Dumb and Dumber Do Real Estate Development and Investing

[GoodluckChuck]

You might remember me from my last progress post about growing a marketing company from 0 to 12k per month back in 2019 or so. This company has continued to grow about 100% YOY with our peak in May at around 70k cash into the business.

The best part of this company is not the marketing or the money, its the opportunities that always seem to come out of nowhere. Often times they start off sounding super exciting and end up being nothing but other times they grow and evolve into really exciting deals.

The latest one has to do with real estate. A prolific real estate developer and investor was referred to me by his app development company as the goto guy for marketing construction businesses. This guy, whom I'll refer to from now on as my client, started a custom hole building company and wanted me to help generate business.Thats where we started.

When I got the referral back in February, I knew there was something here, I just didn't know what. Over the years I've learned to focus more on the people than the deals. When I meat someone I want to work with, I do whatever er it takes to work with them.

I had just moved to Mexico (permanently) but promptly flew back to the States to meet this guy in person. A little digging showed me that this has 1000's of real estate deals under his belt and I could get a full education just by helping this guy. The bonus is that he would pay to learn this stuff.

Upon meeting with him, he informed me that he had a special process for finding good real estate deals and moving them quickly. One of the pieces he has that many don't is that he often has buyers lined up before even buys a property. Besides helping him get Custom Home clients, he also wants an info business selling his secret techniques and ultimately become a big real estate guru like f
Grant Cardone.

I wasn't sure at first at the validity of this but I did what I needed to do in order to move things forward and develop the relationship. It wasn't long and he hired to help him with building out the info business and selling the product.

My time in the sauna is running out so I'll this first post here. Up next is an outline of the deals I've watched him make in the last two months and the partnership deal I made with him.

Bonus: I brought in another Fastlaner who is a close friend to be my partner in this.

Interesting things to come.

 

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[Strategery]

You might remember me from my last progress post about growing a marketing company from 0 to 12k per month back in 2019 or so. This company has continued to grow about 100% YOY with our peak in May at around 70k cash into the business.

The best part of this company is not the marketing or the money, its the opportunities that always seem to come out of nowhere. Often times they start off sounding super exciting and end up being nothing but other times they grow and evolve into really exciting deals.

The latest one has to do with real estate. A prolific real estate developer and investor was referred to me by his app development company as the goto guy for marketing construction businesses. This guy, whom I'll refer to from now on as my client, started a custom hole building company and wanted me to help generate business.Thats where we started.

When I got the referral back in February, I knew there was something here, I just didn't know what. Over the years I've learned to focus more on the people than the deals. When I meat someone I want to work with, I do whatever er it takes to work with them.

I had just moved to Mexico (permanently) but promptly flew back to the States to meet this guy in person. A little digging showed me that this has 1000's of real estate deals under his belt and I could get a full education just by helping this guy. The bonus is that he would pay to learn this stuff.

Upon meeting with him, he informed me that he had a special process for finding good real estate deals and moving them quickly. One of the pieces he has that many don't is that he often has buyers lined up before even buys a property. Besides helping him get Custom Home clients, he also wants an info business selling his secret techniques and ultimately become a big real estate guru like f
Grant Cardone.

I wasn't sure at first at the validity of this but I did what I needed to do in order to move things forward and develop the relationship. It wasn't long and he hired to help him with building out the info business and selling the product.

My time in the sauna is running out so I'll this first post here. Up next is an outline of the deals I've watched him make in the last two months and the partnership deal I made with him.

Bonus: I brought in another Fastlaner who is a close friend to be my partner in this.

Interesting things to come.

You’re a freakin’ winner Chuck. Bet I could guess who the partner is lol.. can’t wait to read more

 

[GoodluckChuck]

I started this thread in the sauna when I was excited but I'm going to try and keep it a bit more organized from here on out. I'll aim to do weekly updates as long as things keep moving as fast as they are. Let's start at the beginning, again.

The Beginning
I already mentioned that a client was referred to me because I run a marketing agency specializing in the construction industry but I didn't say how my friend came to be a part of this. It's important to understand how little planning went into this massive concoction of action that has come to be.

My friend also owns an online marketing agency but focuses on Youtube and video production. Part of my client's projects have a lot to do with Youtube and video so I brought my friend in to help with this part. About a month into the 3-month project I started talking about how I was going to go back to my hometown to work on this real estate stuff and get this info business off the ground. I mentioned that I could use help and that was all it took. The plan was formed that we would meet in my hometown as soon as I got back from Mexico.

My idea was simple. This guy wants to build an info product but he has no reputation or clout in the industry. He has been conducting thousands of deals in the shadows for over 30 years. In order to get his info products to a place where people would actually buy them, we needed a case study. What better way than to take my friend and I from 0 to crushing it with these deals? If we can document that whole journey, that becomes the marketing strategy. So, that was the plan...

Until the weekend when my friend was supposed to drive up, I wasn't even sure if he was going to show... I wasn't sure if this was even going to happen... It was just a matter of waiting and seeing who was ready to step up and how things unfolded.

I'll be honest. The day before he arrived I started having doubts.
"What if all of this is a waste of time?"
"What if we get scammed?"
"What if we bitch out after a week?"
"What if it's too hard?"

I think this little bitch voice is normal and just part of doing anything unknown. There are always doubts. Experience has taught me that doubts are a good sign that you are moving in the right direction. If you know for a fact you can achieve what you're setting out to achieve, then where is the growth going to come from? It's not... So these doubts were a good sign that this was something worth trying.

Guess what. He showed up right on time - ready to rock and F*cking roll.

P.S. He has been sleeping in a tent in my backyard for 2 weeks. Hardcore. Also, the friend is @BigRomeDawg, a long-time member of this forum. I'll just call him R from now on.

Also, I'll call the client "our mentor" because that's what he has become.

Week 1 - No Clue What We're Doing
By the time we started, we both had like a 10% idea of wtf was going on. By this time I had filmed a handful of videos with our mentor and R had edited them so we had an idea of what he was doing but actually executing is so much harder when you get into the details. There are so many details...

Week 1 was like getting shot in the face with a firehose of information. We spent our time around the clock scouring the training materials our mentor had put together and doing our own research. The cool thing is that both of us have a ton of experience with online tools and workflows so we are able to do things much faster and more efficiently than the people that came before us.

Week 1 was about two things:
1. Figuring out how we were going to work with our mentor to build out the info business.
2. Finding real estate deals to execute together and prove the concept.

I know a lot of people are going to ask what, exactly, we are doing. I can't give away any proprietary information at the moment so all I will say is that we are finding opportunities to buy properties for much less than they are worth in the right hands. It's a game as old as real estate and we're playing it. We're just doing it differently than most other people.

I would say the biggest progress we made in the first week is putting together lists of opportunities. The first thing I did was hire another Filipina VA to manually hunt online for deals. I have been hiring foreigners at my agency for years so I have a very good process I follow. I had a few leftover candidates for the Executive Assistant I just hired so I grabbed the next one on the list and hired her. She has been an absolute rockstar and I have high hopes for her. She is young, hungry, and extremely capable of teaching herself stuff. Perfect for this role.

R quickly got to work using paid tools like Pipestream and Zillow to find more opportunities. We knew that eventually we would end up on the streets knocking but we wanted to make as much progress on screens as we could because there's a lot of leverage there. We compiled lists from all over the place to try and spy some deals that others might have missed. We looked at foreclosures, expired listings, active listings, etc. We also started building a database and figuring out how we were going to organize and interact with this data. R is very good at this kind of thing, luckily.

By the end of the week, we had lists of a couple thousand properties. Were they all good? Not sure, but we had something to go off of. We also had about a 20% idea of wtf was going on and how we were going to turn this into an info product that people could get through and actually execute. No offense to most people, but most people can't take a tiny bit of information and blow through the smoke with massive action like we have. It takes a lot of dedication and belief. Luckily for us, we had an extra boost in our beliefs because we had watched our mentor execute a couple deals in real-time... Belief can be EVERYTHING. With it, a man can hike 100 miles through mountains to get to water. Without it, a man can die 100 feet from the stream.

Week 1 Summary

• -$800
• No Prospects
• No Deals
• R still in a tent

Week 2 - Who Not How
The 2nd week was just a continuation and build off of the first week. We got better at sniffing out deals and we were getting more clear on wtf this whole process is so we could help our mentor package it in a way that's trainable. The reason he couldn't do this himself is because he's been doing this for 30 years. He has what I call "The Curse of Knowledge". Things that are obvious to him, other people have never even heard about. His manuals are chocked full of nuggets but the average person is going to give up early... It's just not easy, simple, and clear enough yet.

Who Not How
The theme of this week was "Who not How". A big part of real estate investing and development is working with other people. When we find a property we think we want to buy, we need a lot of help. We need:

• real estate agents
• lenders (institutional and hard money)
• buyers
• surveyors
• contractors
• city planners

It's a great lesson in operating under the "Who not How" mentality. As business owners, it's easy to get stuck in a place where we think we have to, or should do, everything ourselves, but with this sort of venture, that's literally impossible. So, we networked.

Bonus: Who Not How is a great book you should read if you are running a business.

We went down to the city planner's office and talked to the people there. We ran through scenarios with them and they helped us understand the local zoning codes and what we could do and could not do. This is mission-critical information and if you aren't willing to go to the source, forget about it. It's different in every city.

For someone that used to be afraid to get on the phone and talk to strangers, it's nice to see how far I've come. the 1000's of sales calls I did for my agency have turned me into a charismatic talking machine. I can't emphasize how important it is to do sales... a lot! It's one of the most important skills you can have if you want to make a shit load of money. Sure, there are people who helped program Etherium that might suck at sales but there are way more people who are good at sales and are rich than the other way around.

Getting Access to Information We Couldn't Get on Our Own
As far as finding properties that were on the market, foreclosed, etc. we had to rely on the tools I mentioned earlier. I even considered getting my real estate license so I could get access to the MLS. That comes with strings attached, however, so I tried to find another way.

I think it was around day 10 that I went and met with a local realtor. He has been a family friend for a long time so I trusted him with some of the inside info that helped me explain the deals I am trying to make. Through him, I am able to get access to every new listing that hits the market on a daily basis. Now, I don't need to have a license to keep an eye on new listings... Great! I just saved myself like 80 hours and I don't have to put my clients' interests ahead of my own because I am my own client. Perfect.

By the end of this week we were starting to build a network of people who could help us move things forward. It's so damn important to have good relationships with these people. Make an enemy at the planners office and you might be totally screwed... But, if they are your friends, then you are going to have a much easier time doing what you're trying to do. When we went down to meet them the first time, I even brought my cute dog in for extra brownie points... It worked... Not pulling any punches.

The best thing about this week was when R busted out Zillow and randomly picked an active listing that turned out to be just the kind of opportunity we were looking for. When we showed it to our mentor, he remembered seeing this listing a year ago but didn't move on it because it was priced too high. Well, the price has come down a lot and it's still on the market. We went and did our due diligence and figured, on our own, that it was worth him coming to look at.

After reviewing the property with him, we decided it was worth moving forward to the next steps of seeing if we can make this thing happen. We're waiting on a third party to tell us whether or not we can move forward on that one but it was really great for our momentum and spirits.

Week 2 Summary

• -$1450
• 1 Prospect
• No Deals
• R is still in a tent in my backyard (he says he likes it...)

 

[GoodluckChuck]

Week 3 - Hitting the Streets
Midway into week three we had exhausted what we could do from a computer. We had a list of the properties we wanted to buy, we just needed to figure out how to buy them. We aren't the only ones doing this so we looked at our competitors. Here's what everyone else is doing:

• Sending mailers
• Cold calling
• Cold emails

We could do any of those but the problem is they take time and money. So, we skipped straight to the fastest and most difficult way to get these buyers... Door to door sales, or as I like to call it sometimes, door to door snails. We aren't going door to door. We are driving door to door. These properties are scattered. We don't want to just buy anything. We have a specific agenda.

This is the first time R and I have ever done door knocking. We really didn't know what to expect. People told us that we would need to knock 100 doors to get an opportunity. A trusted advisor told us we would need to put in 100 offers to get a deal. These are big numbers so we got busy.
---
The first 50 knocks were pretty haggard. We had no clue what we were doing. We didn't even know what we would do when someone said yes. Literally we were wondering "What are we supposed to do?"

That didn't stop us. We could have sat around strategizing but we said F*ck it, let's just do it.

The day we went out knocking we got like 3 opps out of like 20 knocks. "Umm what!?" That is a way better conversion rate that we thought. We went out the very first night and knocked 3 doors and 1 was a solid opp. We were blown away and very encouraged. 1/3 ain't bad!

The week ended with some solid morale. We were fired up and ready to knock as many doors as we needed to to get the deals we're after.

Week 4 - The Dessert of Desolation
During the fourth week, things took a small turn for the worse. We were knocking and getting opps but they weren't going anywhere. One Saturday we went out and knocked a bunch of doors and talked to like 1/20 of them. The only lead we got was some chick who's dog almost mauled me when I was picking up a Lime scooter in front of her house.

Side note: I always pick up Lime scooters when I see them knocked offer. I think it's trashy to knock those things over and I can't stand seeing them laying on their side. So, I went to pick one up and this big a$$ dog nearly jumped the fence and scared the crap out of me. A lady walked out of the house and asked me what I was doing. I explained that I saw this shitty house next-door and was curious what was going on. She filled me in on the details and told me she was looking to sell her house too. Neither of these were deals we were looking for but they were both total flip opportunities. I call these the Lime Scooter Leads. haha. I believe that if you have good karma, good things happen so if you see a lime scooter on it's side, pick it up for pete sake.

So, Saturday kind of sucked. We went out Monday night and Tuesday night and though we were coming up with an opportunity here and there, it was starting to drag on us. We are used to instant gratification and it has been nearly a month and we haven't got shit. At this point Roman and I both started to waver a bit.

My response to this negative sentiment was to go to my office and write out the next 5 steps. Step 1 was simple. Get a deal. I wasn't going to make that my goal, though. I like to keep my goals action-oriented. So, I made my first goal: Knock 250 doors.

I figured 250 doors is a good enough sample size for what we're doing. With the ~10% opp rate from knocking, this would be 25 opps. If we can't get 1 solid deal out of 25 deals, then I would need to reassess this entire plan. After all, I have a marketing agency that would benefit from my time and devotion.

Week 4: Wednesday - Exit the Dessert of Desolation
It's Wednesday morning and R and I are at the coffee shop / coworking space we work from at 7am. R looks over at me and he says "A great deal just popped up on Zillow. It was just listed 40 minutes ago."
Before he said another word, he had fired an email off to our partner and agent.

I took a look at the property and recognized it immediately. This is a door we had knocked twice the week before. Holy shit! What are the chances? It's the perfect setup for the real estate development we do and it's in a nice area. It's also priced well below market price.. WTF!?

Roman blew up our partner / agent for the next 20 minutes until we got a response. We know we have to move fast so let's go boys! Because of the firm pressing we got an appointment to view the house 2 hours later. We rolled out to the property and did our usual walkthrough. 5 minutes in, our mentor turns to me and says, "I don't need to see anymore. We need to get an offer in and secure this property."

We spent maybe 15 minutes at the property before leaving and heading to another property to shoot a video. At the 2nd property, we got to listen to the realtor work his negotiating magic. He was a wizard on the phone talking to the other agent. It was amazing to witness.

R and I went on with our day and continued with the mission. We need 250 knocks and that's 25 per day. So, we went knocking. It doesn't matter that a deal is in the works, we don't want one deal, we want 100.

About 2 hours into knocking, R rolls down the window and yells, "We got it!". There I was standing on some random person's front porch doing a little celebration dance. WE GOT OUR FIRST DEAL!

The coolest part of this deal is not that we stand to collectively make 150k+ from it in ~3 months. The cool part to me is the negotiation that took place.

There were 5 offers in on this house. 2 of them were up to 30k over our offer, cash. We still got the deal because the owner was more certain that we would actually close the deal. Why? Because the terms were better for them.
The terms:

• 20k earnest money released within 2 business days into the seller's pocket, no contingencies
• The owner lives in France and needed until 9/1 to get some stuff out of the house - we agreed to close the deal on 8/15 and give her a free month of rent so she has until 9/15 until we take full possession of the home.
• No inspections

Because of these terms, the selling party felt that our deal was most likely to close and with as little headache as possible. This is why we were able to buy this property for 30k less than the next offer... Amazing.

This deal was the shot in the arm we needed. It's funny that it happens to happen on Day 30 of our adventure. To get our first deal in 30 days is actually impressive and surprising to me. We lost perspective a couple of times because we were in the weeds and we weren't getting any feedback. This is exactly what MJ talks about in TFF. The Dessert of Desolation. Lucky for us, the dessert only lasted a few days.

We do not know what is to come but we are pressing forward at full blast. We have 4 other hot deals we are working on closing this next week. I wouldn't be surprised if 0 of them worked out or if all 4 of them worked out. That's the numbers game. I don't even care. My only focus is getting through those 250 knocks. One step at a time.

Lessons learned this week:

• It's a numbers game and if you want 2x results, you might have to do 10x the work. It's so easy to underestimate how much work it will take so I'm aiming to stack all the cards in my favor and max out what I can do. The next step is to scale with leverage and 100x what is being done by other people all aimed at achieving my goals.
• Knocking doors is the best way to get customers and deals. Nobody these days seems to want to do it which is why it's so effective. I'm looking at all the options I have in various ventures and am starting to think it's smart to start with the hardest choice because I know nobody else is doing it. Less competition = good.
• When things get rough, it's important to just keep going. I think it's really valuable to map out the next few steps and focus on the 1 that is right in front of you. It makes it a lot simpler and easier to manage when you just need to do one thing. When Im thinking about all the things that need to happen, I get overwhelmed and frozen by choices.
• There are an infinite number of ways to make a deal work. It's all about people involved. Money is not the main factor a lot of the times. If you can find a deal that navigates the variables, you can make it happen.
• Massive action will overcome lack of knowledge and experience.

Week 3+4 Summary

• -$10000 (8k earnest money)
• 4 Hot Prospects (~8 regular prospects)
• 1 Deal
• R is still in a tent in my backyard (he says he likes it... still)

 

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