How to Build a $330K RE Investment Business With Just 1 Hour a Day | Real Estate Notes Show

Check this out today show we have Keith on here. Who's an ex-military guy Who was stationed overseas for multiple transactions? He missed the birth of both his children And then he dove into wholesaling in the hardest market in the country, Hawaii He struggled for a couple years my fourth year. He made over 30,000 $30,000 net profit. He worked it out. He does rep sub choose hard money lending Fix and flips all rental properties. He does everything he has all the tools He walks through all process of what he does how he does it and then he leverages it with some kick, but ai tools on Fast-tracking tools and technologies and stuff like that to make his job better faster and easier He also talks about the downfalls that he hears from his inner circle of investors.

We talks to every single week Welcome back to another real estate note show. I'm your host Dave puts alongside me as always mr. Nathan turner Hey, how you doing man? Good, man. How are you? Real good It's been it's been a fun winter. Are you being cold up there or what? you know where it's Being right beside the rocky mountains is an interesting thing because it'll go freezing cold And it'll be like, you know ridiculously freezing for a week week and a half and then it'll come up above freezing for another week week and a half And it just kind of goes back and forth back and forth So we're right now we're on the upswing and now we're going to be above freezing for the next week or so And so and then all the snow this lovely snow that we just got two days ago is all going to go away And then it comes back and round around we go but that's how it goes.

Yeah Um, I want to remind people before we get to our topic at hand Which is a great guess is make sure if you haven't already start looking at the dme down may That should be down in national that's for no creators No buyers and everyone else in between neck with people who are your level or above and learn from speakers who've been doing it for years Right. Uh, nate. Yeah, it's on a great show Man, we have got some awesome stuff coming up. I was just looking at my comp my Agenda tab here on my computer and we've got some really great stuff talking about ai versus vas And I know we're gonna talk about some ai today.

So talking about like kind of the the plus and minuses of both of those Talking about uh income stacking if nobody's ever heard of that how we do that and and it works so well with notes We're talking about attorneys there like free advice for a whole hour where you can just ask them questions and all kinds of different things We've got all these different things lined up. So it's going to be awesome show get your tickets right away because it's uh, it goes quick Yeah, absolutely. And for those who are creating notes, I did create a tool. Do you guys can start playing with? Uh jkp holdings dot com slash note validation Um, it's a way to kind of figure out if your note is valuable or legal A lot of criteria go into that Fill it all out then you can get a summary if you choose to you can see some negatives positives Those from interest rates so mobile homes raw land Not just what I like it just it's all about legal and what's available.

So it's really key for you Um, dathan one of the things we we press upon last year and this year has been about These idea of creating notes and real estate in general. We love real estate. Yeah Um, yeah as much we're adjacent to real estate. It's still real estate and I think that you know We want to bring in other guests who are very very Strong in what they do, right? Yeah, yeah for sure. And like you say real estate in general I mean we harp on notes a lot of obviously because we think it's such a great strategy. However I started getting into real estate in 2005 So it's been over 20 years now that i've been doing real estate in general the last 15 years have been notes And I hope that says something because I think it's such a great strategy that being said I also do real estate as well as like Aside from all my note stuff as well So it i'm pumped to get into any kind of conversation we're going to have about it because there's so many different avenues And one of the things that we really buy real estate is that your tools in your toolbox mean everything Next to your network, right? Those two features are crucial Right in understanding what each tool does how to use it When not to use one tool and when to use another is crucial and that can get very lost and tonight's cliche to say that Hey, listen, make sure you all your tools.

But what does that look like and what's real, right? Um, and we've been pushing upon this idea of sub choose and wraps and being careful and creating notes and for note buyers Making sure that they're buying notes that are actually safe and understandable and doing the math behind it yes Sometimes notes is not the only angle of real estate shockingly enough, right? As much as we don't like to admit it Yeah There are other ways that you can tackle any kind of real estate project and so Figuring out what's going to be the best avenue for that one and again we talk about notes all the time because we're such big fans However, yeah for this particular property.

Maybe the better strategy is x and that's part of what we're going to talk about today Yeah So one of the things we also talk about is our experience how we got into this game And what most people don't realize it doesn't happen overnight. We'd love to believe it does The knowledge experience comes from years. I don't care if you have a billion dollars and you buy real estate today Your experience is zero Doesn't matter how much money or bills you have that life experience of falling down and getting back up is the key to everything we do Um, absolutely. So we want to make sure we focus on that.

Will we go talk about this stuff? So it's funny our special guest today I came across them on social media and I said I gotta get on a phone call this guy's everywhere And I see him shorts everywhere putting on some great content got a phone call with him and he was like dude, it's awesome to finally connect with you and As much as a fan of his he was a fan of ours, which is tremendous And that network immediately bonds you start growing with people and that happens at conferences or phone calls and just connecting with other people in the space Is a key success ultimately globally for any industry, but especially real estate Yeah Connections.

I mean we talk about relationships a lot and and I hope That's what people come to realize is that it's not just about these online connections because those are great and that's wonderful and you can Learn some good information and do these different things but real connection comes from actually speaking to each other Yes, and whether that's on a phone call or zoom or one-on-one ideally conference. That's the way to do it. Yes, absolutely So without further ado, i'm gonna bring on keith on here keith. Welcome to the show man. I'm glad to have you on It's been awesome chatting with you Thank you, man.

I'm really looking forward to it. So give us a background of who you are Most people don't know who you are in the space where you came from. How'd you get in? She's a real estate And what was your story? Yeah, uh, well it got I got started in 2016 Um at the time i'll take you up actually back to 2015 Um at the time I was active duty in the marine corps and um, I was overseas And I got back home haven't seen my wife in a long time And I knock on the door of our apartment and she opens it but she only opens it like four inches And she says close your eyes And I go like what the heck I haven't seen you in forever like that's the last thing that we want to do right now Why do I have to do this? And so I literally dropped my bags And and I closed my eyes and she said all right come in and hold out your hand And so I hold out my hand like this and she puts something in my hand and she goes you keep your eyes closed But you can use two hands.

So now i'm like this and i'm i'm holding this thing and it's circular and um Immediately, I go to marine corps training. It feels like a pipe bomb so I go it's not gonna explode. Is it and she's recording this by the way, this is on youtube y'all can find this um, she goes, uh I don't think so And so i'm feeling it and I have no idea what this thing is and after about 10 seconds of struggling She says, okay, you can open your eyes now and I look down And i'm holding a baby bottle with a positive pregnancy test inside And uh, and my wife had been pregnant the whole time that I was gone and she didn't want to tell me Over the phone.

Wow Right, that's cool. Um, I missed the pregnancy. I was there for the birth of our daughter in 2016 And then uh, quite literally the very next month. I went back overseas And I came home 2000 and uh 2017 Same thing open the you think I'd wise enough, right? She opens the door close your eyes I close my eyes and this time a little bit different She gives me uh, she says open your mouth. And so she was feeding me. Um a cookie This is also on youtube. It's kind of funny. She's feeding me a cookie and she had made it But there was like some plastic in and I was like, oh there's like something in my mouth And uh, she goes you can open your eyes and she's recording like this, you know, and uh, and I didn't realize it but in her hand again Was a plastic bag with a positive pregnancy test And I'm so focused on the cookie and I didn't realize it until I saw her still holding it And I literally collapsed I dropped down to my knees And I was happy and sad at the same time because this was the second time that I had missed Her pregnancy.

Wow So so that thank you very much for your service by the way. Thank you. Yeah, absolutely. Thank you. Um that got me Right there like you can actually see the moment in the video i'm on my knees. There's a lot of realizations And and for the next couple of years, I I continued to go overseas 13 different countries And every single time I would come home My wife had to reintroduce me to my kids because they didn't know who I was right. They were growing up without me So a little bit about me personally, i'm an only child no siblings and uh, and my dad died when I was eight years old Oh my goodness mom And and so I was raised without a father and I realized when my kids were two years old and one year old I realized my kids are growing up.

Yeah without a father as well Except except I don't have the excuse of being dead Right, like i'm alive and i'm well and i'm choosing this lifestyle and I can choose something different And um, so I read a book that you guys probably have read and almost everybody here has has read a rich dad poor dad By robert kiyosaki and uh quite literally the very next month. We created a corporation an s corp designed to Fix and flip houses, right and I got started with fortune builders and right after fortune builders. I hired Robert kiyosaki with rich dad coaching and then right after that went into john martinez sales and negotiation And I have continued to purchase courses in the last nine and a half years of some of the greatest men and women who who teach Sales or marketing or or structuring deals or analysis or fixing flipping rehabs raising private money, whatever it is, right? And uh, so that's how I got started and I I was really set from that moment 2017 when our son was born man, like I love the marine corps.

I will never say anything bad about the marine corps I absolutely loved my time in however, it was good just for a season for me and From that point forward. I was trying to work my way out of that job and into Some some financial security in my own business and I was able to do that about three years later 2020 I was able to get out of the marine corps eight years active duty And then the last uh, the last six years i've been out doing real estate full-time. Oh awesome. Great story Great story. That's awesome. So you got into isn't that great that the freedom that the real estate can provide and and we got to be really careful about this because It's not like there's no work There's a lot of work.

Oh, it's gonna be the hardest thing you ever do Anybody tell you different is trying to get your money. So absolutely you got started and it was easy, right? You jumped in there. He bought deals you went flying high right? Everything was perfect. Uh, no I I uh, I floundered for four years I was just on the struggle bus. We started in 2016 And really, um, I only had about an hour a day to work my business at the time Um in 2016 I was stationed in quanaco virginia, which is right just a little bit south of washington dc But then in 2017 I got shipped to hawaii beautiful place wonderful place to live However, it's definitely the worst place to be investing As a white dude, it's really hard to buy houses In hawaii, and so I actually ended up breaking out and doing everything virtually 100 virtually to right now i've done deals in 34 states, um, but at the time in hawaii Active duty and and so a lot of people don't know this but there's a six hour time difference between hawaii and eastern standard time So i'm getting up at five o'clock so that I can leave at six Uh so that I can be at work at seven for physical training pt And uh, so i'm already getting up early But if I wanted to make a you know an hour hour and a half of phone calls now i'm getting up at 3 30 in the morning In order to make I don't know about you guys But like i'm not a very happy camper I could drink a whole pot of coffee and i'm not in any better mood I just really have to pee so It was not sustainable for me to Be waking up super super early amongst my my workload, right? But I also couldn't call after I get done with work I'm typically getting done with work around five o'clock and then i'm home around 5 45 Let's just call at six o'clock by the time i'm able to put on the headphones and look at leads Well 6 pm eastern standard time is I mean, excuse me hawaii standard time is midnight eastern standard time Go ahead call somebody and see how many houses you buy.

You are not going to get anybody to sell you their house and so I was stuck in this conundrum of I can't call before work can't call after work Can't call during work because i'm not allowed to have my phone on me. You got to stick your phone in the lock box Well, there was one hour where The government couldn't tell me what to do And that's what civilians would call my lunch break. We call it chow, right? You get an hour of chow every day. You can do whatever you want during that time And so I just drank a protein shake with a straw. I'd go out to my car I'd don my headphones bring out my laptop and I would call sellers And I had one hour every single day that I could actively call sellers, which means that Really if you think about just in plain english what I was trying to do I had one hour of inputs one hour that I was able to put into the business, but I was expecting Eight hours.

Yes Because i'm trying to replace my job, right? I'm expecting eight hours of outputs so that I can leave my w2 my quote-unquote nine to five But the marine corps is not a ninety way harder than a nine to five. It's a lifestyle, right? and So that one hour of inputs needed to result in eight hours of outputs That's really hard And so for the for the next four years, we developed A lot of systems that now have turned into a whole full-blown software company Uh because that time needed to be so effective and so efficient To turn that one hour of inputs into eight hours of outputs That's awesome.

Wow. That's awesome. Yeah, like you said that's phone calls like You got that's that human touch that has to be part of the equation. So that's a that's a tough So you you you did all this stuff you hustled and you finally what was the point you actually finally felt you broke open you You're afraid Um, it was right it was during a really weird time in my life So in in march of 2020 we had covid right and that shut down the marine base for like For like 50 or 60 days like nobody could even come on base They just had security and if you live there you could go on if you didn't you couldn't come on We didn't really even open up shop back until like I think it was like may or so And then we had half days Well, it was just around this time that my business is starting to take off which is a huge blessing because I knew that I was going to be getting out in december of 2020 and Man, we we did really well that year.

Um I think we we just broke 330 thousand dollars of net profit like cash in the bank not i'm not talking about equity I'm not talking about cash flow or anything like that. That's how much hit the bank account much of that was Was wholesale and fix and flips as much as i'm ashamed to say it. Um, but but it did bring in Um a good amount of income and then joined with you know, what what my what my wife was bringing in and then what I was bringing in from the rain core I'm 25 years old, you know, like i'm making really good freaking money. Yeah Let's get out now. I feel confident in getting out but admittedly if you were to look at the year before We took losses the year before we took losses the year before we took losses And i'm not saying that we didn't make money.

We made hundreds of thousands of dollars We just equally spent hundreds of thousands of dollars. Yeah. Yeah, and so ultimately ended up being You know losses stacking for four consecutive years Or I should say three consecutive years and then on the fourth That's when I really felt like we finally kind of made a break in the in the business Did you stay with wholesaling or did you adjust? Yeah Um, I definitely adjusted I was getting frustrated with my little Five ten fifteen thousand dollar assignment fees and I also realized because there's a great game called monopoly Uh that that here's this house that I have, you know At 50 cents on the dollar 55 cents on the dollar and And i'm selling that asset to make money and it's good money.

I'm not saying that $40,000 or 60. I mean, I still like that money. However It's a one-time thing and the moment you stop Yeah, stop getting paid. Yes And so I was constantly spinning my wheels and I had good people in my corner as well I had good good mentorship at the time Um who is actually teaching me notes 2019 is when I started really getting into notes. Um But for the first four years I really couldn't Do any of the fix and flips because I was overseas and oftentimes We didn't we didn't have literally we didn't have running water much less electricity or wi-fi And uh, elon musk hadn't put a billion satellites up in space so I couldn't get it that way either Um, and so there would be there would be times Weeks at a time where I didn't have contact with the outside world.

You can't properly, you know, lead to construction through doing that Yeah, and uh, and so it was just wholesale However, as soon as covet shut us down and then I only had half days and then I was about to transition out of the military 2020 was an amazing transition period for me and it was that year where I transitioned into primarily fix and flips whole tails and full retail properties Not saying I go the whole Uh, joanna games make it like super beautiful, but But they were we put out a really nice product and um So the first four years if I could summarize it it was wholesale heavy Next four years as a summary I would say it's fix and flip heavy and then the last two years has been rental heavy And notes have been a part of that.

Although not a focus have been a part of that since 2019. Got it. Yeah Tool in the toolbox. That's that's exactly what we talk about At the very least I mean, yeah, I do it full time, but at the very least it should be a tool in your toolbox Yeah, um as much you may hate a method if it numbers work and it makes sense That's the first thing you should do is don't force, you know Square peg in around a hole if renting is the best option here go with it. Go with the market availability Um, we often try to force something, you know, I we hear people who buy notes first thing is to listen I'm buying a performer.

Well, what happened to false? I don't know you mean I bought a performer Well doesn't mean to stay performer. It means you have to adjust the times so How did you when you first learned about notes? What was your first impression coming from the real estate side? Um, I really liked it because with With wholesaling which was what I was doing at the time. It's just one profit center. It's just cash right now But with notes It's a three-part profit center where you get some of your cash now And then you get cash flow for a certain number of years and then you get cash later Whenever you whenever they balloon you out with traditional financing or whether you sell the note or hypothecate the note or whatever You have cash now you have cash flow and you have cash later.

Yes, and that was really sexy to me, right? This is like, oh, I like that I can get paid over and over and over for a decision that I made three years ago Yes Yeah, absolutely and you don't have the liability of the property more. You don't have tenants anymore You get out of the headaches of being a landlord When you become a lien lord? Shifting over right is there times today where you take on a property and You go down a pathway that you didn't think you were to go down simply because the deal Brought you that direction 100 percent so Ironically this happened yesterday one of us so I have um, I have office hours Monday Wednesday and Friday where all of our clients not all of our clients but anybody who needs help hops on a zoom call and we do a lot of deal analysis and deal structuring and one of one of our clients had put a property under contract on Monday and And no, excuse me He put it under contract on Friday under the pre-supposition of i'm gonna i'm gonna rent this one out This looks like to be a really good rental However, then he found out over the weekend doing some due diligence continued the conversation with the seller that they actually owed way more on their mortgage Than what they originally told him And um the interest rate was way higher.

It's two percent higher than what they told him Anyway, so he comes and he's like dude. I just put this property undercut I mean we analyze it. It looked great and now with this new information It looks like it's a complete and total dud. I don't see Any way that I can make money on it even to include owner financing It's one of the ones where it's like dude that you have like eight thousand dollars of equity like that's not you can't even write in The paper that the note is drafted on is worth more than that. You know, like i'm not gonna hold this Um, if anything goes wrong, you're out the gate.

You're already burying ten thousand dollars Even after you get refunded from this the new buyer's down payment You're still burying cash in this deal you're cash flowing like a hundred dollars per month. I mean it was just a terrible deal however We analyzed it uh every which way And the only way that it worked was with the novation And so I was like, oh wow, I wasn't really expecting that and I like novations. Don't get me wrong. It's still extinguishing an asset However, if that's the only way that you can help the seller You know, we talked about this really? uh briefly before the call but uh a lot of times I here's the analogy that i'll give The deal is a lock like a master lock like a like a padlock, right? And you have to Find the right key And there's a whole bunch of keys you think about it like a whole lanyard.

There's a bunch of keys on this lanyard and um, I don't know if there's there's probably not any locksmiths that uh, Are listening to this or maybe there's some Uh people who like to break rules and pick locks but keys they have typically there's four different height settings of a key And and that's how you get the teeth some of the teeth are at zero which is the lowest and there's one two and three Which is the highest peak on a key? And and so I think about there's four Variables in every deal structure. What are the needs of the seller? What are the needs of me personally? What is the highest and best use of the property? And where are we in the market cycle? What is the market telling us we should do with us? And those four different variables are either going to be a zero one or two or three kind of like that key It's our job to find the right combination of these because sometimes we're going to do a sub two entrance and owner finance exit Where other times we're going to have an owner finance entrance and a novation exit Sometimes we're going to do a cash entrance or whatever dscr entrance and we're going to rent it out Like there's all these different entrance strategies and exit strategies and it's on us as the investor to look at those four Variables in the deal and determine what is the right key that unlocks this the profit center of this deal? Also, yeah, absolutely Yeah, absolutely And it's it that's part of what I love about the real estate game is that I think when I first got into it, I was fixed doing fix and flip but that was that was the game Back in you know, 506 when the market was just doing this and it was just that was just the thing to do because It was going to appreciate next month.

Anyway, so just go ahead and do it. Yeah, but but what i've kind of come to realize over over different strategies and different things in real estate is Um, it's really more of a thinking game than a physical game Absolutely, and if you can think through the problem and say, okay So what's the best solution in this case? And that can be that can be anything that can be you know down to modifying a note what's going to be the best way to Work through this situation and you just kind of Deconstruct it and and let it be what it is Yeah figure out what the problem is and then attack the problem and that's the way to do it And I I find that so interesting and so fulfilling.

Yeah, it's a game. It's still a game It's like monopoly like you said before totally so Keith, you know in today's world, you know people are doing so many things that are just either lost staking um Off see their pants stuff like that um And a lot of this stuff is due to just them just willy-nilly Um, we talked before we got on the call That you're using tools to do some of stuff. What are some tools that you use? To kind of help you along the way that someone today can either use today or in the future That may be listening to say man. I love his story. I love to do what he's doing What are some tools you use on a daily basis to help you get your? Past done Yeah Well, oh that's a two-part answer really and and before I answer it, let me tell you the problem that that we solve first And a lot of uh, again, we have a lot of clients that are analyzing deals and and we do really good with the marketing And we do really good with the sales and negotiation And we do good with the structuring as well.

And so sometimes Clients will bring a property to me and they're like dude This works every way I could wholesale this I could retail this I could hold it as a rental I could wrap the note we could do a lease option like They have a huge a deep discount Not just like price equity but term equity as well one of our clients literally put a property under contract This was also last week Where it was zero dollars down the seller is getting that's not true He's going to give her a thousand dollars at close but on paper like the purchase and sales agreement nothing and Uh, he is gonna keep the it there is a mortgage.

So he's taking it sub two um, but no payments and no interest Until he sells the property he owes her a hundred thousand dollars And he said full and like I have no intention of this is a cash cow like he will cash flow 12 1300 on this as a gross um And so he was like I don't have any intention on selling this so it could be five years It could be 10 years It could be 30 years down the road that I decide to sell this and you finally get your 100 000 This call is being recorded. Do you understand this? And and she was like, yeah, I don't really care just Bring my bring my mortgage current so they don't foreclose on me Right.

I need it and I need her I won't go into the details, but she needed to get out of the situation that she's in So he brings this this deal and i'm like, oh my goodness sakes like you have so much discount on this first We never extinguished zero percent interest money, right? And with no payments. Oh my goodness sakes And um, so we're analyzing it every way So to answer your question, dave I have a lot of people where their their deal can work a plethora of different ways and so part of our software we call it an apples to apples comparison and they plug in all of the Details of the deal and we look at every entrance strategy that's feasible And we take it sub two is their owner financing that's available Or a hybrid of both of these things Are we gonna look at it with a cash entrance or hard money or private money or hard money plus private money? What about a dscr purchasing product, right? There's all these different entrance strategies that we could even coming to like conventional stuff We're going to use it coming from loan fha And then what about on the dispo side? Are we going to wholesale, hotel, retail, wrap, rents, novation, lease option, owner finance, whatever We look at every single one of these things and how I break it down.

This is so important There are three Currencies of life There's time There's money And then there's the one that we don't really talk about that often which is energy There's time there's money and there's energy and so I ask myself three questions How much will I make? How long will I take? And how much do I need to raise? This is time money and energy. How much will I make? How long will it take and how much will I need to raise? now there's The money is also broken down into the three-part profit center cash now cash flow cash later And then we analyze the deals every single entrance strategy every single exit strategy against these things How much will I make cash now cash flow cash later? How long will it take and how much will I need to raise? Sometimes The one that makes the most money For example if we were going to do a novation Or a wrap actually wraps typically are going to be the one that gives you the most money because it's the three-part profit center sometimes That's not what you need.

Yes Sometimes that's not you know going back to the key analogy sometimes that's not the magic key that unlocks the deal Sometimes you need the money now and you need it really quickly or you need a lot of it Because you have payroll coming up and you have to pay your employees you have whatever the circumstance is So we use our our deal analysis software that that shows this apples to apples comparison And and largely there I have a system just like that I love systems if there's anything that I hope that I can be Uh known for or remembered by it's Like keith has a system for freaking absolutely everything if I have to do something more I have a rule of three if I have to do something more than three times There is going to be a process that is written out It is visually illustrated with a mind map and there's a video walking you through exactly how to do it this way That way it can be automated or it can be delegated.

So have you automated taking the garbage out? That's one thing I can't automate yet My son does it so it's delegated. It's not automated, but it's delegated That's awesome And ai is a big tool in our tool bag, right? And you know, we're not gonna die deep in this call, but you know You're sharing beforehand you do a lot with ai a lot of automation and there's a lot out there A lot of people are nervous about it But what we're finding ai and all these systems does is it helps you do things quicker? more Less errors, right? And the fact that it will It will allow you to broaden where you're at where you can expand To reduce the errors speed up your time but bronze you where you can do more I'm with you If I have to do things more and more and more i'm gonna find a way to say I manly did it I'm gonna automate that process and then you find yourself automating more and more But there's times where you need to have a hand on that process as well.

It can't be completely automated for the most part When you're doing the notes world and you're working with your clients and we talk with the people on the show all the time about this What we're finding is a lot of people are are doing rap notes Just for the cash flow Where they're not paying attention that if that goes dead, which we had someone our private call talk about, you know They had a pool of assets and it didn't work out Similarly because there was no equity You know are there people out there you're running to get into the spots where you can't help them whether they bought a deal or they Got no deal that They're stuck And it's like man, there's no way out of it Yeah, there there is especially right now and and I say that It's really unfortunate and it doesn't happen very often admittedly But if you think about like 2020 2021 22 23 real estate market was really good interest rates were Literally negative when we're looking at what is the inflationary environment that we're in the interest rates were less than inflation Therefore its negative interest And and people were I mean, oh my god when I was in hawaii people were literally bidding over $100,000 more than list price Simply because they had the buying power because their interest rate was so low And now that we have interest rates more normalized days on market has been extending nonetheless people have overreached and Unfortunately, if they have refinanced typically in the last like 18 to 36 months Dude, you haven't paid any amount down on your unpaid principal balance and The house values I live in florida if you look at how much house values have fallen in florida in the last Not even one year.

Um in especially in some areas it's astronomical and when you couple that with With Because of some storms that have happened the amount that the interest rates have literally More than tripled in some areas. I was talking with a lady near near the tampa area and her Insurance alone because she's in a flood zone was 1300 and something it almost was $1,400 per month Wow for her house, and this is a regular plain jane like $450,000 house Yeah, wow people cannot afford that right? And so if their house value is falling Nonetheless, their monthly payment is going up It doesn't matter if you wrap it you rent dude You're underwater and it doesn't it cannot cash flow because you're getting priced out now Fortunately, I do live in the greatest state no matter what anybody says and our governor desantis is absolutely amazing And I think that he's going to be the first one that abolishes taxes On on real estate so property taxes lord willing is going to be a thing of the past And if that's the case that will help.

However, I don't think it'll solve it Yeah Yeah There it's it's rare but there are certain situations where We were talking about this before is like maybe your best play here is weight and yes that that can be a very tough spot to be in as well, but That's as if you're going through and looking at like best case scenario. What's our best exit here? Hang on Wait for the market to catch up and and create some equity just with time Yep. Yeah, that's what you got or tape or I hate to say this but take a loss or don't make anything I was speaking literally Yesterday morning. I was talking with a lady who Now she just owns land Yeah, there no longer is a property on it because it got hit by three storms back to back to back And got wrecked, right? Yeah And so she's actually had this thing listed on the market for three years and two months the land alone She's asking in my opinion fair market value.

It's okay worth every bit $25,000 and she has it listed for like $29,000 Nonetheless in three years She's gotten five offers total. Wow Wow and And she's done because she has to pay I don't remember if it's 600 or 800 dollars per quarter But but she's in an hoa so she it just lands Unless she still has to pay that 600 for the hoa and it's 4200 dollars per year in taxes. Yeah so this equates to $20,000 that this property that's just sitting has sucked out of her Regular monthly income and that has prohibited her that was going to be her down payment But she's forced to rent right now and she can't even afford rent She's literally staying at her friend's house and has been for almost a year and a half In the little apartment they have above the garage.

They don't even charge her rent. She just helps around or you know around the house and i'm talking to this lady she has just such a Quite the story and i'll tell you I won't go into any of the details but but I felt for her, you know and and I said, you know my primary concern buying this house, I think that I think that you're offering a fair price for this right $29,000 is totally fine I think that you have two options and really you have three But you don't like the third one So i'll state it but I don't think it's viable option Number one is just lower the list price as much as you possibly can stomach with an agent Maybe you'll get ten thousand dollars for it, right? Do that if money is more important than time.

Yeah If if time is more important than money and you don't want to pay because she has to pay taxes here coming up She's about to cough up another hoa fee If If the time I just want to be done with this is more important than the money then you sell it to an investor But realize that that investor is going to take Six eight twelve months to sell this stupid parcel of land They're gonna want to make ten twenty thousand dollars on it myself included and and The third option Continuating Hold out. Yeah Um, and that yeah, I mean that was a hard conversation to have. Um Because it's one of my aunt's friends.

Wow Yeah, like I don't know her but we're really close with my aunt I want to do right by her and I want to help her but she's in a very similar outcome that we had with The call we had a couple weeks ago with group investors and it was either Take a huge loss file bankruptcy Or just wait five About eight to ten years we're expecting Yeah, or to be somewhat valuable and that's a heartache most people have to fact But let's dive real quickly into that that could be prevented right a lot of these things can be prevented If they were thought beforehand and we've talked about this on our show before That people jump into this game way too fast sometimes Because they see all the gurus and all the speakers talking about it.

They don't take a minute and think about the deal Um, yeah What what's the end goal and they just grab whatever they can grab and make the quick buck or quick deal or Or just brag that they got a deal and that's a problem right face you know Your space is a lot of Fraud in it right a lot of fraud um, and it's it's the wild west in some kind of cases and that kind of stuff scares us because We're seeing a lot of that problem um In your day to day, how much are you running into problems where? You kind of cringe and say oh my god, like I feel bad for that person Knowingly or unknowingly they did a deal that they shouldn't have Well, i'm going to change my answer a little bit, um because Fortunately, uh, I don't get I don't have to deal with that very often.

Okay I was uh, I was just interviewing one of our clients on friday and he said, you know keith last quarter You actually killed three deals that I was gung-ho about that I had under contract that I was going to do You killed three of them And and I was like, oh my I am so how you know, like he said it like a bad thing And then he was like, but i'm so thankful Because I went back and I calculated they've sold I went back and I calculated I would have lost more than $40,000 they would have been small losses right this one ten thousand dollars Just on 25 000. Nonetheless those three deals at where he had put them under contract He would have lost more than forty thousand dollars and he said i'm so thankful that I brought that to office hours And I had you pick it apart and poke holes in the deal and tell me that I was wrong At the time I didn't want it.

I didn't want to admit it, right? I didn't because he's new he started with me Nine one twenty twenty five. So yeah, september 1st, 2025 And since then he's done six deals He would have done Nine, right? But then I killed these three and He's stoked because all the deals that he's Has done only two of them have gone through he's he has two more that he owns that he hasn't sold yet And the others are one of them has fallen out. Um, but the others are on track and he is Projected to make 400 and I think it was 430 or 440 thousand dollars across all of these Cash in the bank Yeah, that it is so important.

It is more important dare. I say it is more important to not do a bad deal Yes, than it is to do a deal. Yes, especially in the beginning because one bad deal will take your ass out for a very long time Yeah And no matter where you are, it takes you out and then like recovering from that You know hole that you've just dug man Emotionally, and how do I know right? Yeah, that's right Emotionally sucks. Are you like you start questioning yourself say man what I do wrong Nathan's perfect his deals look great because he ain't gonna put those bad things out there I look and go man. I did a terrible deal man.

I'm terrible and you start laying down on yourself and say man Nick goes back to the community bring around you right saying okay. Yeah. Hey guys, I failed And that community brings you back up and say let's fix that problem. Let's make sure it never happens again Mm-hmm, because this is the experience is what brings you to become better Right. You're not the best when you start off you learn from others around you Um, yeah, it's amazing Very cool. It's really important to have somebody Do a second set of eyes somebody who who has done that sort of deal, you know That you could bring it to for them to potentially kill it and you have to be okay with that.

Yeah, it's better It's better to nix it in the very beginning then take the risk over leverage and then the bad thing Happens me and Nathan did all time with people who are in the self finance world where And if you have deals where you want to break down with us give us a call and we'll do a free call with you Is you know is this deal worth doing? Because a lot of times they get deals with no equity they go for the yield play Um, and then they borrow every dime they get into the deal and they hope for that windfall Um, and a lot of times your only winning is the money that they get down payment That's it.

And when you do that you have zero exit There is no possibility of coming on the other side Um, because what most people don't realize is if you do that rap note and we've talked about this on the show before It's like doing rental properties with a bunch of renters who stop paying you still have to make money Um, yeah, and you can't project that your renters will stay forever It is it's not it's not the truth Um, they could But I don't think you want to start your investing world one coulds or you had that plan involved And we've done that several times actually together and separately where people called us up and said hey, here's the deal i'm putting together What do you think and and and we'll do that? We'll talk it through and say okay If you adjusted it a little bit like this or if this was a little bit You know and just massage the deal and make sure that it makes sense.

Uh, yeah Second set of eyes like you say keith so keith, who do you right now using for like armalo and underwriting? How do you structure your deals with those? And I know you're not gonna ask what armalo is so which is a good thing Yeah, yeah so We um, I I have used mark ross in the past and recently have uh, just the last one actually Um first one was with call the underwriter. Yeah, but damn. Yeah before that I had An armalo that was with a note servicing company and it went really bad and so I won't Okay, I won't throw their name out there But yeah, but i've had um two actually two note two note servicing companies that were just wow Trash they actually put me in pre-foreclosure both of them back to back too I went to the second one after firing the first I transferred my notes over and said Y'all need to take care of this and then literally three months later.

I found myself Why is why am I getting this notice of default? Are you kidding me? Are you kidding me right now? I just dealt with this problem six months ago. Yeah, and um, and so we did in-house Servicing we still do an rmlo, but then we went fully in-house up until December last month, okay, we got to connect with dan and i'm over there So the quick plug for dan depp and we call the underwriter high five and good friend of ours. You bet. Yeah, yeah, so and then So you're doing the rmlo work you're doing the underwriting which are crucial to all these deals Do you find that people that's a Hurdle for a lot of people where they they don't either do it right or don't know do it right or Don't think about it Yeah For I think there's actually two issues with this number one They don't know about it number two if they know about it, I think it's too expensive And i'm here to tell you number one If you don't know about it, you need to learn about it because if you don't Uh properly underwrite the deal then you have no leg to stand on When you try to sell it or borrow against it in the future And that is absolutely positively nearly 100% of the time going to be a prerequisite from some unless they're just a blubbering buffoon and they just trust you a lot and they happen to be sitting on a lot of cash and they've never Done this before then maybe they won't know to ask did you get this professionally underwritten? However, anybody who has money who? Regularly buys or lends on nodes is going to ask you number one Can I see the underwriting and number two is it being serviced? And the answer to either one of those is no They're not going to work with you and you're up a creek, right? And then going into the second thing um Are you know our arm alone? I think it's uh, I think it's 900 pretty sure for um for underwriting.

Yeah, and so People say what isn't that, you know, super expensive. That's just a cog in the wheel It takes a couple weeks to get it done. I don't know if I want to pay for this and everything. Well first um The amount that it costs is far Outweighed by the benefit that it provides not just Not just if I want to sell or if I want to borrow But how about just the fact of the matter of I want to make sure that i'm putting this borrower in a position where they're Set up for success rather than destined for failure. Yeah I want to know for a fact and and like I mean I know how to underwrite but I Don't do this all day every day like yeah, why? Do you hire plumbers not do lichical work you don't hire lichician do plumber work So we talk about this sort of show and we have a good friend.

Sohal from private services. Yes He's he's the one who services me Right Um and he gets together with us every couple weeks on our private call, which is great And one of the things he shares about and you know, make sure the community knows this A borrower can rescind on a deal if they're not properly underwritten Your obligated to pay back over three years of principal and interest payments out of your pocket So they lived there for a year and they defaulted And you didn't properly underwrite them you they actually have to get all the money back and then you have to foreclose on them Yeah, and you victim out of the property.

So it's not just say you did a bad job He's the borrower of failure that borrower didn't say I got a hold of attorney and I am free Yeah, and now you're out of principal and interest and you gave all the money to your sub two company You're in a really bad spot. So it's for our hypothecations. It's for selling notes with people like us. It's also for What happens if bad things happen to this borrower that you didn't plan on you don't know if they're gonna live dead sickness Whatever divorce drugs anything Is protecting yourself and your legacy and your wealth your life-changing environment Um, and I think people lose out on it that these aren't just a thousand-hour gotchas These protect you for lifetime of wealth and living on stuff Um, yeah, we see too many people not following these rules Time and time again, and we didn't want to make a show about that But we want to press fund, you know keith doing everything right guys So he's somebody you want to leverage up on and connect with keith on off hours During his office hours but off hours when you're you're struggling when you're worrying about things because one thing we realized in this space is that When we're honest for ourselves is when we actually learn the most Yeah, ask questions.

Nathan. Do you have any other questions that before we go to our final questions for? Keith before we So two things i'm wondering What is uh, what's the name of your software and like is it launched already or is it just coming out? Oh, we have so many So the name of the company that everything falls under is rei automated So that's that's in the sign behind me rei automated and we have several different softwares. We have multiple degeneration software so we have um in deal labs, which of just 15 second pitch would be scrape enrich Analyze and pitch so we do the first three we're scraping real time data the moment that you search that zip code that county that Whatever city we are scraping We're pulling from facebook marketplace and craigslist and the mls and for sale by owner and zillow anything that is on the interwebs We will find it And and then step two is we enrich that data So we're buying data from from big data centers to because you can't trust the zillow's estimate much less their Rental estimate right? So we're going to pull comps for you, right? So we we built an aiv artificial intelligence valuation as well as air aire artificial intelligence rehab estimate That looks at the pictures of the comps that looks at pictures of your house and then determines Well, what is the bed the bath the square footage that you're built? What's the arv? Um, what what is the the zip code that it's in and from there? It's going to determine well, what do you need? What's your repair estimate to get it to full retail condition so that it's valued at arv, right? And so all that's built into dealabs.

We also have another one that's coming out not launched yet, but will be next quarter Called deal base and again a lot of ai is in this one as well But but this one isn't live data that's listed. This is actually unlisted data. So these are your typical um Lists that many people purchase from from different data providers whether it's absentee owner or high equity or retired landlord or whatever We have all those data points as well where we excel and where we're different is analyzing those With ai to include aiv and air so you can come in and i'm not going to tell you that the house is going to flip itself But we do a really good job analyzing it to make it super super easy for you And then going into more of like our in-house crm Inside the crm we have 389 automations Inside our crm we're we've already launched this internally with all of our clients Um on the 1st of february is actually going to be our kind of our public launch if you will february 1st 2026 Just a couple days away and um So i'm really oh my i'm so excited.

This has been a 13 month project for us, but we have 389 automations. So all of these Stupid repetitive mundane Minutia tasks that we as entrepreneurs like frankly we have to be doing to to be a good leader and to be Fiscally responsible and a good operator of our business to make sure that everything is running as it should Like doing it because it's not the thing that we're good at or we don't want to or or we're working on the business Rather than working in the business, which I mean all these things are good But Can't drop balls in the business either. Yeah, and so As much as we can automate things we have there's no other company that that I know of anyway that comes even remotely Close to us when it comes to automation So that's all in our crm and then also inside our crm.

We have a script building software. We have a deal analysis software Um, there's a lot of things I could go on and on follow-up sequences and everything um AI, you know colors Both follow-up colors triage colors Dispo, I mean it's The excitement's in the air. That's cool Yeah There's so much development that we've been working on all of 2025 and it's just getting better and faster as we get into 20 26 with our agentic ai's Yeah, it's I mean I own the freaking company. It's hard for me to keep up with what we're we're building because we're implementing things so fast That's awesome. Well, we'll we'll talk offline.

We'll see what we can do to get you to to diversified mortgage Yeah Can talk about it more there? very cool, yeah, so we're we like to kind of close up and just We're so Lucky to have this chance to talk to people who are just know stuff and know a lot of stuff that we don't know and so we um We like to get just kind of your what's your prediction going into 2026? We're we're still at the beginning of 2026 Going the rest of 26 maybe into 27 like where do you see the real estate market going? What's the best play? What's your thoughts on all that? well, i'll start off by saying I I live by two quotes kind of uh Smushed together one of them says it's better to remain silent and be thought a fool than to open it and ex You know extinguish all questionability or something like that.

And then the other one was um A fool speaks in order to say something and a wise man speaks when he has something to say Yeah, and so i'm not going to pretend like I have anything to add to this I have no idea what's gonna what's gonna happen. I do uh, I do have my own speculation that we're entering a bumpy ride in 2026 I don't think that there's going to be some miraculous Uh up spin and the market's magically going to get better and I also don't think that it's going to tank Um, I think that there's so much uncertainty With so many things whether it's the political office whether it's ai whether it's the environment of we just got out of a crazy 3% interest people are spending way too much money to now nobody has any money, but Like wow, we've never had so many unknown variables In our whole history that we've recorded that we have data to go back Oh, yeah, I remember back in 1850 where where this exact thing? No, never in the history of ever have we? We're in right now Um, so I don't know when it comes down to it though.

Here's what I I do believe is super important to understand The there is one universal law of making money and that is buy low and sell high and there's one universal law of Keeping money which is don't lose money So we need to buy low and sell high without losing money Which means don't involve too much risk in our business. So in my opinion Um, i'll leave with with two things here number one evaluate every deal upon reasonable worst case scenario still being net positive as long as that integer is Above zero. I don't care if it's one dollar. That means when reasonable worst case when feces hits the oscillator You are at least not losing Yes, you're just making less than what you originally anticipated and I I live by a couple rules of three another rule of three Is it's always going to be twice as hard take twice as long and cost twice as much as you originally anticipated it taking Yeah, therefore you're never going to make as much as you thought you were going to Very true.

Oh make sure that under reasonable worst case scenario You're not going to lose your business and then the second thing is Try not to sell assets the definition of an asset is something that puts money in your wallet And the definition of a liability is something that takes money out of your wallet And so if you have an asset try to find a way to keep that asset unless you absolutely Need to sell it and borrowing against it is always going to outweigh Selling that asset United States government proves that in their tax code Well said k well, we're gonna close off with that keith. Thank you so much for joining us on this call Your information will be posted below Uh for everyone to get a hold of keith and all that stuff.

Uh, once again, keith Awesome talking with you your up and coming which would be great. Appreciate your time and take everyone will be back soon We'll talk everyone soon. Take care.