May 22, 2025 • 50 mins
Summary
In this episode of the RealPropPro podcast, host Ian Dietler interviews Brett Payton, a seasoned real estate investor specializing in fix and flips in Sacramento, California. Brett shares his journey from various jobs to becoming a full-time real estate investor, emphasizing the importance of mentorship and the evolution of his investment strategies. The conversation delves into the rising trend of Accessory Dwelling Units (ADUs) in California, discussing their benefits in addressing the housing crisis and the challenges of navigating local regulations. Brett also highlights the owner-builder approach, offering insights on cost-saving strategies and the significance of referrals in the construction process. In this conversation, Ian Dietler and his guest discuss the intricacies of building Accessory Dwelling Units (ADUs), the importance of proper funding, utility management, and the significance of teamwork in construction. They also delve into the role of technology and AI in real estate, the mindset required for success in the industry, and how to provide housing through voucher systems. The discussion emphasizes the need for planning, adaptability, and continuous learning in real estate investment.
Takeaways
- Brett Payton specializes in buy, build, and hold strategies.
- Growing up in various states shaped Brett's perspective on life.
- Sales experience helped Brett in his real estate career.
- Mentorship played a crucial role in Brett's transition to real estate.
- Brett's goal was to buy a house and achieve financial stability.
- California is a leader in ADU development.
- ADUs can significantly increase property value and address housing shortages.
- Navigating local regulations for ADUs can be challenging.
- The owner-builder approach can save significant costs in construction.
- Referrals are essential for finding reliable contractors. Make sure you have enough funding.
- Write every single thing down before starting the build.
- Stay three to four steps ahead in the construction process.
- It's important to work as a team with subcontractors.
- Ensure utilities are set up as soon as possible.
- Understand the importance of over-the-counter plans for efficiency.
- You are in control of your own destiny in real estate.
- Creating a good system is essential for success.
- Always be a doer, not just a thinker.
- Invest in learning through resources like books and games.
Chapters00:00 Navigating the Current Real Estate Market00:47 Introduction to RealPropPro and Guest Background03:03 Early Life and Career Journey05:49 Transitioning to Real Estate Investing08:48 The Role of Mentorship in Real Estate11:35 Exploring Buy and Hold vs. Fix and Flip Strategies14:47 The Shift to ADU Developments18:35 Understanding ADUs and Their Benefits19:54 Challenges of Building ADUs in High-End Neighborhoods21:52 The Owner-Builder Approach25:50 Key Considerations for Building an ADU28:39 Site Planning and Utility Connections33:12 Plumbing Challenges and Solutions35:10 Navigating Building Codes and Plans35:37 Understanding Voucher Housing37:14 Real Estate Investor Mindset39:52 The Importance of Systems in Real Estate42:54 Leveraging Technology and AI in Real Estate46:04 The Balance Between AI and Human Experience48:10 Taking Action in Real Estate Investing50:32 New Chapter
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You won't be able to utilize your full potential unless you
go out and try and do it then. And I think going back to what
like how to get started and being a good real estate
investor is like you, no matter what it is, just get out there
and do it. You can take a loss and be OK,
you know, just go and lie to yourself and tell you that you
did really well and do another one right after.
(00:20):
Like it's going to work out. You're going to get better.
But no matter what happens, be adoer.
Do not be just a thinker becauseif you just think, think, think,
think, think, you will never getanything done.
Welcome to the Real Prop Pro podcast, where strategy,
innovation, and wealth converge to redefine real estate
investing. Hello and welcome to the
(00:49):
Realprop Pro Podcast. I'm your host, Ian Detler, fix
and flip investor and entrepreneur.
At Realprop Pro. We teach new and experienced
real estate investors new strategies and how to become
successful in real estate investing.
To learn more, please check out realproppro.com.
(01:12):
Today we have an amazing guest. He does fix and flips in
Sacramento, CA and he's just allaround great guy.
So glad to have him on the show.His name is Brett Payton.
Brett, welcome to the show. Thanks, Ian.
Thanks for having me man. Can you give us a little bit of
bio? What kind of what kind of things
(01:35):
do you specialize in? What's what's your expertise
when it comes to real estate investing?
So what comes to real estate? I mostly focus on buy, build and
hold at this time. I've kind of gone through the
entire gambit which started withpre foreclosures, tax liens,
probates, fix and flip. So I've kind of done a little
bit of everything when you're inreal estate and you're just kind
(01:57):
of coming up through the ranks like you got to you're kind of a
Jack of all trades. But at this point I'm mostly
focused on nicer, cleaner product folks on better areas
and holding, holding the asset for the longer term growth.
So. Wonderful.
Thank you so much for taking thetime to be on the show.
We're so glad that you're here. So glad we get to sit down and
(02:17):
chat a little bit about real estate investing.
Can you take us back to the beginning?
Can you talk about where you're born and raised?
Yeah, so I was originally born in San Jose to my mom and dad.
Nick and Lynn love them. They and then we, when I was
three, we moved to South Carolina, went to a bunch of
different schools when I was younger.
(02:39):
So I had the opportunity to kindof, I guess, always be the new
kid and meet a lot of new people, which is kind of cool.
Born in America, I feel so luckyto be born here.
It's like the best opportunity, whether you're like have a lot
of money, have no money, have middle money.
And it's like, it's kind of coolto be able to like see all the
(03:00):
different levels. So like, you know, when, when we
moved around a lot, we, you know, we didn't have a whole lot
of money, but it's still a great, like it's, it's awesome
to grow up to see the different lifestyles that people have.
You know, like you're exposed to, like, you know, not a lot of
money then, you know, you could get you, you do well and real
(03:21):
estate or whatever job you have.And now you get exposed to
people who had money the entire time and you kind of realize
we're not really that much different.
So it's kind of cool in that scenario.
So but, but yeah, so I moved to South Carolina, I went to a
couple schools there, came back,moved to San Jose, then moved
back to Morgan Hill, moved to Morgan Hill, moved to Missouri,
(03:46):
came back. So there's a bunch of different
and went to school in Texas in my junior year in high school,
then came back to California. So, so again, moved around a lot
and I played football in high school and college and that was
a great, that was a great run atthat time, so.
Yeah, it sounds like you really did get to move around a lot and
get to see a lot of different parts of the country, like you
(04:08):
said. You know, I feel like that kind
of helps you, you know, experience different.
You know, I don't want to say cultures, but I mean, I guess
they kind of are. It's it is, it's definitely
different, like people that are in Missouri have a different
like lifestyle and culture than they do in California.
And when in South Carolina, I was so young.
So it's very, it's kind of hard to like kind of depict on what
(04:32):
people were like when I'm three to seven years old, you know,
but but being in, you know, Missouri and Texas and
California, I mean, I was, you know, I'm developed at that
time. I know what's going on and like
you could definitely see the different characteristics and
culture. And I'll say, I don't think that
I can ever not live in California.
(04:53):
I love it here. But the people in Texas are
special, man. They're real different.
Most of my family's from Texas and I love those.
I love people from Texas, man, They're great.
I've been born and raised here in Sacramento.
I did recently travel to Texas and had a pretty good experience
there. Nice towns, like you said, nice
people. Yeah, I agree.
(05:14):
I think Texas is a cool place tobe.
After you kind of moved around, you kind of settled in
California. What were some of the first jobs
that you were? So the very first job that I had
was in high school. I was a sophomore and it was
just a warehouse job, man. I had a lot of jobs.
I definitely had more jobs than I moved as a kid.
(05:34):
I think I went to 13 different schools as a kid, but definitely
had more jobs. So but you know, I think I, you
kind of got to go through the gambit of like, what do you
like? What do you not like?
What works for you, what doesn't?
And it's kind of, it takes a while to kind of get your
momentum and mojo going of what you really want to do.
So, but sales was always a big job for me.
(05:57):
So after, you know, the high school working at a warehouse,
being a host, being the server, I worked at Lowe's for a little
bit, I did some Superintendent work.
I did a lot of sales and cell phones, which actually really
fun. Like it was great.
It's like you learn how to get rejected, like it's all good,
(06:22):
doesn't matter. So it's like, and it's kind of
like my natural personality. Sales is like it's fun.
It's like I had a good time doing it.
So, but after I graduated high school, played football in
college and then I met a good buddy of mine who got me into a
firefighting. And so I was AII, did my fire
(06:43):
Academy, was an EMT, got hired on at Placer Hills as an intern.
And then after that I had met a guy who took me on his wing.
He's my mentor for a long time, still is.
And he and I ended up doing realestate full time.
So is he the one that kind of got you into real estate?
Had you been looking at it or dabbling in it before and just
(07:04):
kind of in like, well, what's this whole world about?
Yeah, a great question. I actually was, you know, I've
thought about real estate when Iwas younger.
You know, I wanted to buy a house when I was 20 years old.
That was a plan. Like my uncle showed me some
houses in, in Arizona because hehad lived there at the time.
And I, I checked out some housesthere.
But it was a weird time. I think that was in like O6O7
(07:26):
where anybody was getting a loan.
But I was like, oh, this is kindof like you, You can just feel
the market was weird. It was off and I was 20.
I didn't know anything about it.But at the same time, I'm like,
I wanted to buy a house. Like that was my goal the whole
time. And so I ended up not
purchasing. The market crashed.
Nobody could get a job. Like it was hard to get a job
(07:47):
back then. And so I was just doing these
odd jobs like promotional work, like just random things.
And so I ended up saving a bunchof money.
And right after I went to college, I, I was working full
time again, like doing sales ran, I worked at Red Bull.
I did, do you know those Red Bull minis I was handing out Red
Bull that you get paid to like go to parties and stuff.
(08:08):
It was cool. But so I did that, then worked
again, like that was like some of the promotional work I did
and then worked at like a, what's this place called?
I can't remember, Remington International.
We were like headhunters. So we had to find engineers.
So it's like very random work. So but I saved all my money.
I was like hoarding as much money as I could.
(08:28):
And I ended up saying through this, I ended up going to
college to get like. So I got some loans, cashed out
my loans, liquidated my credit cards.
I bought my first house when I was 24.
Yeah. So that was like, that was my
very first portion of real estate where I was like, cool,
I'm going to do this so. Sounds like you met a mentor or
(08:49):
someone that I would assume theywere probably successful in real
estate investing and maybe you saw that and maybe you saw that.
Hey, if this person can do it, maybe I can also get into that
lane. Yeah, I, you know, I just heard
about him. You know, he had done like very
unique deals and kind of got in and like with no money down
scenario. It was like, again, very unique,
(09:09):
like when you don't have money, you were like in your mind,
you're like, there's a way to get here.
I just don't know how to do it right.
And even though I had bought a house, I bought a house and it
was just like, I'm winging it the whole time.
I don't know exactly what I'm doing, but I'm just like, I'm
just going to, I just my whole goal in my mind when I was
younger is like, I just want to buy a house, pay for it and
chill. Because in like if you own a
(09:30):
home, like you don't really haveany other problems, right?
Except for like things that you just create on your own.
But financially, like that's your biggest nut you got to
write a check with every single month, right?
Well, that's what I thought. Now I have kids and that's a
pretty big one too. But like, I'm just saying like
that's like the biggest check you're going to write, right?
Like that's your biggest overhead.
So that was my goal at that time.
(09:50):
I ended up buying another one, another one, another one.
So I ended up with four. And then I had met him and I was
ironically already kind of doingsome creative stuff like seller
financing. I did seller financing on two
other houses and but they were like kind of junky houses, but
it doesn't matter at that time. Like the market was like that
was in 2910, eleven and 12 and Iwas trying to buy a house every
(10:14):
single year. Like that was my goal.
And it ended up working out and the market went straight up.
I got super lucky and well, I think I was 28 or 29 when I met
him. So when I was, I think he was
29. And so that's now it's been 10,
almost 11 years and he's like, he took me under his wing and
said, hey, can you close this deal?
(10:35):
Because I'd met him at a auction.
I met him at a auction and he was like bidding like crazy.
I'm like, dude, I was going to bid on the same properties, but
you way over bid. I'm like, why do you over bet on
that? Like it was like ridiculous.
I ended up randomly seeing him at this place where he had he
had got these deals and I was like, yeah, you just bought this
one and that one. And he was like, like who?
Like get away from me, dude. Like, who are you, right.
(10:57):
Like you don't want to talk to me.
And so. And so I was like, what's your
name? He told me his name.
And I was like, oh, your partners with, you know, my, my,
my friend Seth, like, and he works for you because he had
ironically worked for him because I heard about him.
And I know he was. I didn't know.
He looked like. And so he he's like, yeah, maybe
(11:17):
I don't know, dude. Like, you know him, bro.
I know you know him. And so anyway, I'm like, Hey,
can I get your number? And he gave me his info.
So I gave him a shout or he gaveme his info, but he asked my
buddy about he's like, Hey, who's your buddy Brett, right.
Like this dude is like aggressive, like trying to get
it like just talk to me about whatever.
And so he's like, tell him to give me a call.
(11:38):
So I give him a shout. He's like, hey, I got a deal for
you. And he explains why he, he
purchased this property And I was like, he's like, OK, so I
don't think it's really worth that much money.
But do you know what happens to the funds when they go over the
bid amount? And I'm like, I don't know, goes
to the state. He's like, no, it goes back to
the owner and it's an over bid, right?
(12:01):
So you go and you go and collectthose bids.
He's like, if you can go and sign this guy up to collect it,
the over bid funds, I'll pay 2500 bucks.
And I was like, OK, cool, I'll do that.
No problem. So I go in there, sign him up.
He shows up, signs the paperwork.
He's like, cool, come to the office, I'll give you 2500
bucks. I was like, damn, that was easy.
Like I'll do that all day long, right?
(12:21):
Like that's a layup for me. And I was right.
I was right in the middle of being a firefighter and an
intern for Placer Hills, which is an amazing job.
All my best friends are still like firefighters to this day.
But I was like, I had a decisionto make and I'm like, I think
I'm going to go this route. So that's kind of how I got
started. And I guess the rest is kind of
history, so. Well that's awesome story, thank
(12:41):
you for sharing. I love to hear how people how
their journey kind of takes them, you know, from one place,
you know, a lot of time just kind of just like either
working, going to school, that type of thing.
And then how they get into real estate.
You know, sometimes it's by mistake and sometimes it's just
being in the right rooms at the right time.
(13:03):
So thanks again for sharing thatstory.
So when did you start to do, didyou always do buy fix and holds
or were you doing fix and flips or like wholesaling because you
have the four properties, right?Yeah.
So I kind of always had this goal of like buying and holding.
And again, when I met his name'sDennis, when I met him, he was
(13:24):
like, just sell your properties,man.
Like there's so much other opportunity out there.
And I was like, oh damn, it likemy whole life goal was like
buying and holding, you know, like you just crush my dreams
day one. So I was like, all right, like,
so I started fixing and I, you know, ironically, like I made
more money doing that. But if you really go and look
back at the market, if I just held every single thing, it's a
(13:46):
different scenario. But ironically, you don't really
have as much capital to work with because again, like make
like getting a job back then you're like making money was a
little bit more difficult. Like now everybody's rich,
that's kind of going back down. But like by at one point, like
not a lot of people had money tobuy houses.
So you had to get in there like in a very like creative way.
Like again, like the pre foreclosures, the tax liens, the
(14:09):
probates, all that kind of stuffwas like you can get in with a
little bit amount of money and your upside was way high.
So that's where I kind of got started and it was able to kind
of like snowball effect. And some of them I held, some of
them I didn't hold. And then after that I kind of
slowly started moving into like the the Adu builds and the Adu
builds was a real like pivot. And I didn't, I was like, wow,
(14:32):
man, I've got like, I think maybe I had like 15 properties
at that time, maybe 20 properties, which was like not
like some crazy amount. I'm like, well, if I had units
on each one of these, like now Igot 60 units, right?
And I'm like, that's pretty goodmoney.
I'm like, yeah, I'm going to getrich.
So but learning that is hard. It's not like when you're trying
(14:54):
to learn how to build and you don't have a system.
It's like it's nails on a chalkboard and you're like mad
at everybody. But really you can only be mad
at yourself. So, but it was a that was kind
of like the the biggest pivot from fixing, buying, fixing,
selling to like buying, fixing and holding.
Now, what was your market? Was that mostly like Sacramento?
(15:16):
Was it California? What?
What market area? Mostly all tags, so Sacramento,
Roseville, Citrus Heights, Elk Grove.
I just mostly stay in all the the surrounding areas.
I've gone out of state. So I have a small portfolio in
Reno and then another small portfolio in Ohio.
So OK. When would you say that you kind
of got into AD US because they haven't been around that long in
(15:40):
in California. I mean, I feel like, would you
agree that California is kind oflike the leader and the kind of
pioneer? Oh, they're absolutely the
leader in it. Absolutely.
They, I haven't tried to build outside of the state of AD us.
And maybe it's like my guess is maybe it's easier in some areas
and way harder in others, but it's like it's kind of common
sense to build AD us like we should have had this a long time
(16:03):
ago. But in 2019 as well, I bought my
built my first Adu. So I'm the I think I was like
the first one to apply to get myAdu in Placer County and I was
the first one to apply and get approved for 2AD USADU&AJADU in
Placer County. It was a really the first one
was easy. I was like, how is it great?
(16:24):
I do this all day, but the second one when you try and add
the other unit, that's when it became a lot more difficult and
you have to navigate through everybody to get there.
So but yeah, they but Californiais definitely like change the
game on on adding the units for sure.
So. In the beginning, I mean not
only are you trying to navigate it, but I mean these counties
(16:46):
are trying to figure. Out what's going on.
A lot of times you end up teaching them what they're, what
you can and can't do. And some municipalities are
great to work with and some of them are, you know, they know it
all. So it's like it's kind of it's,
it's a give and go. That's the building department.
If anybody's ever built, they know what it's like to work with
(17:07):
the building department. And it's never a fun, easy
layup, but sometimes it's betterthan others, right?
So, and the more I know and I and also the more they know, it
just becomes much more of a, it's like more of a, it's more
of a team game in some ways sometimes.
(17:28):
Sometimes there's always exceptions.
Yeah. So let's let's do a little bit
of a deep dive into AD US. For the listeners who maybe
haven't heard about AD US, can you kind of give a really brief
overview of what they are and how they work?
Yeah. So Adu is basically a how like a
(17:49):
unit that's in behind or on the side it's, it's, it's an
accessory dwelling unit. So it's another unit that's on
the property. So let's say you have a house in
the front, you can add another Adu accessory dwelling unit on
the back. In some municipalities you can
add 2AD US and some you can add a JADU up to which is up to 500
square feet and an Adu in the back up to 1200 square feet,
(18:13):
depending on what the municipality is.
The state code will supersede any municipality that's in the
area in the in California. So if there's any pushback that
you get from whatever municipality or city that you're
in, if you can cite the state code and show them, then you'll
be able to get approved with what you want to do.
(18:35):
It seems like the benefit to this is kind of like you said,
like if you just had a single family home on a property that
has a certain value. And then if you can add like a
whole nother unit, you know, even if it's a smaller unit that
could add so much value to it. And not only that, it it, it's
kind of addressing the the housing crisis that we currently
(18:58):
have in California. So like you said, it's kind of a
no brainer to be able to build these things, increase value and
increase rental or just increasethe units for people to live in.
Can you kind of talk about the benefits of it to both the state
and the residents of of California?
Yeah. I think it's, I think it's
(19:19):
definitely a benefit because you're able to utilize the
current land that we already have.
And it's been, it's been helpfulin a lot of ways for me to be
able to grow just my rental portfolio.
And it also I focus a lot on voucher housing.
So it's really the exact thing that we are kind of looking for.
(19:41):
It's really a game changer in a lot of ways because it's like,
instead of just selling watermelons, you're selling like
15 slices of watermelons, right?So you have like all these extra
units that you can add. And the cool thing is, is now
with the new laws that it's not just adding like 1 or 280 use,
you can add more. And I know in some areas that's
going to be accepted and in other areas it's going to be
(20:02):
very difficult. Like you're going to get a lot
of pushback from the neighbors. That's kind of a catch 22 in
some ways. That's a fine line you have to
walk. Like if you're in a very like
upper end neighborhood and all of a sudden you decide you want
to put 10AD us in there. Like I get it, you're going to
solve the housing crisis and where do you draw the line,
right? Like it's a very difficult like
(20:23):
conversation to have. And if you're being objective as
you possibly can, there's two, Iguess there's two ways to split
it. It's like obviously like this is
a very nice neighborhood, right?Do you want to put 1080, who's
here? Do you want to turn this into an
apartment complex with these houses that are $2,000,000 plus
in Sacramento? They that'd be the same thing as
(20:44):
like doing a $4 million plus in like La Jolla or something,
right? Like the neighbors aren't going
to like that. It's going to be a thing.
Does it address a scenario? Of course.
But there's not a lot of land there anyway.
So it's not that big of a deal. But now with the new laws like
you can add a lot more units. So in some of these nicer areas
have a lot of land. So it's kind of an interesting,
(21:05):
it's an interesting scenario that people will end up running
into. I know that's not what this
topic is about, but no, that's. That's totally great.
You know, it's something that not a lot of people think about,
right? Yeah, because, because a lot of
times real estate investors, we're looking at dollars, we're
looking at units, we're looking at more like concrete stuff,
right? You know, one of the things I
(21:26):
learned early on is try to get emotions out of decision makings
for real estate investors, right?
So say that to your neighbors though.
That's what I was going to say. So we look at it from 1 lens,
but the neighbors, like you said, they live there, that's
their home. They are emotional about it and
the things that happened in their neighborhood effects them.
And so you're right, you do haveto tote the line of, you know,
(21:52):
what's good for the state, what's good for us as investors,
but also what's good for the neighborhood, what's good for
the the people right next to youthat have to look at, you know,
these units and maybe they don'tthink they're attractive, maybe
they don't blend in. You know, it's all these
factors. It's definitely happens.
I have a good buddy. He also a mentor of mine with
Dennis. His name's Colin shell out to
Colin, but he just had the same scenario like he's it's a house
(22:13):
and 280 use, which you buy rightby state have that and the
neighbors made a huge deal aboutit.
So it's like just that just thatlike uphill battle sucks and
it's like I know that Californiais doing it for the, you know,
to get more units, but the pushback that you get is still
like it's still not easy. Not everybody can build AD us
like like no big deal. Like you definitely have to work
(22:35):
through a lot of problems and issues and you have to be able
to weather the storm. So I have a couple of buddies
that that have helped build AD us and it's like, as long as you
have knowledge of what you're doing, it makes it a lot easier.
So I would definitely recommend if you're going to build an Adu
and you want to do it on the cheap, find someone that's done
(22:56):
it before you can. Also, you can hire a contractor,
but you're just going to pay forthat.
No matter how you shake it, you're going to pay for it.
But if you want to learn, do it on your own.
Don't have somebody else build it.
Have a like hire a consultant, have a higher Subs like work
with someone you know that's done it before and it's going to
be work, but it will you will get a lot out of it.
(23:17):
It'll change your projection of where you go in your real
estate, a career. OK.
I have a lot of questions along that line, but I'll start with
there's something called the owner builder.
And can you talk about, you know, if you are trying to do it
yourself, you are trying to hireSubs, you're trying to, you
know, kind of get some of the work done.
Can you talk about what an ownerbuilder is and like kind of the
(23:40):
benefits you have to being an owner builder instead of like an
investor? Yeah, totally.
The the owner builder, that's generally what I do and I go and
I find I not hire out Subs. So you're generally looking at
like 17 to 20 Subs that you're going to end up hiring as
opposed to one contractor. So the one contractor is in
charge of all these Subs and youjust pay the contractor.
(24:01):
But when you go and hire out your own Subs, those you're
going to have to pay each one ofthose Subs, they all have to
work together. So now you're the glue that
makes it all happen, right? Which you're going to save.
I would say you'd probably save at least 50%.
So instead of you, well, really almost 100%.
So let's say you build, let's say you a contractor will help
(24:21):
you will a contractor will have will build a property for you at
300K, right? Let's say it's 1200 square feet,
300 K. You can probably get that bill
done for probably about 150 K. Now everybody's like that's
crazy. This guy's nut.
He's an idiot. Like I've heard of all these
things like I don't care. Like we you can build between
probably 100 to 120 to like maybe 150 bucks a foot.
(24:46):
This is a very like vanilla bill.
This is not like some over like imported from Italy granite or
courts or whatever. It is like this is just like a
builder grade regular place and you can get it done for sure.
It's not a question, but you have to be diligent with a Subs
you hireright, and they also have to be good.
You have to know what they're doing.
(25:07):
Anytime you're you have like a kink in the chain.
The best part about building is you're like, why did this take
so long? Oh, my concrete guy, Oh my
stucco guy took forever. Oh my roofer, you know, like all
these things, you know exactly what it is.
So you know how good your guys are and are.
And I would say if you want to get those kind of guys, get
(25:30):
referrals. Referrals are the absolute best.
So if you get a good referral from someone, utilize them and
just say, oh, you're a sheetrockguy.
Oh, cool. Like I need a painter.
Oh, yeah, my buddy does. Sometimes they're good and
sometimes they're bad. But it all comes into, does it
work in your price range? Are they good at what they do?
(25:51):
Are they fast? Are they efficient?
Are they like begging for money right now?
Like it all becomes like a thingwhere like, which you don't know
that until you start building. But once you get into that
rhythm, you're just like, oh, like, this is cool.
This is not bad at all. There is like a rhythm and you
kind of get used to things as you go.
It is very hard getting started though.
(26:11):
Do you have any advice for people that are maybe looking at
building an Adu on their own property?
I mean, you'd talked about doingthe owner builder route as far
as getting permits and stuff approved and then managing
yourself as well. Do you have any other advice for
someone who's just getting started or like kind of maybe in
(26:32):
the preliminary steps of kind ofevaluating if this is something
that's for them? Yeah, that's a great question.
I would say a couple things are,one is make sure you have enough
funding, right? So if you think the bill is
going to be 120 to 150, get 170 just in case.
That way if you do build it for 120, you get an extra 50K that
you get to keep, right? Like that's what you want to
(26:54):
have. The second thing, so funding is
always a thing. Make sure your rate is good.
Make sure it's not just like if you're a seasoned builder and
you've done it for a long time, you can get that short term
income like or you can get that short term loan, the bridge loan
or private money loan, whatever you want to call it.
You can go ahead and get that. No big deal.
If you're a brand new to building, you want to get real
(27:18):
debt like you want to get a HELOC that you're not going to
have to pay back right away. You want to get a fixed 30 year
debt on your build, right? So let's say it's going to be
120. You borrow the 150 or 170,
whatever it is, and then now yougo and you have to write every
single thing down, Write it all out, every single step before
(27:38):
you even start the build. This is before you start the
build is act as if you're starting right now, today.
What's the next step you're going to have to do to get this
build started? What am I going to need?
I need to make sure that my utilities utilities always a
number one thing. Everybody makes mistakes on not
getting their utilities on fast enough.
(27:59):
PG&E will take forever. SMUD much better, but they'll
take forever like any utility company like get your utilities
going ASAP. Stay on the phone, don't be
afraid to call, don't be afraid to ask questions so and get your
Subs in line. Your Subs are going to have to
work with each other, your concrete foundation dugout,
(28:19):
they're going to trench all yourlines.
You're going to have your plumber and your electrician run
your lines. Whatever you need to have ran
first. You're going to need to also
have them work with your framer because your framers going to
come out and be like, ah, these hold these hold downs are in the
wrong place, right? Or this is in the wrong place.
Look at the plans, have them work together.
It's a team. The best thing about working
(28:40):
with the different Subs is you learn how to manage A-Team and
you get to work with them. They don't work for you.
That's the other thing. Like even though you write the
checks, the one thing I'll say is it it's a team game.
When you have someone that wantsto give you all the pushback,
it's like they're not the ones if they're trying to help you
and be like Brett, like you're wrong.
Like that happens all the time. I'm like, all right, OK, like
(29:03):
what am I doing? Like, what do we need to do to
make this better? Right?
Like have people that are on your team, not that are like on
another team just trying to get themselves a win, if that makes
any sense. So but once you write everything
down, you have all your Subs there, they work together and
you just you should go from there.
It's the other major thing I'll say if you're going to run your
own job is you always have to stay three to four steps ahead
(29:26):
of where you're going to be next.
So you dug out your foundation, you framed it out.
They're going to put in there, they're going to put in their
crush rock. They're going to get ready to
pour. You already need to be calling
up your you already have to havethe take offs for the framer.
You already have to have hay, the roof and the windows or
should be ordered as soon as that lumber is dropped and you
(29:46):
want to make sure. Also this kind of goes back to
the very beginning is have your windows standard size windows.
You don't need to have 53 1/2 by31 1/2 windows.
Like no dude just do 36 by 48 orwhatever it is so you have
egress and it's easy. If it breaks, no problem I'm
just going to replace it. Make it very simple.
(30:07):
So yeah, I don't know if I'm going on too long of a run.
For you, I was going to ask moreabout it.
Yeah, like some of the other things I can think of is like
getting prefabbed countertops, you know?
Yeah. So the granite guy has that so
that when the the granite guys come in there.
So once you have that's not moreyour finished work, right.
And so you have your cabinet guys or your cabinet guys going
(30:28):
to go put everything in there. And again, standard cabinets,
right don't do anything. Easy.
I have some great places that you can go like they're, they're
great. They they're fast, they're
efficient. They're going to tell you how up
and down your plan is not going to work unless they do it their
way. And they're right, they're
right. Just listen to them.
So it's like they they make it happen, dude, and they're
they're good. So it's kind of interesting to
(30:51):
to like, but once you get done, you're like, Oh, there's no
project that I've done that I haven't learned something new
one. So you're always going to learn
something a little bit new and a, I've had other people run
jobs and it's good, but it's like, it's hard for me to not be
like, you could have done that better and cheaper, but it's
like you got to kind of step back eventually.
Like if you're starting to builda whole lot, you have to hire
(31:13):
someone out and they're not going to do it as good as you
are. They're just not.
You can only do as so much as asyou can to like train them, but
at the same time like they're going to do them and they're
going to do it their way. And it doesn't it's not bad,
it's just different, right? So you just kind of got a once
you have a lot of builds going, you got to let them kind of take
the reins. But in the very beginning, build
(31:34):
as many as you can on your own. So you know the exact system.
You don't have any question marks, but get started right
away. Like don't weigh like just
build. And kind of going back to the
beginning when you're kind of planning something that I've
been told a few different times is really understanding how your
utilities are going to hook up. I think you'd already talked
(31:55):
about electricity, how that's going to tie in, but also how
the plumbing ties in, right? So like, so like knowing where
you have to tie in and how much slope it needs.
Totally. It's really important.
So can you kind of talk about that as far as like site
planning and and figuring out where stuff?
Great question. So now what they don't want is
(32:17):
like, let's say your Adu is in the back of the home.
They don't want you to connect to the back of the home because
if because of the way that if you get a clog, if there's a
clog up front, now you have a clog in the back.
So what they want you to do is they wanted you to run your line
to the very front of the house that they want you to trench all
the way around the house or to the side, however it is, and
then you hook up in the front there, right?
(32:39):
So that's your first scenario that you have to be aware of.
But that's mostly, most of the time that's going to be on the
plans that you'll have in your engineer, your draftsman.
You don't need an engineer for these.
You need a draftsman. And their draftsman are cheaper
and sometimes they're faster andeasier to get a hold of, but
sometimes the other way. So just depends on what you got.
I would say that's your very first portion of where Well, the
(33:03):
very first part is can you build?
But second of all is like your draftsman, it's going to build
it for you. How fast and how much right are
they going to go through the redline process on there with you
for the corrections like make sure you get through that
process. So because everything else is
predicated on that bill, on thatdesign.
So, but back to your question, so with the slope, if you don't
(33:23):
have the slope, you have to havewhat's called a sewage ejection
pump. So it's a sewage ejection pump
is not ideal. Usually they'll have those and
like if you have a bathroom in the basement or something.
But The thing is, the issue is, is when it comes to that
tenants, I swear they love, loveto use wet wipes.
It's like wet wipes. Like why?
(33:45):
Like I never used wet wipes everin my entire life until I had
kids, right? But then not everybody has kids
for some reason. They always have wet wipes and
I'm like, OK, whatever. So the issue is those get
clogged. You have to have your plumber go
out there. So make sure whoever installs
that knows to get you a very good motor, something that's not
going to get eat up. And if it does have any issues,
(34:05):
are they going to come back and are they going to fix that that
motor or the issues that the tenants are going to great.
Obviously it's not the plumber'sfault.
It doesn't it doesn't go on the plumber, but are they going to
be able to come in there, fix the problem, change it out and
move on because they're going toyou're going to have an issue at
one time or another. It doesn't matter if it's like
high end or low end or expensiveor or not expensive, you're
(34:27):
going to have an issue do. You ever kind of leave access to
that portion so that if something does happen, it's
easier to get? To yeah, you have to have access
anyway so like in general like you have to have like I mean you
put there's a lid on there and it looks nice and pretty the the
building department will tell you kind of what you need to do
on there so. Speaking of building department,
there's some over the counter plans that people can use.
(34:51):
Can you talk a little bit about how that works and?
Those are great. Yeah.
So the over the counter is a lotmore efficient and faster.
You're still going to have to have a like a, it's called a
line diagram of where your electrical is going to go.
Because even if you're in the, if you're in the front of the
house, you're, it's like, where is it going to go?
It's going to go here, OK, are you going to have two meters?
Are you going to tie into the front house?
(35:12):
So there's still, there's still a level of knowledge that you
have to have to get through thatprocess.
And again, like I would hire a draftsman for that or I would
call them, have a relationship with this city.
And then if they're like, you have to have a draftsman draw it
out, then get on the phone and get on your Facebook market
groups or Facebook groups and say, hey, is there a draftsman
that someone recommend will be like Michael Murray, Jason
(35:35):
Whitman, blah, blah, blah, blah,blah, all these.
People. Yeah, they'll just have
everybody on there, right? And it's like you'll get
somebody out of it. So if you want to get it done
like you're going to get it doneone way or another.
A little bit earlier in our conversation, you talked about
people with voucher systems and how you're trying to provide
housing for them. Can you explain what that is and
(35:56):
and and how you're accomplishingthat goal of providing units for
people like that? So we do a lot of voucher
housing, which is basically Section 8.
We focus on veterans, battered women, people would like single
moms with kids, which is not just them.
It's just like happens to be like they're on the vouchers.
And if they don't have to be vouchers to get into the, to get
(36:18):
into the houses, we have market rate tenants as well as as
vouchers. But we do have relationships
with some of the, with the counties with that have voucher
housing. And so they will say, hey, we
have, you know, I don't know Leah that wants a place and you
know, she's looking for a 2 bedroom.
(36:38):
And So what you do is in that zip code there's called what's
called a Section 8 payment standard.
And that Section 8 payment standard will say that for the,
you know, 95833 zip code, they're going to pay 20 $600 a
month for a two-bedroom, 1 bath.So we build 2 bedroom, 1 bath.
They have someone and Leah's like, yes, I'm I'm happy.
(36:59):
Like they're full voucher or maybe they pay, maybe they pay
20% of that. So you know, they get a, they,
we still do the application process.
They still have to get approved and then we put them in there.
Sounds like a really cool way tokind of give back to the
community and like help some people that are less fortunate
and or you know, maybe going through a tough situation or
(37:20):
something like that. So it's really nice that you
guys focus on those types of people and helping them get out
of a bad situation. So that's really great.
Another thing we like to talk about on the show is real estate
investor mindset, right? So we like to discuss with our
guests like what are some of thethings that they recommend to
(37:42):
either new real estate investorsor seasoned real estate
investors and basically like what's the mindset needed to be
successful and, and stay consistent and have, you know, a
long career, long successful career at real estate and
investing. The most important thing, it's
(38:03):
not really just in real estate, it's it's in life is like it's
your own fault. So if you're really successful,
that's your fault. If you're not successful, that's
also your fault. There's a book that I've that I
listened to. It really changed my entire like
projection of my life was it's called your wishes, your command
by Kevin Trudeau and it was it was a major there's a book
(38:25):
called the secret and then there's the wish.
There's your wish is your command, which is like the
secret on steroids. And it's like truly based on
anything you do is your own fault.
So if I do really well, again, my fault bad your fault.
So I think when people start to understand that they are in
control of their own destiny in the real estate game or selling
(38:49):
cars or writing a book, like that's what makes people the
most successful. So and I think having a plan is
also super important and a good team around you.
So people that take a lot of credit for the things that they
do is wild to me because I'm like, there's no way you're
getting here by yourself. I think that's a big red flag
(39:09):
when you see people are like I did all by myself, yes, you did
any again, if it's your fault, if you're there, it's your fault
and you are the one who should be able to reap the benefits.
If it's not, but at the same time you didn't do it by
yourself. You have usually you have a lot
of great people around you, which is 100% true.
You are you're as good as your contractors, you're as good as
(39:30):
your wholesalers, you're as goodas your lender.
You're as good as your title company, right?
You're as good as like the guy who told you about the deal,
right? Like The Who taught you the
ways. So it's like everybody is a
team, no matter what it is, It'slike it's a team.
Now you might be the captain of your team and you were the one
that kind of makes it happen, but at the same time, they're
the captain of their teams too. And they got you the deal.
(39:53):
So it's like understanding that it's a total ecosystem where
everybody wins and it's it's. It's really important to have
those things. Yeah, that's really important.
And I heard you mention earlier about systems, it seems like it
seems like you're big on systemsand setting stuff up to be
(40:14):
repeatable. Can you kind of talk about that
a little bit? Yeah, I would say early in my
career I was and I'm always working on my system.
It's I don't have it perfected. I'm always trying to get better,
but like early in my career it'sI would get a phone call.
This is like when I first started having my own rentals
and they have a plumbing issue. I'd be like, F that dude.
(40:35):
Like dude, fix it. Just go fix it.
And the reason why is because I don't have a good plumber to go
out there and fix the deal, right?
Like if I have a good plumber and they're going to go fix it,
I don't care. I'm like here, call Victor.
Boom, Victor. And he's like, yeah, I got it no
problem like that's his job he'sreally good at it I've worked
with him for a long time and he goes out and he bangs it out.
So having a good person to go dothe project is not an issue.
(40:59):
So that's part of like the system and the Rolodex that you
create. The longer you're in the game,
the better you get at your job. And if you do not create a
system and you don't create a Rolodex to put the right people
in the right places, you will not be able to succeed.
The same like the people. The, the guy I always think
about is Elon Musk. That guy's like like a systems
(41:22):
master, like the most successfulpeople.
And it can be anybody who's likesuper wealthy or very
successful. It's like they created the
absolute best system. So it's like you can't lose with
a good system. And then you just have to find
the right people to put the people put to put them in that
position to succeed. And if it doesn't work, it's
(41:44):
just like building a house. It's the building a house is a
system. And you got the 17 sub and
you're like, oh, this one didn'twork.
Change him out, get a new guy inthere.
And now my system is back to building a house, right.
So it's like everything is predicated on a good system.
And if you have that, it's, it'sdifficult to lose, especially if
(42:06):
you're like really walking through the steps and like
trying to make everything better.
Then obviously you like you as areal estate investors, a huge
like the only one that's going to drive your ship is you.
So you going to get the best deal, like you can have the best
system in the world and you buy a bad deal, like who cares?
Like you blew it because you didn't find a good deal.
(42:28):
Like you're going to, you're going to make money or lose
money when you buy that, buy thehouse, right?
Like you might be able to like weather the storm if you keep it
for 10 years, but that's a loss,you know, like, so, so being
able to like you as the, again, as the investor, you're the
captain of the ship. But at the same time, like if
your team is running it well anddoing their job, you're winning.
(42:52):
And you are the one that is directing them to go to the
right places. And if you buy a bad deal,
again, that's on you. That's not their fault.
So yeah. Great advice.
Are you using any type of technology to kind of get some
of maybe some of the systems on your end dialed in?
(43:12):
I'm really starting to focus a lot more on AI and trying to
figure out how I can use that inmy business.
Are you taking any steps or or trying out anything new as far
as automations or AI? Great question.
I'm not there yet. I use the software for my my
rental portfolio. But when you use it has been
successful for you. Maybe it'll jog my memory.
(43:34):
I mean, you know, some of the software I use for real estate
investing, not necessarily AI inspired, but I use property
radar to kind of find deals and analyze deals.
I just got signed up with a short term rental company called
Air DNA and they kind of help run comps on short term rentals
(43:56):
as I'm trying to get into that market a little bit.
You know, obviously there's CRMStrying to tap in a little bit on
a software called Go High Level.I don't know if you're familiar
with that, but that's a pretty complex system that takes a long
time to figure out how to use. But as far as AAI, I'm not
really using anything. I'm trying to figure out how
(44:18):
chat bots work a little bit, tryto figure out how to get maybe
some inbound text messages replied to, maybe a little bit
of outbound if. Like figure out if people are
interested in the cell and if they are, set an appointment
with me. So I'm in the very early stages
of trying to figure this stuff. Out.
(44:38):
So I was just kind of wondering and see if it's something that
it's kind of on your radar. Yeah, it definitely is.
Like I've there's some things that I've started to look up a
little bit more in depth with ChatGPT.
We're looking up codes on is this a code that I can work
around? Is this zoning?
Like what can I do here via the zoning that it's already zoned
(44:58):
without having to go through a secret process or whatever the
case is. So there's definitely things
that I would recommend with ChatGPT is like ask ChatGPT be
good at asking the questions. Sometimes they're right,
sometimes they're wrong. But like chat GPS ChatGPT or
like, you know, the AI software,it's a game changer.
So like they have all the answers in a lot of ways, you
(45:22):
know, so. It kind of blows your mind, too,
as you're doing it. And you're just like, typing in
prompts, you know? And once you refine your prompts
and figure out how to, you know,ask it better questions and
stuff like that, you start to see all this, like, incredible
information just coming in. And you're like, wow, yeah.
I don't think. Yeah, there's like, there's no
(45:43):
excuse to not have the knowledgeto do something at this point.
And that's like, I mean, Google is already pretty good, but
Chachi, he's just like. Yeah, we grew up on Google and
we had YouTube, right? So to learn from YouTube
University and now it's like. Any questions you have about AD
us or you know, like our laws orwhat you can and can't do, like
(46:06):
start there, swing the bat, likejust go and take a look.
And that's that's a big game changer.
So I, I kind of think it's a, a fine line though, as far as
using AI and then kind of something you mentioned earlier,
leveraging the knowledge of other people that have done it
right. So, so that, so to me, there's
always this man versus machine, you know, battle, right?
(46:30):
Like, do we, you know, let AI kind of help figure out how to
do this stuff? Or maybe it's better to have
another human who has the actualexperiences done 100 AD us, you
know, so I feel like there's youkind of have to tote the line
there. Like some things would be like
AI, but other things you're justreally going to learn from
someone who's done. It yeah.
(46:51):
And you know, what's interestingis when you learn from someone
else that does it like, and you have like a consultant or a
mentor or whatever it is, you don't end up you kind of work in
the beginning when I met my mentor was like I was working
for him. But really in the end, like we
work together and you learn so much from him and he but he's if
you have the right one, you're going to learn from you at the
(47:12):
same time, right? You're not just it's not a one
way St. And you know, whether it's in
real estate or looks or whateverit is, it's your spaceships.
It doesn't matter. It's like you're going to learn
from them and it's like the right person is going to have an
open mind and thought process where you're going to be able to
teach them. Like the younger generation is
(47:33):
like, dude, hey bro, have you seen this?
Yeah, I'm like, no, right on my own.
That's cool. Right.
Exactly. So it's like there's so much
information out there. And the young ones are the ones
that are like in the middle of it.
They're like they're used to it.Like the guy who does my, he
does my Instagram, his name is Logan.
And that dude is a beast. Like that dude can put
(47:56):
everything together and I'm like, he just knows so much.
It's awesome. It's cool to see, but you know,
he'll learn at the same time. Like so again, like the right
people around you will just share different ideas and you
can really grow a lot from that,especially if you're a doer.
If you're just a like, let me think about it like that's fine,
but you're not going to really get far in the sense of like
(48:16):
what you're doing in the in likeyour actual potential unless you
go out and try and do it then. And I think going back to what
like how to get started and being a good real estate
investor is like you, no matter what it is, just get out there
and do it. You can take a loss and be OK.
You know, just go and lie to yourself and tell you that you
did really well and do another one right after.
(48:38):
Like it's going to work out. You're going to get better.
But no matter what happens, be adoer.
Do not be just a thinker, because if you just think,
think, think, think, think, you will never get anything done.
Go and do it. Find the right guy.
Run your own numbers. Like, OK, I'm buying it at 300.
It says it's worth 450 right nowin today's market.
Worst case scenario, if I sell it for 400 and it's a $40,000
(49:01):
rehab, I'm going to make 30K right after commissions, holding
costs, all the rest of it. But you will never know that,
you know? And guess what?
If the market goes up, you're even better.
Yeah, right. So swing the bat and make it
happen. That's great advice.
Thank you so much for coming on the show kind of talking about
some of the Adu stuff, some of the buy, fix and hold strategies
(49:23):
that you're using. So every week on the show, we do
a free book giveaway and for ourlisteners to enter, all you need
to do is like and comment which book you have here.
So for the listeners, we have Rich Dad, Poor Dad, cash flow
quadrant 10X, Roll E, myth, Simon, Sinek eaters, eat Last,
(49:45):
we have go giver. So do any of these books stand
out to you? Yeah, so there's 2 So I like
outliers. That was a great book.
And then cash flow, I mean, we should have poured out if you
guys ever not have not done anything in real estate, read
the first book. It's great.
And there's also a game called cash flow and that'll definitely
have your mind thinking about stuff differently.
It'll you'll be, you'll realize like, oh whoa, like you need to
(50:08):
buy a business, You need to buy a buy and hold.
Like it'll change your thought process dramatically.
It's a game. It's literally called cash
flows. Board game called cash flow,
similar to Monopoly, but you actually learn how to totally
become an entrepreneur and how to create assets is obviously
the main thing. All right.
Well, thank you for coming on the show and we'll catch you
(50:31):
guys next time. Thank you, Ian.
You won't be able to utilize your full potential unless you
go out and try and do it then. And I think going back to what
like how to get started and being a good real estate
investor is like you, no matter what it is, just get out there
and do it. You can take a loss and be OK,
you know, just go and lie to yourself and tell you that you
did really well and do another one right after.
(00:20):
Like it's going to work out. You're going to get better.
But no matter what happens, be adoer.
Do not be just a thinker becauseif you just think, think, think,
think, think, you will never getanything done.
Welcome to the Real Prop Pro podcast, where strategy,
innovation, and wealth converge to redefine real estate
investing. Hello and welcome to the
(00:49):
Realprop Pro Podcast. I'm your host, Ian Detler, fix
and flip investor and entrepreneur.
At Realprop Pro. We teach new and experienced
real estate investors new strategies and how to become
successful in real estate investing.
To learn more, please check out realproppro.com.
(01:12):
Today we have an amazing guest. He does fix and flips in
Sacramento, CA and he's just allaround great guy.
So glad to have him on the show.His name is Brett Payton.
Brett, welcome to the show. Thanks, Ian.
Thanks for having me man. Can you give us a little bit of
bio? What kind of what kind of things
(01:35):
do you specialize in? What's what's your expertise
when it comes to real estate investing?
So what comes to real estate? I mostly focus on buy, build and
hold at this time. I've kind of gone through the
entire gambit which started withpre foreclosures, tax liens,
probates, fix and flip. So I've kind of done a little
bit of everything when you're inreal estate and you're just kind
(01:57):
of coming up through the ranks like you got to you're kind of a
Jack of all trades. But at this point I'm mostly
focused on nicer, cleaner product folks on better areas
and holding, holding the asset for the longer term growth.
So. Wonderful.
Thank you so much for taking thetime to be on the show.
We're so glad that you're here. So glad we get to sit down and
(02:17):
chat a little bit about real estate investing.
Can you take us back to the beginning?
Can you talk about where you're born and raised?
Yeah, so I was originally born in San Jose to my mom and dad.
Nick and Lynn love them. They and then we, when I was
three, we moved to South Carolina, went to a bunch of
different schools when I was younger.
(02:39):
So I had the opportunity to kindof, I guess, always be the new
kid and meet a lot of new people, which is kind of cool.
Born in America, I feel so luckyto be born here.
It's like the best opportunity, whether you're like have a lot
of money, have no money, have middle money.
And it's like, it's kind of coolto be able to like see all the
(03:00):
different levels. So like, you know, when, when we
moved around a lot, we, you know, we didn't have a whole lot
of money, but it's still a great, like it's, it's awesome
to grow up to see the different lifestyles that people have.
You know, like you're exposed to, like, you know, not a lot of
money then, you know, you could get you, you do well and real
(03:21):
estate or whatever job you have.And now you get exposed to
people who had money the entire time and you kind of realize
we're not really that much different.
So it's kind of cool in that scenario.
So but, but yeah, so I moved to South Carolina, I went to a
couple schools there, came back,moved to San Jose, then moved
back to Morgan Hill, moved to Morgan Hill, moved to Missouri,
(03:46):
came back. So there's a bunch of different
and went to school in Texas in my junior year in high school,
then came back to California. So, so again, moved around a lot
and I played football in high school and college and that was
a great, that was a great run atthat time, so.
Yeah, it sounds like you really did get to move around a lot and
get to see a lot of different parts of the country, like you
(04:08):
said. You know, I feel like that kind
of helps you, you know, experience different.
You know, I don't want to say cultures, but I mean, I guess
they kind of are. It's it is, it's definitely
different, like people that are in Missouri have a different
like lifestyle and culture than they do in California.
And when in South Carolina, I was so young.
So it's very, it's kind of hard to like kind of depict on what
(04:32):
people were like when I'm three to seven years old, you know,
but but being in, you know, Missouri and Texas and
California, I mean, I was, you know, I'm developed at that
time. I know what's going on and like
you could definitely see the different characteristics and
culture. And I'll say, I don't think that
I can ever not live in California.
(04:53):
I love it here. But the people in Texas are
special, man. They're real different.
Most of my family's from Texas and I love those.
I love people from Texas, man, They're great.
I've been born and raised here in Sacramento.
I did recently travel to Texas and had a pretty good experience
there. Nice towns, like you said, nice
people. Yeah, I agree.
(05:14):
I think Texas is a cool place tobe.
After you kind of moved around, you kind of settled in
California. What were some of the first jobs
that you were? So the very first job that I had
was in high school. I was a sophomore and it was
just a warehouse job, man. I had a lot of jobs.
I definitely had more jobs than I moved as a kid.
(05:34):
I think I went to 13 different schools as a kid, but definitely
had more jobs. So but you know, I think I, you
kind of got to go through the gambit of like, what do you
like? What do you not like?
What works for you, what doesn't?
And it's kind of, it takes a while to kind of get your
momentum and mojo going of what you really want to do.
So, but sales was always a big job for me.
(05:57):
So after, you know, the high school working at a warehouse,
being a host, being the server, I worked at Lowe's for a little
bit, I did some Superintendent work.
I did a lot of sales and cell phones, which actually really
fun. Like it was great.
It's like you learn how to get rejected, like it's all good,
(06:22):
doesn't matter. So it's like, and it's kind of
like my natural personality. Sales is like it's fun.
It's like I had a good time doing it.
So, but after I graduated high school, played football in
college and then I met a good buddy of mine who got me into a
firefighting. And so I was AII, did my fire
(06:43):
Academy, was an EMT, got hired on at Placer Hills as an intern.
And then after that I had met a guy who took me on his wing.
He's my mentor for a long time, still is.
And he and I ended up doing realestate full time.
So is he the one that kind of got you into real estate?
Had you been looking at it or dabbling in it before and just
(07:04):
kind of in like, well, what's this whole world about?
Yeah, a great question. I actually was, you know, I've
thought about real estate when Iwas younger.
You know, I wanted to buy a house when I was 20 years old.
That was a plan. Like my uncle showed me some
houses in, in Arizona because hehad lived there at the time.
And I, I checked out some housesthere.
But it was a weird time. I think that was in like O6O7
(07:26):
where anybody was getting a loan.
But I was like, oh, this is kindof like you, You can just feel
the market was weird. It was off and I was 20.
I didn't know anything about it.But at the same time, I'm like,
I wanted to buy a house. Like that was my goal the whole
time. And so I ended up not
purchasing. The market crashed.
Nobody could get a job. Like it was hard to get a job
(07:47):
back then. And so I was just doing these
odd jobs like promotional work, like just random things.
And so I ended up saving a bunchof money.
And right after I went to college, I, I was working full
time again, like doing sales ran, I worked at Red Bull.
I did, do you know those Red Bull minis I was handing out Red
Bull that you get paid to like go to parties and stuff.
(08:08):
It was cool. But so I did that, then worked
again, like that was like some of the promotional work I did
and then worked at like a, what's this place called?
I can't remember, Remington International.
We were like headhunters. So we had to find engineers.
So it's like very random work. So but I saved all my money.
I was like hoarding as much money as I could.
(08:28):
And I ended up saying through this, I ended up going to
college to get like. So I got some loans, cashed out
my loans, liquidated my credit cards.
I bought my first house when I was 24.
Yeah. So that was like, that was my
very first portion of real estate where I was like, cool,
I'm going to do this so. Sounds like you met a mentor or
(08:49):
someone that I would assume theywere probably successful in real
estate investing and maybe you saw that and maybe you saw that.
Hey, if this person can do it, maybe I can also get into that
lane. Yeah, I, you know, I just heard
about him. You know, he had done like very
unique deals and kind of got in and like with no money down
scenario. It was like, again, very unique,
(09:09):
like when you don't have money, you were like in your mind,
you're like, there's a way to get here.
I just don't know how to do it right.
And even though I had bought a house, I bought a house and it
was just like, I'm winging it the whole time.
I don't know exactly what I'm doing, but I'm just like, I'm
just going to, I just my whole goal in my mind when I was
younger is like, I just want to buy a house, pay for it and
chill. Because in like if you own a
(09:30):
home, like you don't really haveany other problems, right?
Except for like things that you just create on your own.
But financially, like that's your biggest nut you got to
write a check with every single month, right?
Well, that's what I thought. Now I have kids and that's a
pretty big one too. But like, I'm just saying like
that's like the biggest check you're going to write, right?
Like that's your biggest overhead.
So that was my goal at that time.
(09:50):
I ended up buying another one, another one, another one.
So I ended up with four. And then I had met him and I was
ironically already kind of doingsome creative stuff like seller
financing. I did seller financing on two
other houses and but they were like kind of junky houses, but
it doesn't matter at that time. Like the market was like that
was in 2910, eleven and 12 and Iwas trying to buy a house every
(10:14):
single year. Like that was my goal.
And it ended up working out and the market went straight up.
I got super lucky and well, I think I was 28 or 29 when I met
him. So when I was, I think he was
29. And so that's now it's been 10,
almost 11 years and he's like, he took me under his wing and
said, hey, can you close this deal?
(10:35):
Because I'd met him at a auction.
I met him at a auction and he was like bidding like crazy.
I'm like, dude, I was going to bid on the same properties, but
you way over bid. I'm like, why do you over bet on
that? Like it was like ridiculous.
I ended up randomly seeing him at this place where he had he
had got these deals and I was like, yeah, you just bought this
one and that one. And he was like, like who?
Like get away from me, dude. Like, who are you, right.
(10:57):
Like you don't want to talk to me.
And so. And so I was like, what's your
name? He told me his name.
And I was like, oh, your partners with, you know, my, my,
my friend Seth, like, and he works for you because he had
ironically worked for him because I heard about him.
And I know he was. I didn't know.
He looked like. And so he he's like, yeah, maybe
(11:17):
I don't know, dude. Like, you know him, bro.
I know you know him. And so anyway, I'm like, Hey,
can I get your number? And he gave me his info.
So I gave him a shout or he gaveme his info, but he asked my
buddy about he's like, Hey, who's your buddy Brett, right.
Like this dude is like aggressive, like trying to get
it like just talk to me about whatever.
And so he's like, tell him to give me a call.
(11:38):
So I give him a shout. He's like, hey, I got a deal for
you. And he explains why he, he
purchased this property And I was like, he's like, OK, so I
don't think it's really worth that much money.
But do you know what happens to the funds when they go over the
bid amount? And I'm like, I don't know, goes
to the state. He's like, no, it goes back to
the owner and it's an over bid, right?
(12:01):
So you go and you go and collectthose bids.
He's like, if you can go and sign this guy up to collect it,
the over bid funds, I'll pay 2500 bucks.
And I was like, OK, cool, I'll do that.
No problem. So I go in there, sign him up.
He shows up, signs the paperwork.
He's like, cool, come to the office, I'll give you 2500
bucks. I was like, damn, that was easy.
Like I'll do that all day long, right?
(12:21):
Like that's a layup for me. And I was right.
I was right in the middle of being a firefighter and an
intern for Placer Hills, which is an amazing job.
All my best friends are still like firefighters to this day.
But I was like, I had a decisionto make and I'm like, I think
I'm going to go this route. So that's kind of how I got
started. And I guess the rest is kind of
history, so. Well that's awesome story, thank
(12:41):
you for sharing. I love to hear how people how
their journey kind of takes them, you know, from one place,
you know, a lot of time just kind of just like either
working, going to school, that type of thing.
And then how they get into real estate.
You know, sometimes it's by mistake and sometimes it's just
being in the right rooms at the right time.
(13:03):
So thanks again for sharing thatstory.
So when did you start to do, didyou always do buy fix and holds
or were you doing fix and flips or like wholesaling because you
have the four properties, right?Yeah.
So I kind of always had this goal of like buying and holding.
And again, when I met his name'sDennis, when I met him, he was
(13:24):
like, just sell your properties,man.
Like there's so much other opportunity out there.
And I was like, oh damn, it likemy whole life goal was like
buying and holding, you know, like you just crush my dreams
day one. So I was like, all right, like,
so I started fixing and I, you know, ironically, like I made
more money doing that. But if you really go and look
back at the market, if I just held every single thing, it's a
(13:46):
different scenario. But ironically, you don't really
have as much capital to work with because again, like make
like getting a job back then you're like making money was a
little bit more difficult. Like now everybody's rich,
that's kind of going back down. But like by at one point, like
not a lot of people had money tobuy houses.
So you had to get in there like in a very like creative way.
Like again, like the pre foreclosures, the tax liens, the
(14:09):
probates, all that kind of stuffwas like you can get in with a
little bit amount of money and your upside was way high.
So that's where I kind of got started and it was able to kind
of like snowball effect. And some of them I held, some of
them I didn't hold. And then after that I kind of
slowly started moving into like the the Adu builds and the Adu
builds was a real like pivot. And I didn't, I was like, wow,
(14:32):
man, I've got like, I think maybe I had like 15 properties
at that time, maybe 20 properties, which was like not
like some crazy amount. I'm like, well, if I had units
on each one of these, like now Igot 60 units, right?
And I'm like, that's pretty goodmoney.
I'm like, yeah, I'm going to getrich.
So but learning that is hard. It's not like when you're trying
(14:54):
to learn how to build and you don't have a system.
It's like it's nails on a chalkboard and you're like mad
at everybody. But really you can only be mad
at yourself. So, but it was a that was kind
of like the the biggest pivot from fixing, buying, fixing,
selling to like buying, fixing and holding.
Now, what was your market? Was that mostly like Sacramento?
(15:16):
Was it California? What?
What market area? Mostly all tags, so Sacramento,
Roseville, Citrus Heights, Elk Grove.
I just mostly stay in all the the surrounding areas.
I've gone out of state. So I have a small portfolio in
Reno and then another small portfolio in Ohio.
So OK. When would you say that you kind
of got into AD US because they haven't been around that long in
(15:40):
in California. I mean, I feel like, would you
agree that California is kind oflike the leader and the kind of
pioneer? Oh, they're absolutely the
leader in it. Absolutely.
They, I haven't tried to build outside of the state of AD us.
And maybe it's like my guess is maybe it's easier in some areas
and way harder in others, but it's like it's kind of common
sense to build AD us like we should have had this a long time
(16:03):
ago. But in 2019 as well, I bought my
built my first Adu. So I'm the I think I was like
the first one to apply to get myAdu in Placer County and I was
the first one to apply and get approved for 2AD USADU&AJADU in
Placer County. It was a really the first one
was easy. I was like, how is it great?
(16:24):
I do this all day, but the second one when you try and add
the other unit, that's when it became a lot more difficult and
you have to navigate through everybody to get there.
So but yeah, they but Californiais definitely like change the
game on on adding the units for sure.
So. In the beginning, I mean not
only are you trying to navigate it, but I mean these counties
(16:46):
are trying to figure. Out what's going on.
A lot of times you end up teaching them what they're, what
you can and can't do. And some municipalities are
great to work with and some of them are, you know, they know it
all. So it's like it's kind of it's,
it's a give and go. That's the building department.
If anybody's ever built, they know what it's like to work with
(17:07):
the building department. And it's never a fun, easy
layup, but sometimes it's betterthan others, right?
So, and the more I know and I and also the more they know, it
just becomes much more of a, it's like more of a, it's more
of a team game in some ways sometimes.
(17:28):
Sometimes there's always exceptions.
Yeah. So let's let's do a little bit
of a deep dive into AD US. For the listeners who maybe
haven't heard about AD US, can you kind of give a really brief
overview of what they are and how they work?
Yeah. So Adu is basically a how like a
(17:49):
unit that's in behind or on the side it's, it's, it's an
accessory dwelling unit. So it's another unit that's on
the property. So let's say you have a house in
the front, you can add another Adu accessory dwelling unit on
the back. In some municipalities you can
add 2AD US and some you can add a JADU up to which is up to 500
square feet and an Adu in the back up to 1200 square feet,
(18:13):
depending on what the municipality is.
The state code will supersede any municipality that's in the
area in the in California. So if there's any pushback that
you get from whatever municipality or city that you're
in, if you can cite the state code and show them, then you'll
be able to get approved with what you want to do.
(18:35):
It seems like the benefit to this is kind of like you said,
like if you just had a single family home on a property that
has a certain value. And then if you can add like a
whole nother unit, you know, even if it's a smaller unit that
could add so much value to it. And not only that, it it, it's
kind of addressing the the housing crisis that we currently
(18:58):
have in California. So like you said, it's kind of a
no brainer to be able to build these things, increase value and
increase rental or just increasethe units for people to live in.
Can you kind of talk about the benefits of it to both the state
and the residents of of California?
Yeah. I think it's, I think it's
(19:19):
definitely a benefit because you're able to utilize the
current land that we already have.
And it's been, it's been helpfulin a lot of ways for me to be
able to grow just my rental portfolio.
And it also I focus a lot on voucher housing.
So it's really the exact thing that we are kind of looking for.
(19:41):
It's really a game changer in a lot of ways because it's like,
instead of just selling watermelons, you're selling like
15 slices of watermelons, right?So you have like all these extra
units that you can add. And the cool thing is, is now
with the new laws that it's not just adding like 1 or 280 use,
you can add more. And I know in some areas that's
going to be accepted and in other areas it's going to be
(20:02):
very difficult. Like you're going to get a lot
of pushback from the neighbors. That's kind of a catch 22 in
some ways. That's a fine line you have to
walk. Like if you're in a very like
upper end neighborhood and all of a sudden you decide you want
to put 10AD us in there. Like I get it, you're going to
solve the housing crisis and where do you draw the line,
right? Like it's a very difficult like
(20:23):
conversation to have. And if you're being objective as
you possibly can, there's two, Iguess there's two ways to split
it. It's like obviously like this is
a very nice neighborhood, right?Do you want to put 1080, who's
here? Do you want to turn this into an
apartment complex with these houses that are $2,000,000 plus
in Sacramento? They that'd be the same thing as
(20:44):
like doing a $4 million plus in like La Jolla or something,
right? Like the neighbors aren't going
to like that. It's going to be a thing.
Does it address a scenario? Of course.
But there's not a lot of land there anyway.
So it's not that big of a deal. But now with the new laws like
you can add a lot more units. So in some of these nicer areas
have a lot of land. So it's kind of an interesting,
(21:05):
it's an interesting scenario that people will end up running
into. I know that's not what this
topic is about, but no, that's. That's totally great.
You know, it's something that not a lot of people think about,
right? Yeah, because, because a lot of
times real estate investors, we're looking at dollars, we're
looking at units, we're looking at more like concrete stuff,
right? You know, one of the things I
(21:26):
learned early on is try to get emotions out of decision makings
for real estate investors, right?
So say that to your neighbors though.
That's what I was going to say. So we look at it from 1 lens,
but the neighbors, like you said, they live there, that's
their home. They are emotional about it and
the things that happened in their neighborhood effects them.
And so you're right, you do haveto tote the line of, you know,
(21:52):
what's good for the state, what's good for us as investors,
but also what's good for the neighborhood, what's good for
the the people right next to youthat have to look at, you know,
these units and maybe they don'tthink they're attractive, maybe
they don't blend in. You know, it's all these
factors. It's definitely happens.
I have a good buddy. He also a mentor of mine with
Dennis. His name's Colin shell out to
Colin, but he just had the same scenario like he's it's a house
(22:13):
and 280 use, which you buy rightby state have that and the
neighbors made a huge deal aboutit.
So it's like just that just thatlike uphill battle sucks and
it's like I know that Californiais doing it for the, you know,
to get more units, but the pushback that you get is still
like it's still not easy. Not everybody can build AD us
like like no big deal. Like you definitely have to work
(22:35):
through a lot of problems and issues and you have to be able
to weather the storm. So I have a couple of buddies
that that have helped build AD us and it's like, as long as you
have knowledge of what you're doing, it makes it a lot easier.
So I would definitely recommend if you're going to build an Adu
and you want to do it on the cheap, find someone that's done
(22:56):
it before you can. Also, you can hire a contractor,
but you're just going to pay forthat.
No matter how you shake it, you're going to pay for it.
But if you want to learn, do it on your own.
Don't have somebody else build it.
Have a like hire a consultant, have a higher Subs like work
with someone you know that's done it before and it's going to
be work, but it will you will get a lot out of it.
(23:17):
It'll change your projection of where you go in your real
estate, a career. OK.
I have a lot of questions along that line, but I'll start with
there's something called the owner builder.
And can you talk about, you know, if you are trying to do it
yourself, you are trying to hireSubs, you're trying to, you
know, kind of get some of the work done.
Can you talk about what an ownerbuilder is and like kind of the
(23:40):
benefits you have to being an owner builder instead of like an
investor? Yeah, totally.
The the owner builder, that's generally what I do and I go and
I find I not hire out Subs. So you're generally looking at
like 17 to 20 Subs that you're going to end up hiring as
opposed to one contractor. So the one contractor is in
charge of all these Subs and youjust pay the contractor.
(24:01):
But when you go and hire out your own Subs, those you're
going to have to pay each one ofthose Subs, they all have to
work together. So now you're the glue that
makes it all happen, right? Which you're going to save.
I would say you'd probably save at least 50%.
So instead of you, well, really almost 100%.
So let's say you build, let's say you a contractor will help
(24:21):
you will a contractor will have will build a property for you at
300K, right? Let's say it's 1200 square feet,
300 K. You can probably get that bill
done for probably about 150 K. Now everybody's like that's
crazy. This guy's nut.
He's an idiot. Like I've heard of all these
things like I don't care. Like we you can build between
probably 100 to 120 to like maybe 150 bucks a foot.
(24:46):
This is a very like vanilla bill.
This is not like some over like imported from Italy granite or
courts or whatever. It is like this is just like a
builder grade regular place and you can get it done for sure.
It's not a question, but you have to be diligent with a Subs
you hireright, and they also have to be good.
You have to know what they're doing.
(25:07):
Anytime you're you have like a kink in the chain.
The best part about building is you're like, why did this take
so long? Oh, my concrete guy, Oh my
stucco guy took forever. Oh my roofer, you know, like all
these things, you know exactly what it is.
So you know how good your guys are and are.
And I would say if you want to get those kind of guys, get
(25:30):
referrals. Referrals are the absolute best.
So if you get a good referral from someone, utilize them and
just say, oh, you're a sheetrockguy.
Oh, cool. Like I need a painter.
Oh, yeah, my buddy does. Sometimes they're good and
sometimes they're bad. But it all comes into, does it
work in your price range? Are they good at what they do?
(25:51):
Are they fast? Are they efficient?
Are they like begging for money right now?
Like it all becomes like a thingwhere like, which you don't know
that until you start building. But once you get into that
rhythm, you're just like, oh, like, this is cool.
This is not bad at all. There is like a rhythm and you
kind of get used to things as you go.
It is very hard getting started though.
(26:11):
Do you have any advice for people that are maybe looking at
building an Adu on their own property?
I mean, you'd talked about doingthe owner builder route as far
as getting permits and stuff approved and then managing
yourself as well. Do you have any other advice for
someone who's just getting started or like kind of maybe in
(26:32):
the preliminary steps of kind ofevaluating if this is something
that's for them? Yeah, that's a great question.
I would say a couple things are,one is make sure you have enough
funding, right? So if you think the bill is
going to be 120 to 150, get 170 just in case.
That way if you do build it for 120, you get an extra 50K that
you get to keep, right? Like that's what you want to
(26:54):
have. The second thing, so funding is
always a thing. Make sure your rate is good.
Make sure it's not just like if you're a seasoned builder and
you've done it for a long time, you can get that short term
income like or you can get that short term loan, the bridge loan
or private money loan, whatever you want to call it.
You can go ahead and get that. No big deal.
If you're a brand new to building, you want to get real
(27:18):
debt like you want to get a HELOC that you're not going to
have to pay back right away. You want to get a fixed 30 year
debt on your build, right? So let's say it's going to be
120. You borrow the 150 or 170,
whatever it is, and then now yougo and you have to write every
single thing down, Write it all out, every single step before
(27:38):
you even start the build. This is before you start the
build is act as if you're starting right now, today.
What's the next step you're going to have to do to get this
build started? What am I going to need?
I need to make sure that my utilities utilities always a
number one thing. Everybody makes mistakes on not
getting their utilities on fast enough.
(27:59):
PG&E will take forever. SMUD much better, but they'll
take forever like any utility company like get your utilities
going ASAP. Stay on the phone, don't be
afraid to call, don't be afraid to ask questions so and get your
Subs in line. Your Subs are going to have to
work with each other, your concrete foundation dugout,
(28:19):
they're going to trench all yourlines.
You're going to have your plumber and your electrician run
your lines. Whatever you need to have ran
first. You're going to need to also
have them work with your framer because your framers going to
come out and be like, ah, these hold these hold downs are in the
wrong place, right? Or this is in the wrong place.
Look at the plans, have them work together.
It's a team. The best thing about working
(28:40):
with the different Subs is you learn how to manage A-Team and
you get to work with them. They don't work for you.
That's the other thing. Like even though you write the
checks, the one thing I'll say is it it's a team game.
When you have someone that wantsto give you all the pushback,
it's like they're not the ones if they're trying to help you
and be like Brett, like you're wrong.
Like that happens all the time. I'm like, all right, OK, like
(29:03):
what am I doing? Like, what do we need to do to
make this better? Right?
Like have people that are on your team, not that are like on
another team just trying to get themselves a win, if that makes
any sense. So but once you write everything
down, you have all your Subs there, they work together and
you just you should go from there.
It's the other major thing I'll say if you're going to run your
own job is you always have to stay three to four steps ahead
(29:26):
of where you're going to be next.
So you dug out your foundation, you framed it out.
They're going to put in there, they're going to put in their
crush rock. They're going to get ready to
pour. You already need to be calling
up your you already have to havethe take offs for the framer.
You already have to have hay, the roof and the windows or
should be ordered as soon as that lumber is dropped and you
(29:46):
want to make sure. Also this kind of goes back to
the very beginning is have your windows standard size windows.
You don't need to have 53 1/2 by31 1/2 windows.
Like no dude just do 36 by 48 orwhatever it is so you have
egress and it's easy. If it breaks, no problem I'm
just going to replace it. Make it very simple.
(30:07):
So yeah, I don't know if I'm going on too long of a run.
For you, I was going to ask moreabout it.
Yeah, like some of the other things I can think of is like
getting prefabbed countertops, you know?
Yeah. So the granite guy has that so
that when the the granite guys come in there.
So once you have that's not moreyour finished work, right.
And so you have your cabinet guys or your cabinet guys going
(30:28):
to go put everything in there. And again, standard cabinets,
right don't do anything. Easy.
I have some great places that you can go like they're, they're
great. They they're fast, they're
efficient. They're going to tell you how up
and down your plan is not going to work unless they do it their
way. And they're right, they're
right. Just listen to them.
So it's like they they make it happen, dude, and they're
they're good. So it's kind of interesting to
(30:51):
to like, but once you get done, you're like, Oh, there's no
project that I've done that I haven't learned something new
one. So you're always going to learn
something a little bit new and a, I've had other people run
jobs and it's good, but it's like, it's hard for me to not be
like, you could have done that better and cheaper, but it's
like you got to kind of step back eventually.
Like if you're starting to builda whole lot, you have to hire
(31:13):
someone out and they're not going to do it as good as you
are. They're just not.
You can only do as so much as asyou can to like train them, but
at the same time like they're going to do them and they're
going to do it their way. And it doesn't it's not bad,
it's just different, right? So you just kind of got a once
you have a lot of builds going, you got to let them kind of take
the reins. But in the very beginning, build
(31:34):
as many as you can on your own. So you know the exact system.
You don't have any question marks, but get started right
away. Like don't weigh like just
build. And kind of going back to the
beginning when you're kind of planning something that I've
been told a few different times is really understanding how your
utilities are going to hook up. I think you'd already talked
(31:55):
about electricity, how that's going to tie in, but also how
the plumbing ties in, right? So like, so like knowing where
you have to tie in and how much slope it needs.
Totally. It's really important.
So can you kind of talk about that as far as like site
planning and and figuring out where stuff?
Great question. So now what they don't want is
(32:17):
like, let's say your Adu is in the back of the home.
They don't want you to connect to the back of the home because
if because of the way that if you get a clog, if there's a
clog up front, now you have a clog in the back.
So what they want you to do is they wanted you to run your line
to the very front of the house that they want you to trench all
the way around the house or to the side, however it is, and
then you hook up in the front there, right?
(32:39):
So that's your first scenario that you have to be aware of.
But that's mostly, most of the time that's going to be on the
plans that you'll have in your engineer, your draftsman.
You don't need an engineer for these.
You need a draftsman. And their draftsman are cheaper
and sometimes they're faster andeasier to get a hold of, but
sometimes the other way. So just depends on what you got.
I would say that's your very first portion of where Well, the
(33:03):
very first part is can you build?
But second of all is like your draftsman, it's going to build
it for you. How fast and how much right are
they going to go through the redline process on there with you
for the corrections like make sure you get through that
process. So because everything else is
predicated on that bill, on thatdesign.
So, but back to your question, so with the slope, if you don't
(33:23):
have the slope, you have to havewhat's called a sewage ejection
pump. So it's a sewage ejection pump
is not ideal. Usually they'll have those and
like if you have a bathroom in the basement or something.
But The thing is, the issue is, is when it comes to that
tenants, I swear they love, loveto use wet wipes.
It's like wet wipes. Like why?
(33:45):
Like I never used wet wipes everin my entire life until I had
kids, right? But then not everybody has kids
for some reason. They always have wet wipes and
I'm like, OK, whatever. So the issue is those get
clogged. You have to have your plumber go
out there. So make sure whoever installs
that knows to get you a very good motor, something that's not
going to get eat up. And if it does have any issues,
(34:05):
are they going to come back and are they going to fix that that
motor or the issues that the tenants are going to great.
Obviously it's not the plumber'sfault.
It doesn't it doesn't go on the plumber, but are they going to
be able to come in there, fix the problem, change it out and
move on because they're going toyou're going to have an issue at
one time or another. It doesn't matter if it's like
high end or low end or expensiveor or not expensive, you're
(34:27):
going to have an issue do. You ever kind of leave access to
that portion so that if something does happen, it's
easier to get? To yeah, you have to have access
anyway so like in general like you have to have like I mean you
put there's a lid on there and it looks nice and pretty the the
building department will tell you kind of what you need to do
on there so. Speaking of building department,
there's some over the counter plans that people can use.
(34:51):
Can you talk a little bit about how that works and?
Those are great. Yeah.
So the over the counter is a lotmore efficient and faster.
You're still going to have to have a like a, it's called a
line diagram of where your electrical is going to go.
Because even if you're in the, if you're in the front of the
house, you're, it's like, where is it going to go?
It's going to go here, OK, are you going to have two meters?
Are you going to tie into the front house?
(35:12):
So there's still, there's still a level of knowledge that you
have to have to get through thatprocess.
And again, like I would hire a draftsman for that or I would
call them, have a relationship with this city.
And then if they're like, you have to have a draftsman draw it
out, then get on the phone and get on your Facebook market
groups or Facebook groups and say, hey, is there a draftsman
that someone recommend will be like Michael Murray, Jason
(35:35):
Whitman, blah, blah, blah, blah,blah, all these.
People. Yeah, they'll just have
everybody on there, right? And it's like you'll get
somebody out of it. So if you want to get it done
like you're going to get it doneone way or another.
A little bit earlier in our conversation, you talked about
people with voucher systems and how you're trying to provide
housing for them. Can you explain what that is and
(35:56):
and and how you're accomplishingthat goal of providing units for
people like that? So we do a lot of voucher
housing, which is basically Section 8.
We focus on veterans, battered women, people would like single
moms with kids, which is not just them.
It's just like happens to be like they're on the vouchers.
And if they don't have to be vouchers to get into the, to get
(36:18):
into the houses, we have market rate tenants as well as as
vouchers. But we do have relationships
with some of the, with the counties with that have voucher
housing. And so they will say, hey, we
have, you know, I don't know Leah that wants a place and you
know, she's looking for a 2 bedroom.
(36:38):
And So what you do is in that zip code there's called what's
called a Section 8 payment standard.
And that Section 8 payment standard will say that for the,
you know, 95833 zip code, they're going to pay 20 $600 a
month for a two-bedroom, 1 bath.So we build 2 bedroom, 1 bath.
They have someone and Leah's like, yes, I'm I'm happy.
(36:59):
Like they're full voucher or maybe they pay, maybe they pay
20% of that. So you know, they get a, they,
we still do the application process.
They still have to get approved and then we put them in there.
Sounds like a really cool way tokind of give back to the
community and like help some people that are less fortunate
and or you know, maybe going through a tough situation or
(37:20):
something like that. So it's really nice that you
guys focus on those types of people and helping them get out
of a bad situation. So that's really great.
Another thing we like to talk about on the show is real estate
investor mindset, right? So we like to discuss with our
guests like what are some of thethings that they recommend to
(37:42):
either new real estate investorsor seasoned real estate
investors and basically like what's the mindset needed to be
successful and, and stay consistent and have, you know, a
long career, long successful career at real estate and
investing. The most important thing, it's
(38:03):
not really just in real estate, it's it's in life is like it's
your own fault. So if you're really successful,
that's your fault. If you're not successful, that's
also your fault. There's a book that I've that I
listened to. It really changed my entire like
projection of my life was it's called your wishes, your command
by Kevin Trudeau and it was it was a major there's a book
(38:25):
called the secret and then there's the wish.
There's your wish is your command, which is like the
secret on steroids. And it's like truly based on
anything you do is your own fault.
So if I do really well, again, my fault bad your fault.
So I think when people start to understand that they are in
control of their own destiny in the real estate game or selling
(38:49):
cars or writing a book, like that's what makes people the
most successful. So and I think having a plan is
also super important and a good team around you.
So people that take a lot of credit for the things that they
do is wild to me because I'm like, there's no way you're
getting here by yourself. I think that's a big red flag
(39:09):
when you see people are like I did all by myself, yes, you did
any again, if it's your fault, if you're there, it's your fault
and you are the one who should be able to reap the benefits.
If it's not, but at the same time you didn't do it by
yourself. You have usually you have a lot
of great people around you, which is 100% true.
You are you're as good as your contractors, you're as good as
(39:30):
your wholesalers, you're as goodas your lender.
You're as good as your title company, right?
You're as good as like the guy who told you about the deal,
right? Like The Who taught you the
ways. So it's like everybody is a
team, no matter what it is, It'slike it's a team.
Now you might be the captain of your team and you were the one
that kind of makes it happen, but at the same time, they're
the captain of their teams too. And they got you the deal.
(39:53):
So it's like understanding that it's a total ecosystem where
everybody wins and it's it's. It's really important to have
those things. Yeah, that's really important.
And I heard you mention earlier about systems, it seems like it
seems like you're big on systemsand setting stuff up to be
(40:14):
repeatable. Can you kind of talk about that
a little bit? Yeah, I would say early in my
career I was and I'm always working on my system.
It's I don't have it perfected. I'm always trying to get better,
but like early in my career it'sI would get a phone call.
This is like when I first started having my own rentals
and they have a plumbing issue. I'd be like, F that dude.
(40:35):
Like dude, fix it. Just go fix it.
And the reason why is because I don't have a good plumber to go
out there and fix the deal, right?
Like if I have a good plumber and they're going to go fix it,
I don't care. I'm like here, call Victor.
Boom, Victor. And he's like, yeah, I got it no
problem like that's his job he'sreally good at it I've worked
with him for a long time and he goes out and he bangs it out.
So having a good person to go dothe project is not an issue.
(40:59):
So that's part of like the system and the Rolodex that you
create. The longer you're in the game,
the better you get at your job. And if you do not create a
system and you don't create a Rolodex to put the right people
in the right places, you will not be able to succeed.
The same like the people. The, the guy I always think
about is Elon Musk. That guy's like like a systems
(41:22):
master, like the most successfulpeople.
And it can be anybody who's likesuper wealthy or very
successful. It's like they created the
absolute best system. So it's like you can't lose with
a good system. And then you just have to find
the right people to put the people put to put them in that
position to succeed. And if it doesn't work, it's
(41:44):
just like building a house. It's the building a house is a
system. And you got the 17 sub and
you're like, oh, this one didn'twork.
Change him out, get a new guy inthere.
And now my system is back to building a house, right.
So it's like everything is predicated on a good system.
And if you have that, it's, it'sdifficult to lose, especially if
(42:06):
you're like really walking through the steps and like
trying to make everything better.
Then obviously you like you as areal estate investors, a huge
like the only one that's going to drive your ship is you.
So you going to get the best deal, like you can have the best
system in the world and you buy a bad deal, like who cares?
Like you blew it because you didn't find a good deal.
(42:28):
Like you're going to, you're going to make money or lose
money when you buy that, buy thehouse, right?
Like you might be able to like weather the storm if you keep it
for 10 years, but that's a loss,you know, like, so, so being
able to like you as the, again, as the investor, you're the
captain of the ship. But at the same time, like if
your team is running it well anddoing their job, you're winning.
(42:52):
And you are the one that is directing them to go to the
right places. And if you buy a bad deal,
again, that's on you. That's not their fault.
So yeah. Great advice.
Are you using any type of technology to kind of get some
of maybe some of the systems on your end dialed in?
(43:12):
I'm really starting to focus a lot more on AI and trying to
figure out how I can use that inmy business.
Are you taking any steps or or trying out anything new as far
as automations or AI? Great question.
I'm not there yet. I use the software for my my
rental portfolio. But when you use it has been
successful for you. Maybe it'll jog my memory.
(43:34):
I mean, you know, some of the software I use for real estate
investing, not necessarily AI inspired, but I use property
radar to kind of find deals and analyze deals.
I just got signed up with a short term rental company called
Air DNA and they kind of help run comps on short term rentals
(43:56):
as I'm trying to get into that market a little bit.
You know, obviously there's CRMStrying to tap in a little bit on
a software called Go High Level.I don't know if you're familiar
with that, but that's a pretty complex system that takes a long
time to figure out how to use. But as far as AAI, I'm not
really using anything. I'm trying to figure out how
(44:18):
chat bots work a little bit, tryto figure out how to get maybe
some inbound text messages replied to, maybe a little bit
of outbound if. Like figure out if people are
interested in the cell and if they are, set an appointment
with me. So I'm in the very early stages
of trying to figure this stuff. Out.
(44:38):
So I was just kind of wondering and see if it's something that
it's kind of on your radar. Yeah, it definitely is.
Like I've there's some things that I've started to look up a
little bit more in depth with ChatGPT.
We're looking up codes on is this a code that I can work
around? Is this zoning?
Like what can I do here via the zoning that it's already zoned
(44:58):
without having to go through a secret process or whatever the
case is. So there's definitely things
that I would recommend with ChatGPT is like ask ChatGPT be
good at asking the questions. Sometimes they're right,
sometimes they're wrong. But like chat GPS ChatGPT or
like, you know, the AI software,it's a game changer.
So like they have all the answers in a lot of ways, you
(45:22):
know, so. It kind of blows your mind, too,
as you're doing it. And you're just like, typing in
prompts, you know? And once you refine your prompts
and figure out how to, you know,ask it better questions and
stuff like that, you start to see all this, like, incredible
information just coming in. And you're like, wow, yeah.
I don't think. Yeah, there's like, there's no
(45:43):
excuse to not have the knowledgeto do something at this point.
And that's like, I mean, Google is already pretty good, but
Chachi, he's just like. Yeah, we grew up on Google and
we had YouTube, right? So to learn from YouTube
University and now it's like. Any questions you have about AD
us or you know, like our laws orwhat you can and can't do, like
(46:06):
start there, swing the bat, likejust go and take a look.
And that's that's a big game changer.
So I, I kind of think it's a, a fine line though, as far as
using AI and then kind of something you mentioned earlier,
leveraging the knowledge of other people that have done it
right. So, so that, so to me, there's
always this man versus machine, you know, battle, right?
(46:30):
Like, do we, you know, let AI kind of help figure out how to
do this stuff? Or maybe it's better to have
another human who has the actualexperiences done 100 AD us, you
know, so I feel like there's youkind of have to tote the line
there. Like some things would be like
AI, but other things you're justreally going to learn from
someone who's done. It yeah.
(46:51):
And you know, what's interestingis when you learn from someone
else that does it like, and you have like a consultant or a
mentor or whatever it is, you don't end up you kind of work in
the beginning when I met my mentor was like I was working
for him. But really in the end, like we
work together and you learn so much from him and he but he's if
you have the right one, you're going to learn from you at the
(47:12):
same time, right? You're not just it's not a one
way St. And you know, whether it's in
real estate or looks or whateverit is, it's your spaceships.
It doesn't matter. It's like you're going to learn
from them and it's like the right person is going to have an
open mind and thought process where you're going to be able to
teach them. Like the younger generation is
(47:33):
like, dude, hey bro, have you seen this?
Yeah, I'm like, no, right on my own.
That's cool. Right.
Exactly. So it's like there's so much
information out there. And the young ones are the ones
that are like in the middle of it.
They're like they're used to it.Like the guy who does my, he
does my Instagram, his name is Logan.
And that dude is a beast. Like that dude can put
(47:56):
everything together and I'm like, he just knows so much.
It's awesome. It's cool to see, but you know,
he'll learn at the same time. Like so again, like the right
people around you will just share different ideas and you
can really grow a lot from that,especially if you're a doer.
If you're just a like, let me think about it like that's fine,
but you're not going to really get far in the sense of like
(48:16):
what you're doing in the in likeyour actual potential unless you
go out and try and do it then. And I think going back to what
like how to get started and being a good real estate
investor is like you, no matter what it is, just get out there
and do it. You can take a loss and be OK.
You know, just go and lie to yourself and tell you that you
did really well and do another one right after.
(48:38):
Like it's going to work out. You're going to get better.
But no matter what happens, be adoer.
Do not be just a thinker, because if you just think,
think, think, think, think, you will never get anything done.
Go and do it. Find the right guy.
Run your own numbers. Like, OK, I'm buying it at 300.
It says it's worth 450 right nowin today's market.
Worst case scenario, if I sell it for 400 and it's a $40,000
(49:01):
rehab, I'm going to make 30K right after commissions, holding
costs, all the rest of it. But you will never know that,
you know? And guess what?
If the market goes up, you're even better.
Yeah, right. So swing the bat and make it
happen. That's great advice.
Thank you so much for coming on the show kind of talking about
some of the Adu stuff, some of the buy, fix and hold strategies
(49:23):
that you're using. So every week on the show, we do
a free book giveaway and for ourlisteners to enter, all you need
to do is like and comment which book you have here.
So for the listeners, we have Rich Dad, Poor Dad, cash flow
quadrant 10X, Roll E, myth, Simon, Sinek eaters, eat Last,
(49:45):
we have go giver. So do any of these books stand
out to you? Yeah, so there's 2 So I like
outliers. That was a great book.
And then cash flow, I mean, we should have poured out if you
guys ever not have not done anything in real estate, read
the first book. It's great.
And there's also a game called cash flow and that'll definitely
have your mind thinking about stuff differently.
It'll you'll be, you'll realize like, oh whoa, like you need to
(50:08):
buy a business, You need to buy a buy and hold.
Like it'll change your thought process dramatically.
It's a game. It's literally called cash
flows. Board game called cash flow,
similar to Monopoly, but you actually learn how to totally
become an entrepreneur and how to create assets is obviously
the main thing. All right.
Well, thank you for coming on the show and we'll catch you
(50:31):
guys next time. Thank you, Ian.
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I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com