Mike:
0:00
All right, everyone. Welcome to the Real Estate Game Changers show. I'm your host, Mike McKay, based in Jacksonville, Florida. And each and every week we do this show with people who are changing the game of real estate all over the country And this is a live show. So if you have any questions, please put them in the comments for our guests to answer Also, if anyone is in sales in jacksville and thinking about getting into real estate reach instagram. We are looking for a few new sales reps for our team so let's talk this week on the show, we have Nawid Roztaieh. Nawid, welcome to the show.
Nawid:
0:33
Thank you. Appreciate it. Thanks for having me.
Mike:
0:35
Cool, man. So for people who don't know you, could you give us a little bit of background about how you got into the real estate business and how that led you to where you are today?
Nawid:
0:44
Yeah. I it was honestly by accident. I was selling men's suits at Dillard's. And after graduating from college, I was looking for a job in working for government. I got a degree in political science and international relations. So I'm going back a little bit wanted to go to law school. I took the LSAT, did okay, didn't do really well, but it was just good enough to get into Florida and Florida State. I had my my my side set on bigger schools like, Georgetown and Harvard and stuff. But didn't get into those. I was a little bit disappointed, I didn't want to be just another lawyer, making average living and whatnot. So I was in a, in this place where I was searching for something to do, just make money, pay bills. And I come from like a sales background. So my family we are all like we had convenience stores and stuff like that back home. And my back home. So we migrated from Afghanistan in 2001. And we were basically like merchants and things like that. And so sales was just like a natural thing for us and so we all work retail so my you know When I came when we came to the united states, I was 15 years old So I started working at winn dixie. That was my very first job making five dollars an hour Fast forward then you got dillards, and so when I graduated from college, I relied back and went back to retail Selling suits. So that's that was the beginning. And then I was like, okay if I'm making X amount selling suits, if I sell something larger, I might make more. So it was more of a commission type thing. So we I was looking at some options and got into selling cars. So from there cars were obviously better. So you the income potential is more, it's a larger item to sell. Profit margins are better. And then I'm like, okay what's next? I'm doing pretty decent selling cars. What's the next bigger thing. And so I was like, okay, houses, that's a pretty big thing. People need a roof over their heads. So let's try flipping houses. So that that was nine years ago. And here we are today. I'm still flipping houses,
Mike:
2:38
So you jumped from selling cars, but it's interesting that you decided to flip houses and not just sell real estate as an agent. Like how did you come to that decision? Cause that's almost seems like a shift,
Nawid:
2:50
It's yeah, it's like a natural progression. So when you sell like a car you own the car, you know So I was not working for like a dealership. I was actually buying the car. So it was like vehicle arbitrage I would just find deals on Facebook marketplace Craigslist Would drive down to Miami for a day, drive back rent a car, drive down to Miami, buy a car, bring it to Jacksonville, clean it up, fix it up and then put it on different, auto trader and whatnot and sell it, so I would take down the title. I would pay for the car. Obviously the barrier to entry is a lot lower, when you buy a car for 10 grand. But maybe two, 300 bucks, 500 bucks into it and sell it for 13 grand, make a 2, 000 profit. And so I was always like accustomed to when I was doing cars for like several years just owning the asset and then selling it. I saw cars as assets. A lot of people see it as liability, but if it's your personal vehicle, it's a liability. But if you're buying it to resell it as an asset,
Mike:
3:43
Yeah. Okay. So when you said selling cars, I thought you meant you were
Nawid:
3:46
yeah, that's
Mike:
3:47
a
Nawid:
3:47
where the flip came from. I'm like, okay I got to own it. The property, the asset to to then have full control over it and then be able to sell it and make a profit off of it.
Mike:
3:55
Yeah.
Nawid:
3:56
So same concept.
Mike:
3:57
yeah. So how did you break into the flipping business? What was your first deal?
Nawid:
4:00
Yeah. So first deal was a, it was a, is a realtor, he my, my first property that I bought, my personal primary residence back in 2015. and that was through an agent a good friend agent. And so I started picking his brain. I said, okay I bought this house conventional loan by star, at the time I had, I put a 50 or a fixed mortgage on it. Like what if I tried to save up some money? And this was, I started picking his brain about a year before I got into the flipping and he said that you've got a couple of options you can do all. So I was basically, I didn't want to involve anybody else in the risk side of it So I was always a saver. So I had a savings account, savings already in the ready to go And so it took me another year. So this the conversation was 2014 And by 2015 I had enough saved to where I was able to and even a 2015 house in arlington you could buy a house for 10 40 grand and flip it for 80 grand. And that's what my first flip looks like. Looked like I bought a house. It was a real estate loan, a bank owned property. It was on the MLS. It was on there for 50 grand. We offered 40. We ended up buying it for 41 and change, 15 into it and I flipped it for 80. So those are the numbers for the first one. And so that's again, it was very like, that was, I could, and that was it. I couldn't do a second flip. I had to wait for the first flip to sell before I could go do more. And and as I got comfortable doing it, I was able to connect with some hard money lenders. And then that kind of, helped me grow into the next phase and do multiple flips at a time.
Mike:
5:22
Sure, and over, over the years, obviously there's not as many bank owned properties on the MLS anymore. How have you changed your acquisition strategy to continue buying over the years?
Nawid:
5:32
Yeah. I the MLS deals w that I started with MLS, then I got introduced to the foreclosure auction, Duval County foreclosure auction. That was pretty good In 2016, 2017 there was quite a bit of deals, quite a bit of foreclosures. We used to see just in Duval County, somewhere in the 20 to 30 foreclosure sales a day. Now we see two to three a day, that was the second thing. So I was like, okay I'm going to need some money. So I started tapping into some of those hard money lenders, the properties I would buy through the Duval County foreclosure option. I would then bring them in and have them do a cash out refi. So I would pull my cash out. So that I'm ready to bid on the property at the foreclosure option. So that was like the second avenue. I had no idea about wholesalers. And this was, this came late. Like I probably started buying from wholesalers, maybe three years ago, four years ago, the first five years I was doing this, it was MLS relationships. It was all about building relationships with realtors. So because the very first deal was from a realtor, I said, okay, I'm going to focus heavily on building relationships with realtors. And so then the same person that I bought my first house brought me a second, a third, a fourth. And then I started branching into some other, obviously realtors that have listed properties. It's all cold calling them and say, Hey I'm now eat. I've done a few flips. I one thing I can tell you is, I'm not gonna, waste your time just pitching that it's it's going to be a cash deal. And again, I used to heavily rely on cash because at the time I was a little bit fearful of locking deals up and then. Doing hard money on it. I always double close. I would buy it and then I would pull the cash out So profit margin worked low, but I wanted to guarantee I wanted to give the realtors a certain level of Confidence that i'm going to close this deal even though hard money was a lot of people are still a little skeptical about it Because there's still sometimes a an inspection involved or an appraisal involved depending on the hard money lender You So I wanted to give them as easy of a transaction as possible to come in a little bit lower than the competition. If somebody had hard money, I would try to beat those guys out by offering cash and a quick close. I would offer a seven day close versus a 14 day close or a 21 day close. So I would find these little, niches, these little competitive edges over the, over some of the other people. We'll lock it up and go back and do a
Mike:
7:45
Gotcha. Okay. And then what made you shift your strategy? Maybe you still do have a lot of realtor relationships, but what made you open up to the idea of buying from wholesalers three years ago?
Nawid:
7:56
It, it also happens naturally or organically. I think wholesalers find ways of building their cash buyer list by looking at, recently sold properties and if it was sold for cash or hard money, they have a way to, so I was getting, I started getting calls from them and I'm like, huh, this is interesting. I, and then I would see, I started joining groups on Facebook, the real estate investors groups and things like that. Then since then our volume has gone up because we do a lot of deals with wholesalers now, 80 percent of 80 percent of the inventory we have are coming from 85 percent actually coming from wholesalers. And so same exact concept, nothing changed. So we just wanted to bring value to them, In terms of performing and being reliable and dependable. And and even to this day, they, we don't do any type of marketing or anything like that. We have a small crew five people here at the office, rental portfolio and whatnot. That's obviously one, one person is running that by property manager. We have a cold caller who does, not even full time, like 30, 35 hours a week. So we, we get a deal every month or so from there. Not crazy numbers but four or five deals a month comes from wholesalers and then two to three deals come from realtors and direct, we're getting stuff directly from Google now because we have a presence on Google. So people. That type in, sell my house or house buyers near me, home buyers near me, we pop off, in the Mandarin area. That's where the office is. So we pick up a lot of properties that way. And, uh, yeah. Yeah,
Mike:
9:24
And this is a question that comes up sometimes and obviously you mentioned being reliable is a big key, but people are like how do I buy more properties from wholesalers?'cause it is a different transaction than buying a property on the market and just putting in an offer.
Nawid:
9:38
so one thing that I would advise anyone that wants to be, you want to get on the wholesalers, good side. And there's a couple of things, I can break it down into two or three bullet points. One is communication. If you get a, personally, when I get a deal from a wholesaler and. I show interest and I say, okay, this is a deal that that makes sense. And I express that to the wholesaler that I be, I'm almost involved. They know that I'm interested, they're going to follow up naturally. You need to communicate, just say, Hey, this is my offer. If the offer works great, if not give them some feedback. Why is the offer not working so then they can go back and improve on their, Systems and processes and their numbers and so it's a two way street they're bringing me a deal, and if I show you if I express interest It's like my job to tell them that hey, this deal is It's great, but it's too tight. The margins don't work, Or I can you know wholesalers are not in the sort of in the weeds like flippers are we're actually doing the rehab We're taking all the risks You know the capital everything like that. So there's obviously, soft costs and hard costs all sorts of stuff involved in the real estate transaction So I basically sometimes even train them and walk them through the numbers and say hey the rehab But you got 30, 000. This is you can't do a cosmetic, lipstick on a pig rehab these days For 30, 000, this is a 50, 000 rehab, the ARV is way off, you need to be more realistic with your numbers. Obviously, I tell them in a nice way, but it helps them and they improve, then they bring me the next one, and I close on the next one and they, as a result, it just back and forth, and that's important. So I would say just be a, it's almost like a partnership. It's don't feel like they're out to get you or make an assignment fee off of you. If there's a margin, if there's a number, it's a win. You train them, you coach them, they bring you the deal. Everybody wins.
Mike:
11:21
Yeah. Any other things you think are, besides treating it like, partnership and giving them feedback?
Nawid:
11:25
I think on the, yeah, absolutely. On the back end, so I mentioned it was bullet points. So the the other thing would be actually the performance part, which is huge. If you say, okay, I'm going to buy this property. Then you, 50 per half of the deals we buy site and seen half are, I actually walk the properties if it's got a healthy margin and the some of the risk is built into the price, then I buy property site and seen all the time, but if it's a tight deal, I prefer to walk it. So I arrange a walkthrough with them. So just being as transparent as possible with them and say why you want to walk it. Why you're buying it sight unseen if it's sight unseen. What's the how are you going to perform? Are you going to be you know, so I usually give them, any title company they want so I think their life as easy as possible and Where they don't have to like, they're like, okay this guy I you know And if I can do that on the first one, I usually go above and beyond to make you know It's a customer service thing, you're making, you're taking care of the wholesaler and in a way, they, that same principle applies for any industry in the world. You can be communication, treating people with respect and performing and being dependable. They can rely on you making sure that you, when you say you perform on what you say, your word is your bond. So when I say, Hey, this is the closing day that I can close this in a week or two I usually like to over promise or under what was that over promise? Sorry, I got that whole thing mixed up. Under promise over deliver is the key. And so when you do that, you you set yourself up for some repeats deals. Coming from wholesalers,
Mike:
12:56
for sure. I think the ability to buy a property site unseen. As long as there's good pictures and videos, and it's obviously some trust with the wholesale you're working with is a big deal. Because a lot of times they have very limited access to the property.
Nawid:
13:08
right? Yeah. A lot of sellers don't want a bunch of people walking through their property for whatever reason, or they, a lot of wholesalers act as if they are the end buyer and, I respect that, you gotta make a living, so whatever it is that they're doing, I want to help them succeed in that, obviously the prerogative for the seller is to sell the property at that price that they have it under contract with the wholesaler. So it doesn't matter who ends up. Being the empire there, feel like the wholesalers are, they're invaluable because I, we do wholesaling as well and it's a lot of work, and I realized that, I'm good at the renovation side and the fixing and the flipping and the numbers and capital management and that, that side of the business. So I didn't really make the wholesaling a full fledged, business.
Mike:
13:51
Yeah, for because you mentioned buying sight unseen, right? What are you looking for when you look at a sight unseen deal? And maybe you're looking through pictures or videos like to be like, yeah I'll, I'll do this.
Nawid:
14:03
Yeah, it's actually that's a great question. It makes nowadays with technology, you can do a lot of things, there are satellite imagery, you got Google street view you got building inspections you, you could pull up permits and a lot of things, a lot of like major big ticket items, like a roof plumbing. If a panel has been swapped out, in a house via the building inspection and do all Clay St. John's, the areas that we operate Northeast Florida, they all have a pretty intuitive sort of websites where you can check all that. So that's like the first step is just doing a sort of a desktop analysis. Making sure that it's not in a flood zone and it's, it doesn't have a, a crazy commercial industrial type thing behind it or next to it. A lot of that can be done from the website online. And then the numbers are the biggest thing, making sure that it's a fairly cookie cutter neighborhood. It's not an unusual flip where it's like there's a 20, 000 house that's sold next door or amongst a lot of RVs or mobile homes or something like that. We've seen neighborhoods. Not to say anything is wrong with those types of deals, but we have a pretty strict buy box and our success has been to stay in that lane. And in that buy box, it's parameters that we operate within. And that helps, with analysis too, if I'm getting 20 deals a day and if I have a buy box that I know right off the bat, I can eliminate like 15 of those 20, they basically eliminate themselves. If they don't fit the buy box, then I'm not even going to, move on to the next step, which is. The analyzing of the, like I said, the streets and whatnot, numbers, obviously, you got different resources for that there's RPR, which is part of MLS, you can plug into the property and take a look at all the comps there is older comps, you can check Zillow. So make sure that there's not a lot of active, like one of the things that I look for is not a lot of active inventory and inventory with price cuts. Renovated inventory with price cuts in the area. So I not only look at the sold comps, I look at active what's on the market and how many days they've been on the market, if they've had price cuts, and I analyze all sides of it. I try to stick with properties that are, Fairly simple, desirable neighborhoods clean streets, with very little sort of riffraff and and dilapidated properties.
Mike:
16:14
There's not, none of that in Jacksonville.
Nawid:
16:15
yeah that's helped that's helped us, move everything. So we luckily, like every property we put on a contract or every property we put on the market goes on the contract in two weeks. Even in today's, even in today's, high interest rate environment, post COVID when the interest rates were in the two and 3%. We would be getting multiple offers same day or the next day on all of them. Now it takes up to two weeks before we put up a property from, you know, active to, to, you know, contingent. So still not bad.
Mike:
16:47
how also is you can end up getting drowned in all, like the wholesaler emails and texts and everything you get with all these different properties outside of just sticking to your buy box, and knowing this is what you buy it's gotta be almost a full time job to go through and analyze these
Nawid:
17:00
Yeah, it is. Yeah. It's and going back to what I was saying earlier is, the speed is key. A lot of, wholesalers like to. Get a response from a cash buyer right away. And I like to get on top of that. That's like my number one priority. If a deal makes sense I analyze it, I send the offer out, I say this is the number that it makes sense, if it doesn't make sense, I tell them right away. Hey, this is 900 square feet, 888 square feet, whatever the case may be, it does not fit the buy box, keep sending them. And wholesalers are really
Mike:
17:30
Even if it doesn't fit your buy box you respond so that they know you're an
Nawid:
17:33
I respond even if it doesn't fit the budget.
Mike:
17:35
okay.
Nawid:
17:36
Yeah, so I respond if, especially if it's a wholesaler I've I'm getting deals from and they're following up if it's like a one time deal and I never hear from them and one of those, I don't usually mess with them, but there are certain wholesalers that are just active and you see they're hustling and they're sending you deals all day long. And I almost feel like it's like my, my, my duty to let them know that, Hey, clean up your buy box for me at least. And then send me the things that fit my buy box versus just shooting me all sorts of different deals, shooting in the dark. So I wanted them to at least know, don't send me all this stuff. And it's almost like one of those like you said, Gmail filters, you said, you filter it out, and if they filter it, great. If not, then it's. It just gets ignored after that. But it is a lot of work.
Mike:
18:17
outside of obviously being in like clean, decent areas without a lot of riffraff. Like what, what are, what is your buy box in Jacksonville?
Nawid:
18:23
Northwest Quadrant. North of I 10, west of I 95. The pockets that, some of them still make great rental pockets, like 3 2 2 0 9, 0 8, 5 4, 1 9. That area for flips i've done some flips in that area and i've realized that the days on the market is a little bit higher we've had some properties that fell through multiple times for Financing reasons the people that prefer that area or like to stay in that area are not very highly qualified Maybe it was just my experience. Maybe I just had I just left a bad taste in my mouth overall the volume is a little bit low. There's not a lot of demand You know I was looking at this one zip code a days on the market and it falls in line with the areas we buy in like the East St. John's river which is like the three to two starting with Oh, seven, right. Three to two Oh seven, two one, one, three to two, four, six, seven, seven All the way to the beaches and then South all the way to the Bay Meadows area and North St. John's, 565859, uh, Ponte Vedra, all of that area is the days on the market is much compared to the Northwest of Jacksonville where the days on the market is much higher. Mandarin on the west side. We have multiple flips in the 3, 2, 2, 5. So those are not bad depending on which section of it you're at. Middleburg is good. Even though a little bit higher, the days on the market orange park you got Fleming Island which I personally love. It's a very active people love Fleming Island for whatever reason. Maybe the schools are great. But we've been able to move properties much faster in Fleming Island compared to some other areas. Highlands 3, 2, 2 1 8 is not bad on the north side. We've had success with that area. And then, outside of the beltway is good too. 3, 2 2 2 2 and two six, and some of these zip codes, that are like newer neighborhoods that are going up. So that's like in a nutshell, if you were to look at everything, so I'd say Duval Clay, St. John's. And then minus that little bit of a pocket on the northwest, the hood.
Mike:
20:25
Yeah, and then do you look like for a specific square footage of houses or years or you don't
Nawid:
20:30
Yeah. So that got refined over the years. I used to buy everything but we had a lot of issues with frame houses off grade frame houses that were built before 1980s. Yeah, 80s, so I buy everything 80s and after, frame, concrete, block, brick, but before 80s, I buy brick and block only.
Mike:
20:50
Okay.
Nawid:
20:50
Yeah. And you know, when you get into like the 40s, 50s, 60s, Avondale, Murray Hill, that, that area. It's very that stuff is all rotting away. The houses, they need a lot of work. There's a lot of surprises that a lot of, I learned that lesson the hard way I lost money on a few flips. I didn't make a few flips. And now I just avoid it altogether. Yeah,
Mike:
21:09
Okay. Yeah, that was the last slip that I lost money on.
Nawid:
21:12
Yeah. It's just like, Fixing the floor joists and the wonky floors. There's all sorts of craziness that, that goes on in those places.
Mike:
21:22
Will you buy on it? Will you buy stuff on not off grade though?
Nawid:
21:25
if it's not if it's a slab foundation and it's it's frame I guess I could, I bought stuff in the 70s, but if it's frame and if it's If it's older than 70s, 80s I tried to look the other way. If it's newer I, I do buy them. If I were to go back and look at my current properties that are under contract. that I'm buying or the properties that are under construction they're all concrete block or brick, or they're newer. We just have an easier time with them. The rehab is more predictable. I prefer those. Every now and then I do buy something that's older, but that have, they must have, the margins need to be crazy. It needs to be like 30 or 40 cents on the dollar for me to consider something like that.
Mike:
22:04
Yeah, and then with everything changing, in the market, obviously demand not as crazy as it was, two years ago when you get a million offers on day one day to have you changed anything about your construction side with finishes or anything like that, or still doing pretty much the same there?
Nawid:
22:20
Yeah, the construction side, like as far as the finishes has changed, we used to do a lot of beiges. Now we do a lot of grays, but still use the same exact stuff for a 200, 000 house and a 400, 000. It's still luxury vinyl plank flooring. It's still the same agreeable gray paint on the inside, still the same level one granite. Still the same stainless steel appliances. It's the ease of operation and systemizing that is a lot to me. It's not worth saving 2, 000 over. If you go for Micah countertops versus granite, maybe you will save 800 bucks on a smaller average size kitchen, but just toggling between the two, it's not, to me, it's not worth it. So not to mention that 200, 000 house with all the nicer finishes. We'll sell a lot faster than somebody else who has a 200, 000 house. That's comparable. So we over renovate the lower price houses. And we're like on par with the rest of the market in the medium or medium price point houses in the 400, 000 range, 350, 000 to 400, 000. And we also do some 500, 000 to 600, 000 The highest price property we've done was a million in Flagler Beach. And that was totally different. So you have to do some custom finishes for something like that. But that's very few and far between. For those custom VMs.
Mike:
23:36
And then talk a bit about, cause I know that you run your construction operation in house. And when I mean in house, like you, you like sub it out, you have a project manager, like you're not hiring out to GCs. Maybe talk a little bit about like why you decided to build it in that way.
Nawid:
23:52
question. It's a lot easier to have more control and be um, Sort of, I like to be in the driver's seat. I want to know the, Obviously the material costs, the labor costs. You can you, if you have more control as you scale, the economies of scale comes into play. If you have 20 properties undergoing construction at a time, which is what we had at the peak, we have about 14 under construction currently, but if you have 20 properties under construction at a time and you know and, they're all so we have three different crews that work on these houses, almost like three different superintendents. And they oversee the same exact plumbers, electricians, roofers. Kitchen cabinet guys and all of that. So all of those lower tiered numbers are consistent. It's the same the only thing that changes is the super is pricing because they're What one of our supers is exclusive? He's a payroll type Ordeal, but the other two are independent contractors, but they prioritize our work because we give them a lot of work And so they're always on, they can start a house like tomorrow if I give them a house today They will they'll be there tomorrow trashing out and cleaning up. So those are we utilize it's a slightly different system so they have their crews that You know that do the trash out the carpentry The sheetrock and all of that. We call them generalists. So generalists, they basically go and clean out demo Trash out all the, basically the carpentry and sheetrock all the rough work and along the way they also manage the plumbers and electricians and all of that where I don't have to bring somebody else. So it just makes it a little bit more efficient when we have it structured that way. Versus bringing in a GC who has obviously who can pull the permits. And then we sub out the GC to a, to an actual GC. So we don't have none of the supers are certified, general contractors, they're basically project managers or superintendents. And when we need a GC, then that's when we sub it out, but if we don't need the GC, it's just a trash out and, cosmetic. They just go in and we can knock it out. Speed is extremely important. And that's also where I come in the same way I respond to wholesalers in a timely manner. When they send me a proposal, I approve it or tweak it like within the next, 10, 15 minutes, it doesn't even go past that, so I'm constantly on, as soon as I approve them, their work begins. So it just makes things a lot easier and smoother. I don't know if it's scalable because I'm still involved, but at some point, my, my hope is to bring some sort of a, a CEO position to take on my role.
Mike:
26:23
How does it work then? So the supers they have crews that work for them and then they use your plumbers and electricians and everything. They use your Okay.
Nawid:
26:32
we have a preferred, we have a preferred vendor list of two plumbers, two electricians, two of each. And so what happens is we have a preferred A tier, group, and so they're getting all the work. Now, in the event that they're slowing down or they're not performing or they're like our plumber, for instance, got into a situation where he had a couple of guys. Yeah. Come down with some sort of a fluke. So he was getting really slow and, and so we went to the next plumber and so we feed the main guy and until he can't take on any more work. And then we go to the second plumber, second electrician, second cabinet guy, granite guy. And so those are all subs. We have set pricing with them. We have a pro account at home Depot. So all the purchases, everybody has access to that. And so if we get contractor pricing, everything is discounted. And so the three basically project managers are all we have meetings and we talk about, sometimes they work together, we they exchange, vendors. If we need to finish a punch, punch out a house, all hands on deck, everybody sort of swarms that house. We've knocked that out and they go back to their usual so it's so long answer but To shorten that the three supers are One of them is payable to our independent contractors the two independent contractors include demo, trash out, we supply the dumpster obviously they call the dumpster company. They're not only supers, but they're also project managers, so they basically take the project from start to finish, all the way to cleaning. And then they schedule cleaners too. And then we our office my assistant then schedules staging and photos, and then at that point they're done, they do a lot, they basically run the whole thing. I'm usually involved twice on a project when I walk in with them. And then when I go back and do it, and then I don't see what happened to the project in the middle. They run the whole thing.
Mike:
28:13
Sure, and then so they're, yeah, so they're free to hire whoever they want to do the carpentry work and all that. And they give you a price on that, but they have to use your vendors for the rest or
Nawid:
28:22
right. Yeah. So they sent me a proposal as soon as we walked the house on the, you If we have some doors that need to go in, new doors, stuff like that, trim work, finish work, siding work, all of that is them. And then all of the MEPs, mechanical, electrical, plumbing, and roofing, these are our preferred vendors. But they manage the preferred vendors too. They dispatch them, they get them to start sending proposals and everything like that.
Mike:
28:50
And then your kitchens, those guys do too, the guys who are the project managers or supers, sorry,
Nawid:
28:55
Yeah,
Mike:
28:55
they,
Nawid:
28:56
they do the kitchen. So they use the same we, we have, again, a preferred kitchen cabinet installer a wholesaler who actually imports the cabinets from China, he has a warehouse, then he takes it out to our properties, installs them, assembles them, installs them. We get a much better price than, going with a prefabricated type of a shop. And we just keep giving them work and they keep, giving us good discounts and deals.
Mike:
29:15
What's like your, what's a turnaround time that you're shooting for on a non crazy flip? Like a standard full renovation.
Nawid:
29:22
Yeah we just finished the cosmetic one in three weeks. So this, yeah, this was by cosmetic. We had to remark side the pool, re plaster the pool, paint, flooring, kitchen, cabinets, granite inside, outside paint, and all plumbing and electrical fixtures, all of it in three weeks,
Mike:
29:39
Wow. Okay. Pretty quick.
Nawid:
29:40
pretty fast. Yeah but it's again, the whole system is, they're been doing it for a while. So they know exactly how to approach it. It
Mike:
29:47
Yeah.
Nawid:
29:47
just works out well.
Mike:
29:48
What challenges did you face over the years as you built up that construction side of the business?
Nawid:
29:53
The finding good people, it's recently I was renovating my personal house and I've never built a pool before I've always renovated existing pools, but recently I built a pool and I went through, it almost took me back in time because I used to experience the same challenges with every single trade. I would bring in 10 plumbers, only one would stick, I would bring in 10 electricians, go through one after the other, until I landed the good one. And so finding good, reliable. Now there's obviously these big time companies that charge you an arm and a leg, but they are very reliable, but to turn a profit in a fix and flip business. You can't really go with the most expensive plumber, the most expensive electrician, the most expensive of these, you have to find that happy medium. Sometimes cheap is not good because they're unreliable. And so it's those I've realized that it's the smaller company, the owner operator with one or two different crews. One or two vans or trucks who is more hands on. So our electrician, for instance, is hands on. So he will drop off, or he will dispatch his crew, and then he will come back behind them and do the quality control. And he has maybe three or four vans, and he's very hands on. When you hire a big company, obviously there's a lot of different processes and paperwork, and they could be very efficient and systemized and whatnot, but you might also pay a lot more than the smaller electrician or plumber. So that's the thing. And sometimes there's a single man, a handyman type people, and those, we've had bad luck with those. One plumber who, Is he just needs his drug money or whatever his booze money And he will disappear on you for a week or two So those are also not good fits So it's that's been the challenge is finding good, reliable reasonably priced contractors.
Mike:
31:37
How do you vet them when you're thinking about hiring them for a job?
Nawid:
31:40
I typically so I used to do that myself before, and I would obviously meet them at the job site. And you can pretty much tell by a lot of things. Did they, were they there on time? Did they come to the property on time? Are they somewhat professional looking? Do they have a company shirt or do they have a Their information on their truck or van? Do they have their like workers compensation? Documents certificate of liability insurance on them or do they have a copy of it? There's a lot of these little things that you can pick up on contractors And then if you ask for a proposal, you can it's almost like an interview. Are they engaged? Are they asking certain questions that you think is pertinent to that property? And then how quickly do they turn around and send you their proposal? Some, I've met hundreds of contractors where they disappeared after meeting me at a property. I would not meet one of them at all. I've met a lot of people that came in. Really high, astronomically high. And then I would give them a, I'd say, Hey, this is too high. And then they would drop it in half. So that kind of tells you that there's dishonest people. And if they're going to do that, out of the gates. Then they could potentially, take advantage of you down the road. So there's a lot of little telltale signs of who's a good contractor, who is not. And so I've taken all of that into consideration but now my main project manager, he does that. He vets the new contractors and whatnot. I do a little bit of a search. He does some search to run some search too. And we just sent him the info. He just talks to them, and he had a knack for knowing, who is for real and who is not.
Mike:
33:05
Was your project manager in the construction business previously?
Nawid:
33:08
Yeah, he was in commercial construction, and he's been in construction his entire life.
Mike:
33:12
Wow. Okay. So he's got a good idea of if something's going along. Yeah. Okay. How did you find him or her?
Nawid:
33:17
He was yeah, he was working, so I had hired a GC to do a flip early on. This, and he's been with me for about seven years now. Two years into flipping I hired this GC, I gave him a house in Mandon, He was a little bit pricey, but you know, I was still going to make money at the end of the day. So I, I just, you know, um, the GC was, uh, one that did work for or he did at the time he was doing a lot of flips for American homes for rent. So he was turning a lot of, he was good volume. And and so I kinda I didn't poach him. I basically was at the job one day and he was working on, the current project manager. So he, he was working there and I just had a conversation with him. He's like, Hey, you know, if you have more work, you know, I'd like to take on more work independently, myself, outside of my arrangement with the GC. So I honored that, I gave him some work outside of that, and then one thing led to another, and he was basically running that whole house by himself under the GC, so he was the GC's right hand man. And so I, in a sense, he got a promotion out of it. Cause now he's managing eight to 10 projects at a time for us. That's how I found him. And the other one was the other two were just like, one of them was a tile guy who was doing the tile at my house. And then he asked me, Hey, I can do more than just tile. Let me like show. So he was our main tile guy and he ended up, bringing in more people and started to put together a team. And that was five, five, six years ago also. So I think loyalty is huge. I've stayed loyal to them. They've stayed loyal to me and to really build a business that lasts, you gotta have, good people, you gotta promote from within and keep people happy and they will keep you happy and successful.
Mike:
34:57
Yeah, and I know you were saying before you have a pro account with Home Depot and the project managers have access to it, but are you like all the materials you're covering or do the subs provide their rough materials or like, how does that all work?
Nawid:
35:11
So the subs provide their material, like electricians and the plumbers and the roofers. But the generalists that do the, the paint like I basically, the generalists are also in charge of the painting of the property, And all the rough and trim and all that, they also do the paint. So we have a Sheldon Williams account. Under my company, and then we also have a door Home Depot account, and so they just go in and and then we keep track of what, what's being bought for what property and it's it's pretty predictable at this point because we have, accounting sheets for each and every property. And so we keep track of what's being bought for each property. We do a once a month accounting And if any sort of anomalies and things like that, we catch it at that audit stage when we're auditing the purchases from home Now not to mention, i'm still one of the things that i'm still very involved in is the purchasing which is It's called text to confirm. So I get a text every time somebody is buying something at Home Depot and I can, I see who's buying what property they're buying for and what they're buying before approving it. So I can click on the link that I get a link and it shows me pictures and quantities of everything they're buying for which property. And so they can't really, obviously they know somebody who's watching, so it keeps them honest as well, which is
Mike:
36:21
Right,
Nawid:
36:21
of
Mike:
36:22
they can't check out with a new AC unit for themselves or whatever.
Nawid:
36:25
And sometimes if a property name is misspelled or if it's, if I don't recognize the person who is there at Home Depot shopping, then I don't approve that. And then I get a phone call from Home Depot saying, Hey, can you clean this up? There's so and maybe the name was inputted wrong in the text to confirm. we cleaned that up and then I approved it.
Mike:
36:44
gotcha. What are as you were like building the fix and flip business what are some things that looking back, like you might've done differently along the way?
Nawid:
36:52
We're like technologically a little bit, far behind, on the tech side, I would have probably improved some integrations on the accounting side of the bookkeeping side. And, we tried builder trends for a little bit to keep the team and everybody, engaged or, organized, but it was a hassle. Hands on type person. So I would have probably early on brought somebody in and created some systems and processes to where everything is communicating with each other. Everybody knows what everybody's doing. A software that is I don't even know if something like that exists. So for instance, we have a hard time, like we still have someone manually inputting all the data, like from the Sherwin Williams. It doesn't integrate with QuickBooks. So you have to go in for each and every property. Home Depot doesn't properly integrate with QuickBooks. So a software where it just pulls data from, expenses and everything, And from all the different places, utilities, like JEA doesn't have a way of integrating with your accounting sheets, right? So for wholesalers, cause we do wholesaling too, it's a lot easier. You have the marketing and then you have the assignment and that's it. But when it comes to flipping, managing, you've got holding costs, you have like lender costs, you have utilities, you have prorated property taxes, you have prorated insurance. You have different places. Amazon is a big, Amazon needs to integrate a bit of software. So it's a lot, if you're doing volume, having everything in one platform would be a huge lifesaver. I don't even know if something like that exists, but I would be willing to hire somebody to build that infrastructure out. To where, when an Amazon purchase is done, it automatically moves through into your accounting sheet for that property. When a Home Depot purchase is done, it automatically moves to where you have a real time accounting of what's happening with that property. Cause you got a lot of capital out. When you're, we don't borrow, we do hard money on our flips. But we don't borrow for construction. So when you have 20 properties under construction, we pay out 120, 000 a week to vendors and contractors. And it's a very capital intensive sort of a business. And sometimes, we're, houses are selling, closing, I'm feeling good. I feel, rich. Sometimes I feel broke, when nothing is selling, when the contracts are falling through, I still have to pay my guys.
Mike:
39:08
Yeah.
Nawid:
39:08
It's a pretty shitty feeling, and I, they don't know that because I can hide it really well. But one month we had two closings and we bought eight, So I was like, I sold two, bought eight. Those numbers don't look good. I'm still figuring out 80, a hundred thousand every week. So if we had a real time, like accounts receivable payable type, which integrated everything into one. That, that's the challenge that's the biggest challenge even now. And if somebody that watches this that has a program please, send me a, send me the link or the program and I'd love to sign up.
Mike:
39:39
Yeah. Yeah. It's funny you say that because I was doing a lot of wholesaling and then we started, flipping a while back and for the first like eight or 10 months I was flipping, I was telling my wife, I'm like, I feel like I'm broke. But I don't know. I have all I have all this stuff going. I feel like I should make you money, but every time I look at my bank balance, it's I sent 60, 000 out yesterday. Why do I feel like I have no money, even though I know I should, right? And then she went in and really just read actually set up QuickBooks and did it all right. And I was like, oh, okay, I'm not broke. Okay it's just
Nawid:
40:09
what do you do on your clips? Do you have a system figured out where, or do you just do like GC type method where you don't have the Home Depot accounts and the Sherwood Williams accounts? Yeah. And you just let them do the time and material and you just pay them and it
Mike:
40:22
Yeah, it's mostly the GC method, but we will sub some stuff out, like a roof or an AC. If the GC provides a quote on that, and I think we think it's a little just. Too much, we'll take we'll take that part off the scope of work, but really, I guess only a roof and an AC would be the things and then we will take care of the cleaning after. So it's not as much. Nearly as accounting for sure. But I was used to accounting from the wholesaling business, which is like, what was my marketing spend? And how many assignment fees did I make this month? It was a big change. Even when we did it.
Nawid:
40:51
that's good. That's that method is definitely a lot easier. And speaking of that, our third generalist is like that, where he gives us a quote for material and labor, and that makes life a lot easier. But, we still have to account for all the rest, plumbing, electrical, trash out, all the rest. He's strictly generalist, clean trash ads framing, painting, that sort of thing. So it still leaves
Mike:
41:17
absolutely. Do you prefer that, though? Or do you prefer to have it?
Nawid:
41:22
If I can get these if I can, in an ideal world, I would prefer that it's a lot, it makes the cost a lot more predictable, so I already know when the plumber and the electrician and whatnot, I, If you do something so many times and you have the same people doing the work for you, you I walk a job and I know how much the plumbing, how much the electrical and all that is going to be. And I guess the next challenge would be to find somebody, you don't, they say you don't have a business until the business is running itself and you take yourself out of it completely. So I still can't take myself out of the business. So it's, I'm still working in the business daily and that's the goal is to be able to create this sort of a machine where it just, even if it's doing 80 percent of what I'm doing, I'm happy by removing myself. And that's that's The real, the true goal and finance, the financial freedom goal that I have is to someday continue flipping and not be in it, maybe have a quick zoom meeting with the CEO or chief operating officer, CEO, or whatever you call it from somewhere in the world. From the beach somewhere And not,
Mike:
42:24
shows you your million dollar net profit P and L for that month. And then you say, thanks, do it
Nawid:
42:29
So
Mike:
42:30
Cool. I like it. We're getting close to the end here. And there's always two questions that I like to ask at the end. First is a fun one, which is what is the craziest or most uncomfortable situation that you have ever experienced in a real estate deal?
Nawid:
42:42
The most uncomfortable I would say was when I was very hands on with the foreclosure auctions, I would buy properties and then I would show up at the doorstep of the the property that I bought, obviously, so that the way the foreclosure auctions works and in Duval County, at least is. You win the auction the funds are due at 4:00 PM that day and you have to make A-A-A-C-H, batch payment. And then what happens is the 10 days later on the 11th day, you get certificate of title for that property. It gives the Duwell County courthouse. So that gives the sellers one last chance to. Appeal the you know the sale. So they can motion for something and they can basically delay that certificate of title from being issued while they hire attorneys and one, so most of the time that doesn't happen because they've had multiple chances during the foreclosure for foreclosure proceedings. But once you get the title, so on the 11th day, I would show up to the property. And people very respectfully and nicely basically come, we, I came to terms with them and said, Hey, we just bought this. I'm sure you're aware today was the auction day or 11 days ago was auction day. Here's a certificate of title. We're the legitimate owners of this property now. What's your situation, how when can you bake it? And so that was my, that's what I would present to the sellers with the occupants of this one. I call them occupants because they're living in my, and most of the times they would be understanding. They would want a week or two or three, as much as six weeks, we've given people two weeks. Six weeks, month and a half to move out. The crazy one was a lady in Arlington, she came out, she basically, started throwing things at me. Shoes, pots, pans. I left, I didn't want to confront her. I came back and this was on me, I shouldn't have come back I don't know at the time what to do, this was, as I mentioned earlier, I was doing the a lot of auctions early on in my career, I came back and she basically came out and and, drew a gun, she's get the F out of my property, this is not your property, this is my property, And at that point it was pretty crazy because I, she could have shot me because she has nothing to, she's lost the house clearly and she's got a gun. She's not afraid of shooting. She's not afraid of, so I, at that point I realized that it's not worth it. Let me just go and file for an eviction. So that was still something that, that's pretty fresh. And I still remember that when I go to some of these houses, I look around. Yeah. I don't do a lot of auctions anymore, but even if I did auctions, I would probably You know if they're being resistant and they say don't come back, you know, i'm not leaving I would have probably The lesson learned there is just leave And deal with it, legally, just file an eviction and let the law enforcement take matters into their hands as opposed to me. That was a, that was intense, I've seen some other scenarios where less severe, than attack my dogs and stuff, I've walked around houses and I've, I've been chased by people and, but that was the drawing of the gun was the most intense one that, that I've experienced.
Mike:
45:27
Is that how it works? If they don't leave, you actually have to file like an eviction
Nawid:
45:31
to, if you have a certificate of title and it is not a tenant that's living there, it's a homeowner then you can evict them, yes, just like anybody else, any other eviction. But if it's a tenant at your lease, then you have to, work around that lease a little bit.
Mike:
45:43
huh? I didn't realize
Nawid:
45:44
Yeah, the tenants have a better sort of a staying power than the homeowners.
Mike:
45:49
Sure.
Nawid:
45:49
The laws protect the tenants a little bit more than if you're a homeowner and you're being foreclosed on.
Mike:
45:54
Yeah. Is it still like a full eviction proceeding or is it, if you have the certificate of title, it's really just
Nawid:
45:59
Yeah, so just if the title's enough, you just, go. And I used to do that all myself. I didn't even hire an attorney. When you start out a business, you want to save as much as you possibly can. So when you're doing like one or two flips you my, my whole motivation is to maximize, to squeeze every little drop of juice out of the deal as possible. So I was going into the courthouse myself. I was filling the paperwork. I saw doing the eviction myself. I was doing everything. And you basically file a complaint and say, Hey, I bought this property from the auction. Certificate of title is attached. And I'm like, you pay the fees, file the eviction. If they, there's a hearing, if they obviously, the judge looks at it and says, we gotta have a hearing or whatever. If there's no hearing, then it just goes to the I read this then issue, you to pay the share of the fees and want to get that,
Mike:
46:42
Yeah that's an experience. I haven't had the gun
Nawid:
46:45
Yeah, I'm sure I've got drawn, if you're in real estate, you gotta take the best for the worst, yeah.
Mike:
46:50
well, second question I always like to ask, and for the kind of newer people listening to the show, which is if you could go back in time, give yourself one piece of advice when you were looking for your first deal, knowing what, now, what would you tell yourself?
Nawid:
47:02
As far as looking at a deal or as far as if you're getting into the, get getting into industry and how to navigate, the early
Mike:
47:09
Yeah, trying to navigate those early challenges and get the deal, not necessarily like evaluating the
Nawid:
47:14
yeah. Yeah. I would say I would seek a mentor over anything I know that the realtor that brought me my first deal was a great realtor, but he had no idea about the fix and flip side of the business. He was just an agent. So I would find someone when I'm analyzing a deal, if I'm just jumping in it's okay. I think, my, my biggest piece of advice for people is. First, you gotta at least learn a little bit, theoretical. Second, jump in, you can't jump in without learning the, ins and outs a little bit, a lot of times people do a lot of analysis for paralysis. They're really into books and seminars and reading and the education side, but they don't take action. For me, it's a balanced approach. Educate yourself to the level where you feel somewhat comfortable jumping in, then jump in and take on that first deal. I did the absolute opposite. I did the opposite. I'm like, okay I'm killing it as a car salesperson. I'm going to do just fine. I was cocky and, when I was a 20 year old, 20 something year old. I was, uh, I didn't seek any type of help from anybody. I would say, find somebody who's flipping. Even if you're analyzing a deal, you can JV with them early on. It's okay. It's just going to be a lot less stress on you. And if and they're just going to help you not lose money on your first deal. There's two types of investors. There's the ones that have done zero deals, and then there's the ones that have done a lot of deals in the course of their lifetimes. You won't find someone who's done one deal, usually people that do one deal do a lot of deals. Unless that deal is a bad deal, and then you get to Yeah, and then you exit it, you exit the market completely, so don't my, my advice is don't put yourself in that position to where your first deal is a bad deal and then you don't ever come back and that sort of, damages your confidence and possibly not just the confidence in real estate investing, flipping, wholesaling, whatever, but your confidence seeking other business ventures. Because confidence can go many ways.
Mike:
49:07
sure. That's a good piece of advice. People want to reach out to you after the show, Naweed. Maybe they have a a deal that they want to send over to you or maybe they have a solution to your accounting problem. How can they go about reaching out
Nawid:
49:18
That would be great. Yeah. They can my email is the best one. It's [email protected], so N-A-W-I-D at doby, D-O-O-R-B-I a.com. I'm also on Instagram, it's nai, REI, so N-A-W-I-D-R-E-I. They can reach me both via email, via Instagram.
Mike:
49:38
Cool. Awesome. This is great. Thanks for being on the show.
Nawid:
49:40
Appreciate it. Thank you, Mike.
