankruptcy, foreclosure, I mean eviction. I mean, all kinds of bad things are lying for them. And you oftentimes present the knight and the white horse almost for a lot of these people because the alternative to selling it quickly and relatively inexpensively to you is much better than their other choices.

Those conditions don’t always need to be present and present. In fact, a lot of times they aren’t actually. But those are a lot of situations where we can definitely help.

Definitely help. Right, exactly. You talked about running the numbers, but how can you really know what the numbers are? Because you don’t get into these houses completely. You don’t take the drywall off to see the framing or the state, the wires or whatever, you know what I mean? How do you know the numbers going into a flip?

It takes practice for one, doing more projects, you encounter different types of repairs that you’re going to do. But for each project we’re doing now, it’s usually there’s always some new variable that we haven’t done before, a certain type of deck or drive, just some kind of random thing that is new to or unique to every project. But so one, it comes with experience. Two, there’s always going to be some element of unknown a lot of times what’s behind the drywall, termites, different things like that, dry rot. So a lot of it is, when I was getting started, that was a big thing is, well, how do I know what to offer because I don’t know how to estimate the construction costs. So at first it was weird just creating a guesstimate based on what our peers were doing and saying,

Well, plus you have some construction background. Right. That must be very helpful.

It’s helpful in the sense that I know how to fix things or what goes where or how things are fixed, but the cost estimation isn’t applicable because I wasn’t doing that when I was 11, unfortunately. So it starts out with researching what I read some books about construction cost and BiggerPockets was a good resource, but then it was like, okay, I did my first deal. What repairs did we do? I would try to reverse engineer and see the patterns and then look at the next deal and say, well, this is what’s needed on this house. So plus these other unknowns and just kind of cushion for that to make sure that if there are any surprises. Okay.

Right. Yeah. So I guess you need to have a certain margin just built into every job, right? Absolutely. Because is the overhead contingency and a disaster. And I think that’s what a lot of maybe amateur flippers or first time flippers and even sellers of these properties don’t understand is that you need to have that, right?

Yeah. Imperative to have that.

It is imperative to have that. And if you don’t, and I think a lot of flippers get into trouble when they don’t have that,

Right?

They just think, well, I’m going to make $50,000 on this deal right here, so that’s fine. You could easily have that $50,000 vanish and then some,

Right. There may be a situation I tell you about later in this podcast where that happened to us.

We’ll see. I would love to hear about that. But this is the most important thing that I just dying to know, and that is who are selling these houses to you? Where do you find these sellers who are willing to give that margin up to you?

Well, I think to me that’s two questions. One is where do we find them? The first one, we find ’em through a lot of different means. So a lot of it’s business relationships. So for example, working with real estate agents who are out there working really hard to get listings, and sometimes they just know it’s a better fit for an investor to come in and buy the house. We also network with attorneys, so like probate attorneys, divorce lawyers, it could be even contractors or landscape contractors who are connecting with homeowners who have houses that need repairs. So there’s a lot of different lead sources that fit into those categories, the business network. But we also do some of our own direct marketing where we’re using direct mail and other telecommunication software to reach people based on a lot of data that we’re gathering, reverse engineering, who our clients are, figuring out how we can get in touch with these people as they’re just thinking about selling, getting ahead of ’em to have that conversation.

So I found you through your investor carrot website.

That’s right.

So do a lot of people find you just from your search engine optimization and stuff like that? Yep.

That’s another one too that I forgot to mention is that I spent a lot of time, I have over the last couple of years working on the website, not so much to make it look great. That’s actually not the number one goal. The number one goal is to get ranked for keywords that people are searching for. So we’re doing okay right now. I’ve kind of neglected it a little bit recently. I’ve been busier, but I’m going to do a new website to attract different home sellers. And so you’re

Going to do a new website?

Yeah. I want to get off of the platform that you mentioned, investor care. I want to have my own site that’s just like a template that

You pay hundred bucks a month for that. I had an investor care at trial for a while. I mean, it looks like a good site to me. Right? It’s easy. It’s easy. Right, exactly. So you basically have just, there is no one, there’s not a main line of these great listings that just shoot ’em into your pocket. You really have to just scrape

And

Network and find it however you can and just let people know that’s what you do. And are there networking groups in the Bay Area that you can go to, or, I know that there are, I guess meetups, like a real estate investor meetups. You go to any of those and meet? I

Do. I do a lot of networking. That was hard for me at first because a shy and introverted person, unless I know you, or unless we’re doing a podcast, then I’m more vocal. But I do a lot of networking. But usually it’s more for the business side of it. It’s not to generate new

Because they’re not there.

So I’ll network with other business professionals, like I mentioned earlier, meet some other real estate agents, attorneys, different things like that. So one of the biggest unknown or challenge, the biggest thing that other people don’t know about flipping. And one of the biggest challenges for us is finding deals. We’re in a hot seller’s market right now in the Bay area, and deals just don’t fall off trees. I mean, that’s where I spend a lot of my time is improving our processes and just generating a higher quantity of leads. Because it’s a numbers game. The more leads you have, the more people you’re talking to, the higher the chances you’re going to find a deal. And that’s really with any type of sales organization, it’s the same concept. So

It’s a numbers game.

It’s a numbers game.

I know it. Lemme just ask you this. What would you say is, let’s say you get a hundred leads, how many of those hundred leads that you get is going to turn into a house? You buy

Maybe one or two.

Maybe one or two, right? Yeah, it’s really low. So you have to kiss a lot of frogs right

Before you find that one. Okay. So now one thing that really is blowing me away, because I’ve been working with investors like you for just the last couple of years, really, and it amazes me that there are people who are, because I’m a real estate agent, and I go to these people and I say, Hey, let’s just sell your house on the market, and I’ll get you like a hundred thousand more maybe than an investor will. And then they say, no, that’s okay. I’ll, I’ll just sell it to your guy for a hundred thousand dollars less. What kind of people are doing this? A lot of times I find that they’re elderly, but are there any other kind of profile that people can meet that would say, Hey, this is a person who is likely to transact business in a way that I need to in order to make it work for me?

A lot of it’s situational, and you’d be surprised that a lot of times I think it’s kind of default or natural to think, well, we always want the highest price for what we’re selling in general. But how many times I’ve sold something like on Craigslist or anywhere else where I thought, you know what? I don’t want to deal with the time involved in marketing or improving this thing that I’m selling to get the highest price when I decide I want to get rid of it, I want to get rid of it. And I think a lot of the times when we’re working with people, it’s not that we’re out there low balling or people are just giving their house away for free. It’s not like that. But not everybody sees the highest price as the number one goal because there’s a lot of other factors that go into selling a home could be are they looking for convenience or flexibility?

Because we can buy a house very quickly, or we can be very flexible in letting somebody stay back in the home after we buy it because we’re not moving in. So we’re able to create and customize our offers so that if somebody approaches me and says, I don’t really want to put my house on the market because I’ve lived here for 40 years and it’s a trash house, I know it, or it’s just outdated. I don’t want to pay two commissions to sell it because I know you can buy it from me, but I need a little time to stay back and I don’t want to do any repairs and deal with that. Well, that’s a great fit because we can accommodate all of those needs. But I also look at it like we’re not really buying at a big discount. We’re buying at what that house is worth and it’s current condition. There’s usually some kind of deferred maintenance. So if the house is fixed up down the street sells for a million, and we buy this house for eight or 900,000, but it needs a lot of work, well, that’s probably just what it’s worth. So that’s how I look at it. It’s not like we’re just coming in there and getting screaming prices for no reason. It’s because we’re offering value and we’re buying a property that’s not in great shape.

And that’s very important to mention because I think that a lot of these houses, if you were to just literally put it on the real estate market doing nothing to it, it would sell for 50 or a hundred thousand dollars less, even though it only needs a $10,000 trash out or whatever. So really it is just that you actually aren’t getting it for that much cheaper than it would be if you didn’t do anything at all to it. And that’s another interesting thing that gets me thinking is that I think because a realtor, a lot of people go to a realtor specifically because they want to get the best price for their property. That’s kind of what we do. That’s our mission in life, is to get you the most you can for your house. And I think that a lot of people, not that many people, but more people than I normally come across, don’t really, that’s not a hot button issue for them. They have other things. A lot of people, they’re embarrassed to put their house on the property. They don’t want anybody coming in to see that they’re a hoarder or they let that thing go to that extent. They would rather just do it quietly, have some time to move out on their own terms and then just be gone. And there are people like that, but you have to find them. Right.

Exactly. They don’t always advertise, Hey, I’m just ready to go. Somebody buy my house in two weeks. But once we do connect with them, and I think they see the value that most times when we’re talking to people, they’re also talking to a realtor.

Oh, really?

Yeah. I mean most times they’re weighing all their options, really. They’re talking to REALTORS too.

I would say maybe half the time or more really. I mean, yeah, they’re weighing their options. They’re seeing what works best for them, and they’re making the decision based on what we bring to the table and what a realtor or the market bring to the table.

I hate people like that. I hate people when I talk to ’em out selling their house aside not to sell their house with me. That really gets my get or CR or whatever. You mentioned that a lot of people are talking to realtors, but I imagine that a lot of ’em are also talking to other flippers, other buyers. Is there a lot of competition in the flipping? Do you actually go up to houses and there’s a line of flippers out the door waiting? If there is, I’m leaving. You take a number.

I don’t like competition. I don’t call myself just a salesperson, but I’m in sales in that regard. Nobody likes competition. So if I’m going to a house and there’s other flippers there, or I can’t always prevent a seller from weighing their options. So it is what it is, but I work hard to make sure that I’m trying to connect with people and be the only one there if they come through my website. Sometimes those people are weighing their options and talking to a couple other people who have websites ranked like ours does. But I think our biggest competition is probably just working if they’re working with a real estate agent.

Because that’s your biggest competition is realtors? I

Would say. So it’s not other flippers. There’s a lot of other flippers out there, but some of us use different marketing strategies. We’re connecting with people at different times in different ways. And I would say that definitely the market and real estate agents is our biggest competition. And sometimes it’s a situation where we we’re the first ones in, we’re talking to the homeowner, explaining what we can do and how we can help ’em. And then the realtor comes in and just completely trashes us without knowing who we are, because I think it’s easy to pick on us as scammers or anything like that, but I don’t consider myself to fit in that category. There’s bad apples in any industry.

There’s bad apples in the realtor industry as well. Doctors, lawyers,

Mechanics, everybody who solves problems for profit.

Supreme Court nominees. I mean everyone,

There’s bad apples everywhere. But I think it’s easy to say, well, I’m not trying to pick on real estate agents. I’m just answering the question and thinking about the competition factor is that it’s easy for a realtor to go in and say, well, I’m a licensed professional and you don’t know this person. They could be a scammer and this and that. So that’s a tough uphill battle for us, but we’re able to overcome it because we’re very transparent about who we are and what we do. And you can find testimonials from us online. So I think if we’re able to make our case, then we don’t usually have too many problems.

I really like your website because it really shows you as being a nice person slash family man. And I think so much of being a realtor, in order to get someone to list with you, they have to like you and they don’t like you. They’re most of the time they’re not going to want to deal with you. And I imagine it’s the same thing in your business. I think that they’re probably the sleazy, hard, bitten flippers probably don’t get that many deals, I would guess. Yeah,

We’re in the people business and not to help my competition, but they’re losing out because they’re kind of hiding in the shadows and not being transparent. I don’t know for whatever reasons they have, but I feel like we’re going to be more successful, and I think we’ve been successful because we are transparent and build relationships with people. We’re not worried about what we’re doing or who we are.

Where do you get the money to do these flips, right?

Well, it started with a little bit of seed money, but it didn’t really need to start with that. Going to BiggerPockets and listening to all the podcasts that I did and reading all the books really taught me that there is ways to buy real estate with no money down, and a lot of it is raising capital. So first, for our first few flips, we partnered with more senior investors and that helped us bring in some capital. And today what we do is we use a little bit of our own money that we made, but more so we bring in other people. They’re just regular people who have what my friend calls lazy money. Sometimes it’s money they have in a self-directed ira, and we’re able to offer them good returns, much better than what they’re getting on the market or in stocks. And they’re getting some of the best collateral Bay Area real estate. They get, I mean, can’t really, I’m worried about s e C rules of talking about investment opportunities to not accredited investors. But just to answer your question, yeah, we’re working with a lot of private individuals who are bringing in capital to the deals, and it’s really no different conceptually than what big businesses do when they sell stocks to raise money or issue bonds. They’re bringing in other people’s money to fund their business, and that’s what we do.

That is very interesting to me because I see that all the time everywhere, buy real estate, no money down, use other people’s money. O P M, it’s even own initials for it. So where do you find these people? You find ’em on BiggerPockets or do you find ’em in local real estate investment clubs, or how do you find these people with lazy money lying around?

I need to find more of ’em? No, through relationships. It all starts usually with friends or family. And then there’s been just being out there networking a lot. I’ve met a few other people who the intention of our connection wasn’t to raise money or offer an investment opportunity. It was something in the peripheral that ended up leading to them letting me know, Hey, we’re actually looking to invest too. And then the conversation goes from there. I have probably three or four investors that have worked with me before that. That’s how I met ’em was just some other reason that we met, had nothing to do with investing, and it happened that way.

And so I don’t know how this works. These investors do, because you buy the property, are they lien holders on their property? Is that how that works?

Yeah, so they can either, if they fund the whole purchase or rehab, there’s a lot of different permutations of how to structure a deal, how much they want to invest. If it’s like 50,000, that’s going to look different than if they were bringing in a million dollars to a house.

I Mean, houses are so expensive out here that it’s usually some what we call a capital stack. There’s usually a few different things involved. So sometimes I’ve had investors just fund the rehab, which may be a hundred, 200,000, and they earn usually a double digit interest rate on their money. I’ve actually done it where they become equity partners, so they earn a certain percent of the sale of the the profit. So that’s also dependent on what they’re looking for. I have my own pros and cons on which one I prefer depending on the situation, but usually they’ve walked away very happy. And I think some of the testimonials I even have online are from people who have lent money to us and invested and they keep coming back, making good money.

Right. So you said the interest rate, but the interest rate is such a short term. I mean, is it more points that there’s

Points involved too?

Yeah. So are they getting 10 points? Is 10 points would be 10% of their loan? I mean, I don’t really want you getting specific, but is double digit points too, or maybe not.

It’s not double digit points, but I mean because the loan amounts are usually larger, the points, it makes it very profitable for them. So if you annualize their return, usually the projects are three to six months. So what we do is we talk about what their total cash on cash return is. They put in X amount, they got this back,

But also what if that money were with us the whole year? What would that look like? And a lot of times it’s kind of eyeopening like, wow, that’s a lot of money. We want to keep doing this with you. And I make sure that they’re protected too. I make sure the investments are safe. I mean, every investment has risk, but what I mean is we’re trying to buy these properties at a good percentage of their fixed up value at a low percentage so that there’s a lot of cushion in case something goes wrong. But we’re also trying to fix them up and sell ’em as soon as possible. So we’re still working within the same market conditions that are predictable.

Right. Yeah, that’s very important. You don’t want the market to turn on you. And that’s why I always tell people who are thinking about flipping, Hey, you have to buy low and plan to get out quick. If you think it’s going to be year long projects, man, that better be a cheap property that you’re buying if it’s going to take that long.

Or you’re adding a lot of value that, for example, taking a house on the peninsula that’s a two one, and you’re making it a four two and adding a thousand or two square feet, you’re going to take it from being worth 800,000 to 1.6 million because of that value add that you’re doing. Even that can provide a lot of cushion. It just takes longer. So everything is well thought out upfront with the investor to know what’s their time horizon, what’s their risk appetite? Not everybody’s a good fit for each project. So it all depends on what they’re looking for and which projects we have at the moment.

But a little, it makes me wonder, because a lot of times you close these deals fast, you close ’em in seven days, 10 days, two weeks. So you may not know what exactly who you’re going to get the money from necessarily when you go into contract. Is that right? So you have to make a bunch of calls real quick. Hey, I got this.

That’s a good point. We do, I’d say for a lot of ’em, maybe half of ’em, actually not that many percent wise, we close quickly within a couple of weeks, but because we have that ability too, so that’s one of our value propositions is that we can close quickly. But it turns out a lot of sellers don’t actually need a quick close. So that gives me more time to really make sure I have the best fit for an investor. But I do have a few people that, there’s usually a few deals going on where I have these people are tied up, so I know I have another few other people that are ready to go, not at a moment’s notice, but a week they need time to evaluate it. I need time to present it. But yeah, there’s usually a few people on deck ready to go. Right.

Okay. And do they do their own appraisals or due diligence or do they just pick your word for it or

Probably both. No, I mean, I definitely want to make sure that I’m being transparent and tell you the pros and cons of the property and the deal. So I usually compose a very long email that covers the deal, how I got it, what the circumstances are, what the comps are, here are all the photos, here are the repairs, we’re going to do the estimate. And probably more than just that, but I present that we have a conversations, I want them to do any other research they can, because whether it’s they’re not interested or whether they want to move forward, I want to make sure that they’re comfortable moving forward. So I think over time we’ve gotten better at understanding where people’s concerns are, what they’re looking for in terms of each individual investor, what kind of involvement they want to have. So there’s a lock that goes into it, but I try to, as soon as I know or have some kind of indication that it’s going to turn into a deal, I start putting that presentation together because I know I want to have that conversation.

So it’s like you make a mini prospectus essentially. Yeah,

Yeah. I’m not running it through an attorney or anything like that, a commercial syndication,

But I try to make it formal. And

Then you shop the deal around essentially to your pool of investors, and is that which ones probably would be best for any particular

Job?

So it’s not like you’re going to 10 people, you’re probably just, I don’t know, a couple of few investors I would imagine. Well, that’s very interesting. So I guess we all need to have friends with big pockets, I guess. So what kind of technology or software or apps or whatever are you using to manage all this? Because each one’s like a construction project and you do want to make sure it’s all done quickly, but then there’s a lot of dependencies. This has to happen first before that could happen. So how do you manage all that? I mean, basically you’re not the general contractor, but you’re kind of a general contractor.

Yeah, there’s a lot of technology we use. I mean, I have a long lists of tools that we have, but a lot of it is actually more for the marketing side of it. In terms of the construction side, I don’t really have, I use a couple of basic

Microsoft projects, like a Gantt chart or anything.

It’s like Trello is one. I’ve tried one called Basecamp Asana is another project management tool. I’m much more of a low tech guy. So usually if I get a call and get a lead, I’m writing on a notepad and then I drag myself to the computer to put it into my C R M. In terms of the construction process, I try to make sure that we’re working with the right construction professionals. Not all of ’em are so business savvy. In fact, I try to find some middle ground because the ones who are much more savvy are usually unavailable or too expensive for what we’re looking to do. So what I’ve done in that regard managing projects is I’m going to bring on a project manager who has a ton of experience in terms of running construction projects like this for flippers or builders. And that will help me out a lot because I’m not the most organized person, and I’ve had some issues with managing the projects because I’m not super on top of every little detail and understanding in a very fluid way. All these little pieces that need to go together, I want the general contractor to handle that. And I want my project manager to make sure the general contractor

Are, you have a project manager,

He’s going to start on our next flip. Yeah.

Okay.

So this summer we were really busy. At one point we were up to I think five projects, and it was just me. My wife works with me too, but she also has a full-time job,

And plus you have kids

And we have kids, so my hands are full. I said, okay, well, what’s the best thing that I can outsource? Or, not the best thing, but what’s the thing that I really need to outsource that maybe I’m not great at? And that’s the project management.

So is he like a salaried employee kind of thing, or is he,

He’ll be hourly, but I really like his resume. We’ve met and talked a few times.

So he’s like a consultant essentially, right?

Basically, yeah. I wasn’t ready to bring on somebody. If we had maybe five to 10 projects consistently, it would probably make sense to bring ’em on the payroll. But it’s a great way, the hourly setup is a great way for me to test him and make sure we’re a good fit without being too committed in case he doesn’t work out.

And he came to you through your personal network or any BiggerPockets or

I was searching. I put a job ad out online. Oh, cool. So he came through there.

Oh, right. Very cool. Alright, awesome. So now how do you figure out how to price these properties? What’s your pricing formula?

When I resell them?

Yeah, when you resell them.

I look at comps. I’m not an agent actually, so I don’t have access to the m l s, so I rely on Redfin, Zillow, those other free tools, some other ones. And then if I do have questions, I’m not really sure about what I’m seeing, I’ll definitely call a real estate agent. I have a pretty good network of real estate professionals that I can always tap into in different sub-markets and get their opinion on what makes sense. So always, if it’s a full renovation, we did, and our main goal is to max out the price. Usually what I do, which is what a lot of people do in the Bay Area, is underprice. It maybe 10 to 15% of what we’re expecting to sell it for. Creates a lot of traffic, a lot of interest, and then we just kind of let the market do its thing.

So it sounds like you try to foment bidding wars on your listings on the house you sale. Correct. So do you always get a bidding war? I mean, is this routinely, do you always sell over asking price or,

Yes, I think so far we’ve always sold over asking. But again, it’s You’re

Pricing it. You’re pricing. We’re pricing it under competitively with that intention.

That’s right. How

Many offers do you get on these properties normally? Do you get 10 or five or what’s the

It varies, but I think it’s starting to be fewer, and I think that a lot of people are noticing that the most recent, probably two, we’ve had maybe three or less offers on, whereas things that we were doing last year we’re getting probably five to 15, somewhere in that range. Oh, really?

Is that much quieter than it was a year ago.

Yeah. But it also could be just we’re selling in different areas, different times of year. There’s a lot of variables that go into that

Too. Right. Yeah. So what areas do you work in? What’s your area of operations?

We have done flips from in the Bay Area, so I have two strategies. We have one, which is the Bay Area. So we’ve done projects as far south as the Santa Cruz mountains and all the way up to Vallejo and Marin County, and kind of everything between,

I saw you on your website in some trashed out place in Vallejo.

Yeah, I didn’t finish that video. And people mentioned that we were going to do an after.

Right. I seem to recall it was going to be an after.

Yeah, we never got around it.

It sold too fast. There wasn’t time. That’s right. So you worked from Vallejo to Santa Cruz, essentially. And how far east do you go? Do you go to Tracy or,

Yeah, we’ll do that. I forgot to mention the second part of it, which was we bought properties. I just did a flip in Santa Fe, New Mexico, and I never saw it. So that lead came through our website, and

So a guy in Santa Fe, New Mexico wanted sell his house. So he contact a California investor.

It was actually another real estate investor who had gotten the property under contract. They did what’s called assigning it. Wholesaling,

Which is maybe you whole tailed it. It’s

Not very well known, but it’s something that happens quite often in the investing world. So they found us, which is also strange because we’re not even in Santa Fe. They were in Phoenix, I think. But I ran the numbers. I looked at it, well, I don’t know the market, but I could do enough research. And usually my process then is to contact a real estate professional, which I did just coincidentally. I called somebody who had sold another condo in that complex, and she’s like, oh, that’s the listing I have too. So the wholesaler, the real estate agent, contacted the wholesaler to help her sell it. Then he contacted me. I ended up contacting the realtor. It was like this triangle.

I went back to the source. Hopefully nobody’s confused by that. But I went back to the source of the listing and asked some questions, felt comfortable about it. Basically the property needed paint, carpet and cleaning. So I understood that the price I could get it for and the price I could resell it for minus all my costs and rehab would be a profitable deal for me, especially based on the time I’d put into it, which was a few hours at my desk. So we bought it, and then we sold it a few weeks ago, and that’s probably the third one we did out of state. So what I’m going to do is continue growing the marketing from the Bay Area and beyond, because unless the property’s in really, really bad shape, there’s still a way for me to monetize those opportunities not being there. So if I can grow the business and do it in a more sustainable way with define processes, then I’m going to do it.

So did this real estate agent, because I guess you’re a little bit suspicious if you’re just buying it from a wholesaler. Did she go and FaceTime with you, take you through the unit to show you, or just it was a sight unseen you had, you didn’t ever

Yeah, just pictures.

Just pictures. Not even any live video walking through it. Huh?

Pictures in her word. She’s one of the top agents in Santa Fe, so I did some research on her. You

Yelp her

Check her credibility. Yeah, Yelp, Zillow’s where you want to verify your real estate agents mostly, I think. But yeah, so she seemed credible. When I talked to her. She told me all the warts and the good stuff about it. So usually that’s one of my filters is are they telling me the bad stuff too? And if they are, then I usually give ’em a little bit more credit

Credibility. So

I knew what was wrong with it, what needed to be done. She told me it’s not the greatest neighborhood in Santa Fe. It’s not like people are just flocking to be in this part of town and the HOAs transferring. So there were some issues with that. So I knew fairly well what to expect with it, and I decided it was worth the risk

And it panned out,

Panned out.

So do you do a lot of wholesaling yourself? Do you get these deals and then just sell ’em onto somebody else a lot of the time, or

Done it a couple times? In fact, that’s one of the, when you asked about how do we price our resales, and we’re not always just going to the market for the highest price factors. There’s two this year and one that’s going on right now where we’re selling ’em off market, meaning we’re not putting it on the m l s, we’re just using our network to sell these properties. And

You selling ’em before you fix ’em or after you fix ’em, that way

They’re not fixed up.

Right.

Yeah. So you

Wholesale ’em to your network basically.

Yeah, basically. So a lot of times we’ll still buy them, but then resell it right away. So it’s basically real estate arbitrage where

Right. And it’s interesting. I was seeing that on BiggerPockets, I think it was where, when was it? I don’t know. I read so much of this stuff, but the guy goes like, yeah, I, I’m an investor. He said, and I found the great secret source for finding these discounted properties. And I get ’em from wholesalers, which is, that’s cheating. You’re not supposed to find them that way. But I guess it happens a lot, right?

Yeah, it

Happens a lot.

So

How do you get on your wholesale deals list? Do you have a wholesale deals list too? Probably top secret

For the ones I

Sell. Yeah, right.

It’s a networking thing, really. And then there’s always people who are making themselves known as investors and flippers that they’re looking for opportunities. Because like I said, deals are hard to come by. So the investors who are out there looking for flips are trying to let everybody know that they’re there. So if you have a good deal, the saying is, if you have a good deal, you’ll find an outlet for it. You’ll find a buyer for it. So we did one in San Jose that I owned for maybe four to six months, decided not to rehab it, and we sold it to another investor who I found through an agent that I’m close to. She’s like, I have a buyer for it. Let’s make a deal. So I did a small showing for people it out to my network. I said, I’ll be there for three hours on a Wednesday. Come by if you’re interested.

Yeah, I saw that email, I believe.

Okay.

So on these wholesale deals, do you take title to them or do you literally just sell them on, you get them into contract and you sell them on before you even take title to them?

There’s pros and cons of doing both. I’ve only truly whole sailed, meaning just assign the contract once I’ve actually taken title, probably to two or three that we didn’t actually rehab and resell. So again, the concept is just buy low, sell low, and save the time and headache of rehabbing. Rehabbing is hard too. It’s not super easy. It looks fun, it’s glamorous on tv, but there’s times where you’re just like, I’ll take the, lemme see if I say this right, the fast nickel versus the slow dime. And so that’s why we do that. If we can add value to a seller, help them meet their needs, and we buy it, I can do whatever I want with it. I can sell it as is, or I can rehab it. And sometimes the goal is just to sell it. Maybe I have too many projects going on and I have this other opportunity fall in my lap. I’ll buy it, but then just let somebody else rehab it.

Do you have trouble with, when you write a purchase agreement, do you always write Sky Homes, L l C and or assign? Is that a standard thing you do and you write that in every purchase agreement or

Not every time? Sometimes if the opportunity comes from a real estate agent, a lot of ’em don’t like that. And I think we’re taught

Not to like that.

And I can understand why, because there are some wholesalers out there who have no intention of closing,

Right? You don’t know who you’re going to do, do business with ultimately.

Right? So if it comes from a real estate agent and I want the project, then I’ll buy it every time. I won’t even bother including the language to assign it. And even when I work directly with sellers, I let ’em know if I have partners or I may assign the contract, I’ll let ’em know if I even have consideration of doing that and why I would do that, just so that everything’s up on the table and no surprises later.

Right, right. Yeah. So it just might happen that in the course of your transaction with the seller that you find somebody and then you’re like, okay, well if you’ll pay me this much for it, then I’ll just sell it to you that way. So how often do you use a realtor to sell your property? I mean, are you doing it, it sounds like not that often. It sounds like maybe only half the time you’re using a realtor when you sell these properties.

No, more than half the time, because we rehab probably eight out of 10

Properties

That we get. So if we do rehab it most times or pretty much every time, I would use a real estate agent to list it and help me get the best price.

Okay. Alright. So how else do you use them besides selling the properties? I mean, you say they help you find the properties.

Yes.

They help you run comps on these properties. What else does the realtor do for you?

Those two things. How

Do they earn their keep? Because paid a lot of money. You have a money,

I pay a lot of money to real estate agents.

Do you get value for that money? I mean, yeah, absolutely. They do it for you.

Absolutely. Real estate agents are an integral part of what we do, which it seems weird sometimes. We’re competitors in a way, but I definitely rely a lot on agents from the beginning, especially if they’re bringing me an opportunity. I’ll let them represent me as a buyer if they want. I even have a bonus promotion where I pay additional commission for those great deals that are out there, as long as

We should add some harp music playing right now. That’s the angelic sound that we would like to hear. That’s right. Bonus pay. That’s right.

So I try to compensate them well so they can keep me in mind and make it profitable for them. And then I always ask them to re-list the property too, as another way to reward them for keeping me in mind and helping us grow our business.

Right. That’s very important. All your video tours who are listening to this, bear that in mind. Jake will take care of you on both ends. That’s

Right.

Alright, so tell me about the worst flip that you ever did.

The worst flip is going on right now.

Yay.

Really? I guess probably the worst things that can happen with the flip were just probably issues with the construction process. So I made a bad hire with the contractor. I didn’t do my due diligence, and the property is in Marin County, so I’m in San Jose. It’s a drive. I was only going there once a week. I didn’t do the proper vetting, and he took advantage of that. And so when I finally came around to terminating him and parting ways, and I immediately got a great crew in there, but the problem was a lot of the work that was being done looked okay, but it really wasn’t. And so we had to unwind a lot of it, and it feels like we’re unwinding half of the house. I don’t want to sell a house that’s not done properly, every little piece of it. So we’ve spent a lot of time fixing it up. And so basically I’m paying almost double for the labor and extra materials and time. Time is money in this business.

So

We’re selling in a different market than we projected. Our holding costs were double. And so instead of a project typically taking one to two months, maybe it’s taken four to five and we’re not done, we’re almost done. But just the whole process of dealing with the firing the guy, finding new people, managing it from afar, it’s been a challenge. So we’re over it.

Well, that’s interesting. So what are your contracts like with these contractors that you hire?

They’re getting better.

It’s basically, it’s like, I can fire you anytime I want to, or how does that work? I mean,

I made a rookie mistake and I had done it on other jobs, but I didn’t do it on this one for some reason, where I scheduled the compensation to be more on a time basis versus a completion basis.

And I don’t know why I did it that way. I look back and thinking, what was I thinking? It’s an obvious mistake. And if that one mistake hadn’t have happened, I probably could have avoided a lot of the trouble that we’re in. So just now, that’s part of the reason too with the project manager, is I need to improve a lot of the processes with the construction process and the hiring process. So the contracts now is much more thorough. It’s not just, let me sign your bid and let’s talk about timeframe and deadlines and who’s paying for what, which, that’s what it was early on, it was more basic. Let’s cover the main topics, but let’s not get into detail. Now we’re in much more detail.

Right, right. Okay. So what’s the best flip you ever did? On the other hand,

The best flip was the first one.

Your first one. That was the most special one.

Yeah, I mean, so much emotion and sentiment. Honestly, we just finished one that was our most profitable, but it was kind of like, okay, oh by the way, honey, this one was our best deal. And I was like, okay, cool. So it wasn’t that exciting, that first one. I spent so long trying to find that first deal, not to mention the fact that I wanted to flip so long ago. This was a dream come true for me to finally say, right,

It’s like your wedding night.

That’s right. It’s probably number two or three on my list. No, but it was just so rewarding to finally get that first project.

Right. Yeah, I can imagine. I can imagine. So how do you figure out what you’re going to do to these houses? What materials and appliances and fixtures and all that? How do you decide what to do with these houses? Right.

We don’t want to over improve or under improve for neighborhood. So if you’re selling into a neighborhood of three to $400,000 houses, which in the Bay Area is kind of on the lower end, you’re not going to put in the highest luxury counters or light fixtures. You’ll probably lose money doing that. Conversely, if you’re working on a luxury flip, you’re not going to put in low end materials because you’re probably going to lose money doing that. So knowing what’s selling and what’s desirable in each area is important. And we do that by looking at a lot of comps. I’ll go back six months to a year in an area online and I’ll kind of expand that area and see what were the houses that sold for the most and why did they sell for that much? Was it the finishes? Was it backyard landscaping for example?

I try to reverse engineer that process and see what people are looking for because I don’t have some list of home buyers out there where I can pull them and say, Hey, what do you guys want in your house? I try to be very basic because if I do some crazy thing like a backsplash people, even if I like it, it may not be very popular for the buyers. So try to stick with some neutral colors and tones. And I also follow a lot of hashtags on Instagram, which is Pinterest in a way. I can see what all the trends are and things that are maybe a little bit too new, the masses aren’t ready to appreciate. So I try to take in a lot of different trends and either local or national and factor those in.

Do you go to home shows and stuff like that?

I don’t go to home shows, but I do spend a lot of time at the home supply stores kind of knowing what materials are out there, what the prices are at different places. It’s actually, that’s one of the things about the shows that is so interesting. I think the people is selecting the finishes and coordinating. I don’t like it. It’s hard. Well, it’s fun when it all comes, but

You do it yourself, you do it. You hire a designer or something like that.

I’ve talked to a few different designers. I haven’t made any hires yet, but what I don’t like about, it’s just the time that it takes. I have a lot of things to do and there’s different parts of your business. If you’re a business owner or a solopreneur as they call it, there’s going to be different parts of your business that you enjoy doing more than others or that maybe you’re better at spending time driving around to all the different supply stores around the Bay Area to find the better price on a white shaker cabinet. It’s not the best use of my time, and I’m not a great designer at heart. I know what looks good, but I don’t know how to put it all together in this particular house saying this is the best combination of finishes for this house. I’m getting better at it each time. But at first was I was always scratching my head like, well, I don’t know what to put in there.

So that’s actually very interesting. Something you said a minute or two ago is that you reverse engineer other houses in the neighborhood. So that’s a great way, it seems to me to figure out what you need to do to other house because that, I mean, if you’re using those comps, you want your house to look as much like those other comps as you can in terms of what went into those houses. So do you go like to open houses? It’s hard to tell from an m l s picture or Zillow picture, what’s really in the house. Do you go to open houses and stuff like that and check out houses in neighborhoods when you’re flipping?

I used to, yeah. In fact, around the time that we’re about to select finishes, sometimes I will go actually look at those houses, but I stopped doing just for time. We have a baby. Weekends get kind of busy too, so open houses are always on weekends of course. So it’s harder for me to get out and go, especially if it’s not somewhere in my neighborhood. If there’s a particular house, sometimes the projects are 40 minutes away, so it’s always hard to go just for that reason to look

At

Those open houses.

Okay. So you mentioned this bad contractor that you have up there in Marin. So you don’t have a regular crew of people. I mean, you have this project manager now, so every project is like a one-off. You don’t work with the same crew and house to house or,

Unfortunately, because we had our model allow for projects in different neighborhoods. A house that’s in Vallejo will probably take a different crew than one in San Jose. So unfortunately, because of our model, we’ve had to hire different crews. But the benefit of that is that now I have other people to rely on in the future when I have another deal in that area. So as long as they’re available when I’m starting that project. So for the most part, each time I’ve had to work with a new crew, I mean, there’s a lot of great construction professionals out there, so it’s not always a bad thing to start meeting new people. You build up your network tradesmen and everything. So I’ve got a crew that I like in San Jose. I’ve got one on the peninsula, the crew that’s with us now on that nightmare project. The guys I have now are great, so I’d love to work with them again. A lot of different subcontractors too that I’ve met along the

Way. So how’d you find this new crew in Marin? How’d you find those people? Just from a referral or

Yeah. Well, coincidentally, one of the guys that was there, we hired him to do some project, I think it was working on the interior stairwell railing. He knew this guy that I hired, and so he brought him in because he knew the guy who was doing the railing knew that I was probably going to part ways with the main guy. So he’s like, why don’t you meet this guy Brad? And Brad came in with Ben, who’s the other partner. I went through the more thorough vetting process this time and brought them on. I started them with something small and kind of worked our way up from there, but coincidentally, they had been put on hold with another project they were going to do. So I kind of lucked out time-wise for

Them. So how do you vet them? You just call references or you checked their license with the contractor state licensing board, or you yelp them, or how do you met? All of the above.

All of the above. If you can go see some of their work, if they have other projects that just finished or are going on, go see the quality of their work call references, if they have any online presence. I always think that’s important to research and check and verify any kind of licenses they have. And then of course, workers’ comp insurance,

You actually have to say, show me your workers’ comp page. Yeah,

California’s tricky with labor laws and construction professionals. So I’m not going to give you any kind of legal advice here or recite all the laws, but it’s definitely something that it’s

A good idea to check all your contractors. Good idea. So you mentioned BiggerPockets is one place, you’ve learned a lot of stuff. Are there any other websites or books or podcasts or anything like that that you learned a bunch about flipping from?

I think one of the reasons I got to be where I am now and there’s still a long way to go, but I think what allowed me to get started and be successful was the fact that I really immersed myself in all of the resources out there. So BiggerPockets was probably the number one source, and they have a podcast too, but podcasts were the other thing.

Are there any podcasts that come to mind?

The BiggerPockets one, I mean, I have probably 10 real estate podcasts, the best real estate advice ever. Joe Fearless, Don Costa is another guy who has one. So there was a point when I was just getting started where when I was working at my job, I would spend a few hours when I was supposed to be working, going on BiggerPockets and learning, and then I would listen to the podcast or my commute, read the books at night. I was probably spending five to seven hours a day educating myself and learning. And so now I have so many books on my iPad, so many, excuse me, podcasts and different resources. I’ve used BiggerPockets Pockets podcast, the books Rich Dad Port Ad, and another one called Flip by Rick Ani was a more step-by-step book that was helpful.

Okay. Now, one thing I’ve often wondered about is let’s say you make six figures on a flip. How do you avoid the taxes on that, right? If you’re turning these things over in six months, that’s ordinary income, or they’re crafting ninja methods of not paying tax on any of these, not that you’re an accountant and anyone should talk to their accountant about any kind of tax issue, but is there any strategy that people do to limit their tax liability on these flips?

I would say that we still want to pay our fair share of taxes. Of course, of

Course we do.

We’re proud Americans, but the tax strategy for flippers, I wanted to make sure I had a good C p a, and I can’t tell you all the stuff he does. I don’t know it, but the capital gains are intense for flippers. I mean, it’s usually

Basically

Like 50% is out the door to Uncle Sam right away. So we’ve tried to minimize that. 2017 was our first year where we were flipping from the beginning of the year to the end. So we hired a good C P A based on a referral from another flipper, and it was important to find somebody who knew how to handle these projects. So we were pretty happy with the way it turned out at the end, but I can’t really name or quote any specific strategies to use because I try to stay away from, so

Just have a good C P A is the best strategy that you can use to limit your tax liability.

Like I told my wife, I was a finance major, not an accounting major, so don’t expect me to do too much with the books.

Right, got it. Okay. But you have an L L C, is that for tax purposes or is that for liability purposes or

Mostly for liability purposes, but also a little bit of tax purposes. I think some people do a corporation, but there’s a whole issue of getting double taxed if you’re an SS Corp. So we just do kind of a pass through income to our L L C to our personal side. But yeah, liability is definitely a thing you want to be careful of and not have too much going on in one L L C. You don’t want to put all your eggs in one basket in case anything does happen, which I think if you’re in this business long enough, you’re going to get sued at some point. That’s what everybody’s told me who’s been investing for long enough,

Right? Yes, it happens. Exactly. Okay. You’re going to get sued eventually. Well, I always tell people you can get sued by anyone at any time for any reason. Right. So that’s true. Don’t let that stop you. That’s true. That’s good point. Just keep on going. Right. So you mentioned you’ve alluded to a slow down maybe how the market is not as piping hot as it was like a year ago, and eventually there will be a downturn. I don’t know if it’s going to be this year or next year or in 10 years, but what do you think that means for the flipping business? Is that going to be good for flippers or bad for flippers, or how do you see that happening if it turns to a buyer’s market or when it turns to a buyer’s market?

I think it’s always in the seller’s market that we’ve been in the hot market, it’s harder to buy, but it’s easier to sell. And the opposite is true. And when it’s a buyer’s market where you can find deals left and right, but you’re going to take a little longer to sell. So the tough part is when it’s on that downward trend, because you could be buying something that you expect to sell for a million, but maybe five months later when you’re selling it, it’s only worth 900. So you better know what you’re doing in terms of your underwriting process. Now, markets you don’t know when they’re going to turn volatile. So it’s definitely a risk that we’re aware of. We have to be careful of. I think there’s probably more opportunity in a downmarket in a recession, but I think if you’re good at what you do and you know how to find deals, you know how to manage ’em, you can find deals and be successful in any market.

Okay. Alright. So this is just a bubblegum question there, but do you want those flipping shows on tv? There’s me and my kid, one of my kids. He loves watching those flipping shows, right? So he’s all about flipping. Do you watch any shows like that with your kids? We used

To watch Property Brothers.

Property Brothers? Yeah, I

Think they were charismatic. They were fun. The other ones, I’ve only seen a few minutes here and there. I don’t really know their concepts very well, but we used to watch The Property Brothers before I actually started doing this, so we would turn on HD TV at night. Really, the one I liked was International or House Hunters International. That’s fun. Just picture yourself living somewhere else, but

Right. Yeah, I watch a lot of those flipping shows. I mean, I don’t watch that much tv, but when I do watch tv, a lot of it is actually real estate shows. I guess I might have a problem, but yeah, I just watching him flipping out last night with Jeff, what’s his name in la? I don’t know that guy. I don’t

Know that one. But they’re always on when you turn on H tv, so it’s just easy stuff to watch. It’s

Actually a Bravo show, but yeah, H G T V too. So I would need to wrap things up here. Do you have any parting advice for our listeners? I know there’s so many people who want to flip houses, everybody wants to flip houses. Any advice for want to be house flippers?

If you want to do it or want to start? I would just first do the education piece of it. Kind of know the basics. There’s so many free resources out there. Then start talking to people. Start introduce yourself to somebody who’s doing it. I’m an open book. I’ll talk to anybody.

Okay, so that’s a good question. How do people find you? They’ll talk to you.

They can email me m [email protected]. I check my email every day like most people, or they can go to our website is Bay Area, sell my home.com, talk to people who are flipping. I got my start because I’ve met other investors who were willing to work with me on my deal. It’s a win-win situation because they can make money on a deal that was basically put on their lap. So I’m not saying that anybody who contacts me has to have a deal or anything like that, but start talking to people so that if you want to go out and do the work to find your own deals, somebody like me or another investor can come in and help you on that first deal. We’ll work together on it, show you what we do, work towards a successful project. So educate yourself, go network, and then take action to find deals. Those three things.

And do you want to give any shout outs to any local Bay area or real estate investment clubs? Is there a big kahuna of real estate investment clubs to people to go to start meeting other people in the industry?

Go to meetup.com, then type in real estate investing, San Jose or whatever city you’re in. There’s meetups everywhere. There’s a couple that I’ve gone to that I get a lot of value from. I think it’s called a San Jose Real Estate Investing Network. Guy who hosted is Jeff Pollock. He’s a great host. He always has good guest speakers. The networking there is great. And there’s another one, Raul Luna host in San Mateo. And then the third one is Joe Metz and Dean hea. They host one in Santa Clara at the Embassy Suites. So they’re usually on different nights of the month and they’re maybe 10 bucks, 15 bucks to get in usually.

Oh, really? They charge free to get in

Or free, but it’s worth every penny because you’re getting value from the speakers and the networking. So absolutely, a hundred percent recommend people go out and go to those meetings.

Well, Jake, I want to thank you so much for your time. I learned quite a bit, and I know that people who are listening to this are going to learn quite a bit as well. And again, these are a phone number that can call you on or is that on your website? Of course.

Call me anytime.

Text. What’s your number? What’s your direct number?

It’s five ten two two zero zero seven one two. Don’t be afraid to say hello.

Give him a text. And so if you got a deal or if you want to find a deal or if you’re a realtor or a wannabe investor, Jake’s a very nice guy and I hope that came across today. Well, Jake, thank you so much for your time and I I’ll catch you at the next deal.

Thanks for having me.