Getting Started with No Cash to 30+ Deals Per Year and “Free Houses” with Jared Holland

Brandon: Jared, welcome to the Bigger Pockets Podcast, man. Good to have you here.

Jared: Thank you so much. I’m excited to be here.

Brandon: All right. So let’s get into this thing. Let’s go into your story. How did you get into real estate investing? What was that very first journey, well, that early journey look like into your first deal?

Jared: For me, it kind of, I fell into it a little bit. I guess my background has been in construction my entire adult life. So my very first I guess brushing with investing is when I had a painting franchise and I was painting some nice houses in Mercer Island out in an affluent part near Seattle. I was talking to the homeowners and they were telling me that their neighbor across the street had just sold their home that they’d only owned for I think a year or two. They were renovating theirs to sell it.

Jared: They told me, basically their neighbor made about $200,000 plus just on a really quick sale. So at that point, that was when I even first realized, I guess what real estate was kind of as a profession. After that I kind of got the bug and just started learning as much as I could and went into the industry.

Brandon: All right. So walk us through the very first deal. The first one you did like your business, your flip or whatever you did. Was it a flip, was it rental?

Jared: No. I do primarily now, but my very first deal was a wholesale deal. So I guess I can give you maybe a little bit more background on getting into real estate also. So actually after that again, I had never even seen real estate. I didn’t know what it was. I didn’t really know anything about it. I know a lot about construction though. So that gave me kind of confidence moving forward. When I first kind of realized real estate was a thing, I invested in a mentorship program. Like a good amount of people do.

Jared: Then it was a year of learning before I actually really got much traction. So it was about maybe eight months or so and I joined the mentorship program, started just drinking from a fire hose, basically learning as much as I could, networking kind of doing all that stuff. Then the first properties I actually got under contract was actually through a hedge fund and it was through just a really random connection and they gave me three houses, basically the worst houses that they could possibly find. They were like, “You can take these houses and see what you can do here.”

Jared: I got three houses under contract. Then I just, man, I tried really hard to sell all three. I was able to get one of them sold. So one of the three ended up being sold and I ended up wholesaling it to an investor that I know now and I’ve actually done a bunch of deals with her since then.

Brandon: That’s cool. Okay. So you got these things. Why wholesale to begin? I mean, in that in paid mentorship you did that, was that focused on wholesaling or were you just like, “Hey, that’s the only thing I can do because of lack of money,” or what made that choice?

Jared: For me, my end game was always flipping. I always wanted to do a development and flip houses and from my background in construction, it just felt like a good transition. But wholesaling like everybody says that’s the best place to start. You can get into it, you can learn a lot about the industry with little risk. For me, that was just the best place to start. You can actually understand the process of buying and selling a house. You’re going to be meeting with sellers. You figure out actually how to put together an estimate and repairs for a property also. It’s kind of a natural progression to be able to get into actually doing bigger things.

Brandon: Okay. All right. That’s cool. So walk us through what happened next.

Jared: With that one deal, because that one’s kind of boring. My very first deal I only made 1000 bucks on. But at that point though, I mean $1,000 is $1,000. Right? At that point, that’s when it becomes real though. Up until then you’re chasing this mythical industry, thinking that you can make all of this money and do these deals and these great things, but until you actually get one done, it feels like, man, you’re just running up this hill that never ends. Just really trying to like, get your bearings and see again if it’s even real. So I would say that was probably the biggest, coolest thing for me is getting that first deal done. Just like it lets you realize, “Holy crap man, I can do this. Anybody can do this. It’s just keep pushing.” When it finally comes together, I think that’s the most exciting part for sure.

Brandon: That’s awesome, man.

David: What would you say was the biggest key contributor to you getting that first deal?

Jared: The biggest key thing would be, honestly just persisting like through everything. So like I sent out a ton of direct mail and to be honest, the first property I ever got under contract, I had no right having under contract. Like I ended up getting a commercial development deal under contract for my very first deal. That was something that I was just sending out direct mail and meeting with sellers and just super excited and kind of the fake it till you make it thing. It’s like, “Oh yeah, I can do this. I can do it, I can sell that commercial development deal.”

Jared: Just pushing past all those failures and like realizing, “Okay, well this one didn’t work out. Let’s keep moving forward.” Then just not giving up, man. I tried to sell the house. I had three of them. So I was trying to sell these three properties from a hedge fund that everything was supposed to go perfectly. “Oh here, you guys name your prices,” is how it started. I was like, “Oh great, this hedge fund is going to give me these properties and I get to just pick how much I pay for all of them.”

Jared: So it seemed like this beautiful scenario. I wrote offers on all of them. They came back about 10% plus higher, I think on all of them. Anywhere from 20 grand to about $60,000 higher, which basically killed all three almost. It was tough though, man. Like trying to sell these properties. I met a bunch of cool investors doing it, which was amazing. But just making sure to keep pushing forward when you keep getting no after, no after no and you can’t figure out why it doesn’t work because in your mind you have a unicorn. “Man, this is the best deal out there.”

David: Here’s why I asked that question. I want to dig a little bit deeper if that’s okay. We tend to look at the results and just focus on did we get it or not? The advice is usually, “Well, just keep trying, keep persisting, keep going. Eventually you’re going to get it.” But that’s not a very strategic approach to what you’re trying to do. So like Brandon the other day was asking me like how I’ve been losing weight and doing better. The reality is I am eating better, but I wasn’t able to eat better until I started working out and it made me feel healthier and I didn’t want bad food as much. Now I’m seeing, okay, it started with working out which led to eating better, which led to the result. So if I want a better result, I need to trace it back to the very first step to take.

David: But we often don’t take the time to kind of reverse engineer how we got where we got. So you got this first deal from sending out direct mail, but I bet if you like really look at the thing, you’ll see, “Well, I went to this meeting, I met this person, they said this thing. I saw how they did it, it helped me go do it.” For the newbies that are out there that are struggling getting that first deal, can you kind of pick apart, maybe reverse engineer the steps you took to get that deal under contract and then we’ll jump back in and say like, okay, once you had that deal where you took your career?

Jared: Yeah. Okay. That’s a fantastic question actually. Because you’re right, you just say just keep pushing forward and you are pushing forward, but you’re changing a lot of things as you continue to move forward. I would say for maybe the first contract might be a better opportunity since the first deal that I actually got was through a hedge fund and it wasn’t kind of the same situation that you do when you’re sending mail or you’re meeting with sellers. Maybe for the first contract I would say, it’s definitely a lot of trial and error.

Jared: I met with a lot of different people before I finally was able to get a contract. So my biggest thing was, yes you’re persevering. But after each failure you got to step back and reflect on exactly what you could’ve done differently to be able to make that a success. So like I would meet with a lot of sellers and kind of fumble through things and not know exactly what to say. So I would go to an appointment. First of all, you need to have some sort of structure when you go meet with these people.

Jared: So I have like seller lead sheets that I work through and you ask specific questions, make sure you ask all of these probing things because you’re working towards buying their house. So getting the correct information and then working with them through that appointment to obviously you’re building rapport and you’re doing all of these things to get a good relationship with them. Once I was able to do that a few times and understand the process a little bit better, then after each appointment, I would be able to get a little bit further.

Jared: I maybe didn’t even get a contract presented for the first several times I went to meet with a seller because I was too scared and I didn’t understand like what to say. But the next time I would get a little bit further and then by the time I was finally ready to actually present a contract, I was confident and understanding the process. I had seen, “Okay, what do you do once you get a contract? What’s the next step after that?” Like I have no idea. I’ve never bought a house before. Right.

Jared: So making relationships with title companies and escrow and understanding, “Okay, well once I have a contract then what do I do.” “Oh I have to put earnest money down.” “Oh then what do I do.” Then bring it to the title company and you go through this whole process and until you understand all of that, it’s a lot harder to make that connection with the seller and show them, “Hey, this is the process we’re going to work through.

David: That just came up at a meetup that I was doing in San Mateo the other night. Someone asked me a question about debt to income ratios. So, if I buy a rental property, can I still get a loan for a house? I realized there’s so many people that are trying to understand all of that stuff before they start taking the steps when the reality is what that person should’ve done was call a lender and ask that question to the lender. When they say, “No, you can’t get the house.” You should say, “Okay, why not? What would I have to do so I could? Walk me through your criteria. Walk me through the matrix that you use to make a decision.” That’s how you learned about lending. You do the same thing with the title company. “Hey, tell me what title insurance is. What does that mean? What am I paying for?”

David: Of course, they’re going to tell you, they’re charging you to do that work. You’re going to learn a bunch about title, it’s going to increase your confidence. Then I think that’s what you’re saying. That translates into the conversation that you have with the seller. So you’re walking in there assertive and knowing what you want to do instead of, “I know I’m trying to get this thing under contract, but I don’t know what to do with it after.” Naturally that’s going to affect like the confidence that you have or how bold you’ll be.

Jared: Yeah, that’s exactly right. Again, it takes a lot of trial and error just like anything else. But once you understand the full process and you see, “Okay, well this is where it starts and this is where I’m actually going to finish by buying the property.” Then that translates to the seller also and it just gives you a lot more confidence with them and you’re able to get a contract signed. I remember the day that I left, I met these sellers at a McDonald’s in south Seattle, funniest thing.

Jared: There were nine people who owned the property. So coordinating signatures for that was really difficult. I remember when I got that contract signed, I was so happy and excited. I blasted out to the world. I’m a real estate investor. That first contract is so exciting. I worked on it for a really long time and to be honest, I made some really good connections to developers. But yeah, that one didn’t pan out, but one of the best learning lessons getting started in the industry for sure.

Brandon: So walk us through the beginning few years or a few months, I want to get like an overview of how you got into this. You started with that first deal, what came next in terms of deals? How were you getting them? How many were you doing? Were you working at a job during this time? I know that’s a broad question, but I want to just get a good picture of what that was like when you were getting started and when was that as well?

Jared: Totally. So, I’m going into your five right now. So I started my company officially the very end of 2013 is when I created the business. For me, the number one thing that I knew is that I had to market to find properties. So literally like, as soon as I formed my company, very end of 2013, I immediately started sending direct mail. Literally like before I really even had my name picked out, like just right away I was like, “Okay, well how do I find deals? So I can’t remember, I think I pulled the list from like ListSource, something like that. It wasn’t a very big list, but it was high equity, non owner occupied, like probably the most saturated list out there.

Jared: I started handwriting letters, 50 a week is what I started at. At that time, man, I was getting like four and a half percent response rate. It was fantastic. I couldn’t believe it. When that phone started ringing again, it was so exciting that it’s just this crazy emotion of, this can really work. Those were the small things that really keep you motivated at the beginning. Like, just getting actually traction throughout the process. That’s where I got that commercial lead from.

Jared: I still have calls that I generate from that original lists or those original mailings. So I started there and at that point, so I had quit my painting company. I did painting franchise and I did that for one year and I was riding this incredible high end. That’s when I just kind of doubled down on myself. Again, real estate was new for me. I spent more on that mentorship program that I should have and I’ve put me in an uncomfortable situation, but I think you have to be uncomfortable to make big moves and really push yourself beyond your limits.

Jared: I thought I was going to be flipping a house within a couple months. Turns out that’s not the case. I ended up spending, like I said, about eight months or so learning and I went back and ran my painting company the second year. So this was then 2014, I finished it and then I almost doubled my business with the painting company and I had enough cash in the bank at that point to like be comfortable and like really figure things out. So 2014, very end of 2014 or early 2015 I think is when I went full time.

Jared: So I, when I first decided to go into real estate, I also got my brokers license. So that was again, I just wanted to learn. Like I didn’t understand the terminology of real estate. Like it was a foreign thing for me. So I got my broker’s license and then I hung it a year later. So I did it just to learn. Then in 2015 is when I hung it and I went full time. At that point, I think I’d only done one wholesale deal. I had met with sellers a bunch of times. I had learned a lot. I was networking two to three times a month even.

Jared: I was building the buyer’s list, all the things that they say to do when you’re getting started. Just get out there, network, meet the right people, look for buyers, try to find contractors. Just I’m trying to do everything at once. Then it really took off when I went full time. So basically the year I went full time, I did a couple transactions just as a traditional broker just to kind of again, learn the process, understand this is what a transaction should look like.

Jared: Then after that I was like, “Okay, this is it. Now it’s full time investing. So once I decided to just really hone in on that, I was still sending direct mail, still networking. My first flip that I ever got. I like to joke and say I am able to get free houses. So in my career I’ve gotten maybe about 10 of these free houses.

Brandon: Explain that.

Jared: A free house is, it’s a seller financing deal essentially. But when I first got started, I had no money really to speak of and so I was able to negotiate deals to have 100% free from the seller, no money deposit to them at all. I had them pay for the carrying costs, taxes, all their own closing costs, everything. Then I borrowed the money to do the renovations, so absolutely zero money out of my own pocket and the sellers were stoked. Also, it ended up being really good deals for them too.

Brandon: Why would the seller do that? Why would somebody sell their house and then have to not get any money? I mean, like right away.

Jared: Every situation is going to be different. So I’ll tell you the first flip that I did. First ever flip I did was down in Tacoma. It was not technically a duplex, but it was set up as a duplex. I met these sellers through direct mail. I met with them. I got this under contract to wholesale. They just didn’t want to list it. They were like, the house it was an okay shape. It wasn’t like most of my projects are now. But it was like really cosmetic and they just didn’t want to list it. They didn’t want to deal with the process. They just wanted an easy sale.

Jared: They were just done with it. Then when I wasn’t able to wholesale it, I was like, “I know this is a deal. I guarantee this is a deal. So I went back to the sellers. I was like, “Hey, let me flip your house.” I was like, “I can get this done for you. I know that there is money to be made here for both of us and I can do this for you. I will finance the renovation.” I had no money to finance the renovation, but I knew I would find that money. So, I told them I’ll do everything for you. I’ll list it when we’re done and it’ll take maybe three or four weeks max to renovate the house. Then we’ll list it and it’ll sell really quick.

Jared: So, they said, “Yes. I put together this hodgepodge contract of lease options/ purchase and sale agreement/ no idea what I was doing. But they were happy with it, so they did everything. They signed it all. They continued to pay the mortgage payments and then I partnered with another investor, which is something that I definitely recommend to anyone who’s new and that doesn’t understand the process of a flip. I did that and then we both put in, I think it was like $12,000 each, something like that.

Jared: I borrowed it from a friend, they finance their side and then it was super cosmetic renovation. Like we just did hardware paint. I had to fix a portion of a roof and just a bunch of little miscellaneous things. Then listed it and sold it within a couple of weeks and first flip was done after that.

Brandon: That’s cool. All right, so the seller financing angle, I mean, I talk a lot about seller financing because that’s how I bought my first apartment complex. I mean that was also a smorgasbord of different creative things, but like that’s how I bought my mobile home park recently. I really liked seller financing where the seller carries the contract. For those who don’t know what that means. The best way I can explain it in like simple terms is imagine you wanted to sell your car to your brother and your brother didn’t have any money, so you give him the car and then he makes payments to you.

Brandon: You sell it for 5,000, but he just pays 500 bucks a month for the next 10 months. Like that seller financing and people seem to understand that with cars. But then when you get to houses, they say, “Wait, I don’t understand seller financing.” Same thing.

David: Isn’t that Funny? It’s the same way with the buy strategy. “Wait, wait, wait, what do you mean you don’t use a loan when you buy the house. You get it later.” But if you turn it into a car, they’re like, “Oh, I could go take a note on a car that’s paid off. Yeah, I get that.”

Brandon: Yeah, exactly. Same thing. Exactly. It’s like people understand the car thing much easier. All right. So I love that strategy. That’s super cool. I think more people should ask about that. I did this study now, it’s been a few years since I did this research. It might be a slightly different today, but back when I wrote the book on Investing in Real Estate with No Money Down, I had done research that showed that it was a third of all houses in America were owned free and clear. It was like a third. It was crazy.

Brandon: Which means that those are all good opportunities for seller financing. Even if it’s not owned free and clear, like you said, you can do a wrap, you can do a lease option, you can do a subject too. There’s a lot of different ways to do it. The key though with all of that is you got to get a good deal that you could actually make money on if you’re going to flip it. If you can’t resell it, then you’re going to be in trouble. But the foundation, I said this a lot. The foundation of creative investing is getting a great deal, which clearly you did there.

Brandon: Now I want to go back real quick. I’m curious, looking at that period of time, which it sounds like, correct me if I’m wrong here, it sounds like it was a couple of years between I paid for this mentorship where I got excited about real estate and now I’m full time. I’m actually doing this, I’m a real investor, I’m doing this. There was like [inaudible 00:21:10] the time period. If you are looking back on that, giving yourself advice, you’ve got a time machine, you gave yourself advice during that period, like the beginning of that period, what would you tell yourself to shorten that period?

Brandon: So you didn’t waste or not even waste, I don’t call it waste, because you were working, you were networking. What would you do differently if you give yourself some advice from the start of that? Does that make sense?

Jared: Yeah. No, totally. For me, it was about a year. So it was like a year solid of like just trying to learn and really get into it. So I would say, I kind of appreciate that it took me a little bit of time because I know how difficult it is to get to that point. But I think if I were able to accelerate it quicker, I would say to spend more time finding someone that I could have more as not like maybe a weekly mentor, but someone that I could help more to be able to help me. Because you need to add value to other people also. I think I did a really, really good job of networking and meeting a lot of people.

Jared: But me just as a person, I suck at asking for help unless apparently I pay for it, then I’ll ask for it. But in terms of finding the right connections to be able to help kind of grow together, I think I would’ve found someone in the industry that was already successful at doing this, which I met a lot of people like that and just maybe try a little bit harder to really add value to their business or help bring them deals or whatever it is they were looking for.

Jared: I think that would have accelerated quite a bit for me. But because I’m someone that I just really wanted to do it myself and I was like, “Oh, I can just do this on my own.” It definitely took me a little bit longer to really get my bearings and kind of push into the industry. So yeah, I would say finding a solid investor/ mentor/ best friend.

Brandon: Nice. I met this guy the other day here in Maui. We ran into each other and he’s a Bigger Pockets guy. He got his start. He’s flipping houses in L.A. His name is Alex, so what’s up Alex? So he just flipping houses in L.A. The way he got started was by like working for a big flipper where he basically was going on like door knocking and like just really like the hitting the ground, like getting deals. Then eventually he got to the point where he was out there he understood it.

Brandon: Then he went and worked for another investor where he got a piece of the equity in the flips and then he did like 60 flips for this guy where he got like, I don’t know what it was, 25% or something like that or whatever they did, but they work together. So it was almost like he was a part owner in those and then just recently went on his own now and has done a handful of deals on his own and he’s going full time now. I love that progression. Not that everyone has to do that, but he’s like, rather than just like, “I don’t know what I’m doing. I’m doing this.” Like he’s like, “I’m going to learn from people who are just like the best that are already doing it. I’m going to take my steps up.”

Brandon: I just thought that was super cool. So, it’s kind of it sounds like you’re saying, is find somebody that you can meet regularly with, mentor from if it’s working for them or if it’s being a partner with them, whatever. It’s just growing along someone else who’s been there.

Jared: That’s the best way for sure. I think actually you gain traction a lot faster in this business, but again, it’s a fine line. Because I have people that call me all the time and they’re just like, “Hey, teach me.” I’m like, “Just go ahead and teach you real quick.” There has to be that give and take to it also, which it’s difficult to find that good balance, but if you do, man, you just hang onto that and you just be a sponge and learn as much as you can because then when you really do decide to make that leap and go all in, you’re the person supporting yourself. So you know what you’re doing.

David: Well, for a long time that the world’s been spinning, that’s exactly how people learn new trades is they were an apprentice and they worked for somebody else for free and they got an education and then they were valuable enough that they could get a piece and they became an employee and then eventually they became a partner. Then if they were really good, they would take the business over or they would go leave and do their own thing. That’s really the best way to learn anything. It’s just kind of in the society we live in now, we’ve got these concepts like minimum wage and labor laws.

David: So people feel like if they’re working for free, they’re being taken advantage of. But in reality, you’re getting way more from an on the job training than most people probably get paying for education at a college. There’s people that will pay $100,000 to get a four year degree. It’s something that may or may not make them money, but they wouldn’t give up four years of their life to apprentice and learn that trade. When they’re done, they’re crushing it selling tons of houses.

Brandon: Exactly.

David: Can you give us an overview of like how many houses are you selling a month right now? Are they wholesale? Are they flipping? Like what’s an overview of your business right now?

Jared: So my business right now, so I have the brokers side that I’m currently building out. So I have two buyer’s agents on my team. I then have my flipping business, which I’m shooting to purchase around 30 this year flips. Then I have my general contracting business, which is kind of starting to go hand in hand, kind of with everything else as I I grow. So, in terms of properties per month, I’m doing a few traditional transactions right now. Then right now I have six houses for sale. I have one that’s closing tomorrow, which is cool.

Jared: I had one that was sold last week. I’m looking to buy three more houses to flip. Then I also have a six unit townhouse development, which I’m really excited about. I’m looking to break ground on that in about a month, now Seattle.

Brandon: That’s awesome. ll right, I mean 30 flips is not a small insignificant number. I mean that’s pretty awesome. So, I want to go through a few questions about this, but like first, what does your company look like in terms of, let’s start just the flipping side? How many people are doing it? Is it just you? I mean, do you have like operations managers, you have regional managers? Like what’s the actual structure of your business look like for that?

Jared: Right now it’s, I try to run things lean and mean. So just for my investing company, JH1 Homes is just the investing company. So I have myself, I have an office manager who does a lot of the paperwork as you know, buying and selling real estate, there’s a good amount of paperwork. Then I have a full time project manager and then I have an acquisition manager. Then recently as I am working really, really hard to remove myself from the business. I enjoy the business still for sure and I enjoy designing and project managing a lot of that stuff.

Jared: But as I want to grow and expand in all these different areas, I’m working really hard to have the right people in the right places. So now I have a designer as well and then I’m still working on really fine tuning everything to where I’m not the person holding things up, whether it’s material orders or design choices or whatever it is. So that’s something that I’m actually working really hard in my business right now to do, so I can spend my time to find the bigger more exciting deals like development deals or maybe a mobile home park to be like you Brandon. I don’t know.

David: That’s something Brandon are hearing all the time. I think we’re both talking to each other about it and we’re hearing other people say it’s this concept that’s always coming up that I’m trying to remove myself from the business. So what happens is there’s this progression of, I need to be an apprentice and I need to learn everything. Then you learn it and if you’re good at it then you become successful and you very quickly realize, “Man, I’m flipping all these houses, but I could save money if I had agents to sell it for me. If I own the construction company, I could save money there and when I’m not flipping a house, I can make money.”

David: You start seeing all these ancillary ways that you can create income. So then you go do all that and then you realize I’m spread too thin. That piece right there is where most people just keep hitting this ceiling and they can’t get any higher and they get stuck in this like washing machine and getting turned over and over and over that can’t get out of. Can you give us some advice about, or maybe some strategy of how you got there, what you’re doing to get yourself out of it, what skills are required in order to make that transition?

Jared: For me, it’s exactly what you’re talking about and it’s really easy to just start saying, “Okay, well I’ll just do this and then I’ll just do this.” Then when you have that many projects going and you’re spread thin across everything, it really makes you sit back and think, “Okay, well now I’m wearing too many hats and I’m trying to manage too many things on my own. For me, it really has been a big focal point to figure out how I can systemize everything and empower all of my team members to own their roles also and be excited about it.

Jared: For me, it’s something that it’s interesting to see the natural progression of a business. Like I used to love being on site, doing the day-to-day. Man, I’d walk onto a job that they just put flooring and I’d almost jump out of my shoes. I’m like, “This is amazing.” Like, “Holy crap, we have flooring in here.” It goes from that kind of feeling to now I have eight houses under construction. I’m not getting that excited about flooring going in. I’m like, “Come on guys, the flooring should have been in last week.”

Jared: So figuring out how to empower your employees and team members to feel that same way has been something I spend a good amount of time on. It’s really just figuring out how to be a good leader, figuring out what motivates people, how you can keep everyone excited about the job is something that it’s kind of a continuous struggle I think. Then making sure that you have the right people in the right positions. Because you may have somebody who may not be as detail oriented being a project manager and they have no right to be in that position because you need to be on top of all of these little details.

Jared: So I think understanding the roles really well is super important and then understanding kind of what the team structure should look like to be able to run smoothly. That’s why again, so like I do have my brokerage side of the business and then my construction side and then also the investing side and I’m trying to figure out how to make all of that work cohesively to where I’m not the person who has to be telling people what to do or asking where we’re at on projects. It’s, we have a team meeting every week.” “Hey, here’s where we’re at with all the projects. Here’s what the timelines are, here’s what we’re projecting to being done. What do you need from me at this point?”

David: One thing that I’ve noticed is there’s two kinds of mindsets that usually everybody has one of the two. There’s one mindset that says, “Hey, I’m here to help you out, Jared. If you need some help, let me know. I’ll make a phone call. I’ll handle a thing. I’ll go check on a job and I just want to learn, just like I want to help.” There’s another mindset that says, “I want to take responsibility for a result. It sounds like a subtle difference, but it manifests itself wildly different. Whereas the person who says, “I’m taking responsibility for this piece of your business or this result,” you don’t have to check in with that person and say, “Where are we with this? Or go do that.”

David: You’re not giving them tasks. Their responsibility is to figure out what needs to be done and to go do it and they’re reporting to you how well they’re doing. As opposed to the person with the helper mindset, which is really just a way of that person avoiding responsibility so they don’t have to fail. They don’t have to feel like I messed up. It’s like there’s no pressure when you’re just helping out someone. Those people you’re constantly going to and you’re like, “Can you do this? Can you do that? Why didn’t you do that? Okay, go do that.” Then they do it and they come back to you and say what’s next?

David: It’s really not saving you that much time because you’re still having to figure out the solutions to these problems that are popping up. Has that been something that you’ve seen as well? Have you figured anything out to help navigate that issue?

Jared: Yeah, I mean I wanted to say yes about six, seven times as you’re talking, just nodding like as hard as I can, yes. You hit it literally like right on the head and the fact that that comes down to having the right people in the right position. If they’re asking you what’s next, what’s next, what’s next? Like why do I need you? Like I’m just giving you all of these tiny little tasks that here’s the outline. You need to follow what the flow is for the job. You need to understand what it needs to look like. What was your question again because I got distracted?

David: Well, have you found any method of like ways you interview people or where to look for people or how to set a tone? What have you done to be able to pull people into the, you need to take responsibility mindset as opposed to the, you’re just here to help out?

Jared: I think a lot of that is going be, man, I guess, yes, the interview process is definitely important. You need to be able to, I guess, understand people’s personality types also. I’m someone that’s been around… I’m one of seven kids, first of all in the middle. So like I’ve seen all of the personalities. So understanding people’s kind of mentality early on I think is really important. Yes, going through a proper interview process is very, very important. I’m a believer in this slow to hire quick to fire mentality.

Jared: So the first project manager I ever brought on, it was someone that kept asking me for work, asking me for the job, and I was like, “I don’t really need someone right now.” Then when I did, it was kind of more of like an intern type of move. You can come on here and we show you what I’m doing and then kind of earn that role. So I’m a big believer in, I’m going to kind of show you what to do, but you need to be able to earn the rights to kind of grow within that position as well. So like, show me what you’re worth.

Jared: Everyone wants to come on and pay me $100,000 a year right away. I’m like, “Okay, well I’ll gladly pay you that, but let’s prove that you’re worth that. Let’s put you in this position that we have clear guidelines.” Then tracking everything is really important too. Understanding the full process through a project, seeing what it should look like all the way through and making sure that you give your employees and team members and whoever a proper guideline so they know what to follow also. Because if I’m not giving them clear enough instructions from the beginning, then it’s just as much on me if they’re not following through and getting things done.

David: I think that if you’re listening to this and if you’re the person who the majority of our listeners I believe are that’s thinking, how do I break into the real estate game. You’ll hear Brandon and I say, “Well, find a mentor or go learn from someone else.” If you understand what Jared is saying, he’s basically saying, “I’m dying for someone that can step in and take something off my plate and do it well.” I will assist you. I’ll give you all the pieces I need, but I need someone that can run this project. I have a world of opportunity for that person.

David: You know that [inaudible 00:35:29] missing is that most human beings have a helper mindset, not a responsibility mindset. That’s what you have to approach that person with. If you show up to that person that you want to mentor with and say, “Let me run these projects. Here’s the pieces that I need to know and I can do it for you.” You’re way more likely to get that help than when you show up and say, “Hey, just tell me if there’s anything you need, I’ll go walk a property for you every once in a while.”

David: Because I see this from my role. I’m in the same position you are with my growing real estate team and my investing and the books I’m writing and everything else. There’s a big gap between the people that want to break into an industry and the people that have done it that are trying to go to the next level. If we could get everybody with the same mindset, I feel like that gap would be bridged a lot faster.

Jared: Yeah, totally.

Brandon: Deep. All right. Jared, how are you finding deals today?

Jared: I always joke and say it’s not one thing, it’s everything. For me, because I run this as a business also and it’s not a hobby for me, so like I’m just constantly marketing in a lot of different ways and I tried different things also, which I I enjoy. So, one of the biggest things that I’m very, very consistent about though is every time I buy a house, I put signs outside of the property. So I’d say, Jared buys houses signs that I put out there. Then I also have a nice like company sign. Says JH1 Homes, a quality renovation coming soon. The company info, the website and then also, we also buy properties market value, blah, blah, blah.

Jared: So I put signs outside of all of my properties, very first thing. Then I immediately have my acquisition manager go introduce himself to basically the whole neighborhood. Well, canvas a good portion of the neighborhood and it’s not to knock on their door and say, “Hey, I want to buy your house.” It’s to say, “Hey, we actually just purchased this house right down the street. We’re going to be working here for about six to eight weeks. Here’s our information if you ever have any questions or issues or you’re interested to see the house when we’re done, here’s all of our info, please let us know if you need anything at all. By the way, we are looking to buy another house while we’re in the area.”

Brandon: I love that.

Jared: Yeah, man. So it’s like a warm intro. It’s not a 100% cold call. It’s we’re in the area. We want to be nice and I’ve gotten deals that way too. On top of that, because I work in south and west Seattle is like my primary areas, I’ll do like 30 minute radius of downtown Seattle, but that’s kind of where I spend most of my time. A lot of people know me now. So like I’ve had people come up and be like, “Oh my God, you’re Jared.” Like, “Yeah, I need to buy a house if you know anyone looking to sell.”

Brandon: I like the branding Jared buys houses. I love just good branding and that’s good branding. People know you and they know what you do. It’s very clear.

Jared: It’s easy and I’ve literally had a neighbor, the house that I currently live in, actually, I had a neighbor call me one day. I’ve done a lot of business again in west Seattle. She’s seen a bunch of my projects and she loved it. She called me one day, “Hey, my neighbor’s outside, he’s mowing his lawn. I know that it’s no longer rented anymore. You should come buy the house.” I literally jumped in my car. I drove over there, parked and I casually walked over. “Oh, hey, I was driving by and I noticed you’re maintaining your yard, whatever.”

Jared: I ended up buying that house. It was terrific. I did an addition on it and now I live in that neighborhood and I kept it for myself because again, like, it’s cool to be part of this community that I’m rebuilding also and people again appreciate what you do. So by me broadcasting that, I think it sets me a little bit apart too because again, I’m not doing this as quickly as I can as cheap as I can just to get in and out. This is a business for me. So I treat it that way. Back to your question in terms of marketing, that’s one thing that I’m religiously consistent about is getting my brand out there as much as possible.

Jared: Then when we finish, we invite neighbors over again. “Hey, come look at the house. Come to the open house.” So that’s one big way. Then I don’t do as much direct mail anymore. I kind of stopped off on that a couple of years ago because I was getting a lot of wholesale deals sent to me. So just because I’ve networked so much and I know a lot of people, like I get several properties sent to me each week and they’re deals and quotation. So still analyze those and make sure that they’re done right. Then something I’m trying doing like a little bit of a combination of marketing now.

Jared: I have a small billboard above the west Seattle Bridge and then I’m actually getting a larger billboard that goes live actually like this week it should go up. That’s just going to say, Jared buys houses on it and so it’s going to drive traffic to my website. So I’m hoping that’s going to be able to get me some-

Brandon: What do you pay for a billboard?

Jared: I have deals on the billboard actually.

Brandon: Oh, okay. What does the typical person pay for a billboard like that?

Jared: So honestly it varies. So when I joined the BBB actually, they started calling me just giving me lots of advertising opportunities. To be honest, that billboard above the west Seattle bridge is only gonna cost me about 1100 bucks a month, which is amazing. It’s part of like the deals with the BBB that they get and just by forming this relationship with this marketing advertiser, she would just constantly call me and be like, “I’d be interested in a billboard opportunity if the price is right.” That price is right.

Jared: So, I said, yes on that. But it depends on location and everything they can be. That’s the cheapest I’ve seen and they can be 10 grand a month if you just go through like that Lamar, the company that owns [inaudible 00:40:57].

Brandon: Sure. Well, and here’s what people… I’m sure that people right now listening and this is just marketing one-on-one, but it might change somebody’s mindset. I know somebody out there is thinking 10 grand a month. For you, $1,100 a month. But it could be 10 grand a month for a billboard. I could never afford 10 grand a month. But the beauty of marketing, like when people ask me, what’s my marketing budget, I’m like, there’s no such thing. It’s unlimited as long as the marketing produce a result.

Brandon: If I spend 10 grand a month on a billboard and I make $100,000 a month on flipping properties because of that billboard, it pays for itself. If I paid a billion dollars for a billboard, but I made $1.1 billion back in return, then it’s worth it. That’s just like this shift that a lot of people just say, “Well, my marketing budget is this.” I’m like, “Well, stop thinking in terms of my marketing budget. Start thinking what’s my return on investment of my marketing?” That’s the more important thing there.

Brandon: Anyway, then I love that you said it’s not one thing, it’s everything. In the beginning though like if you’re just getting started, somebody is listening to this show right now, they’re trying to get their first deal. They’re where you were five years ago, what would you advise for them to do? Just what’s the first thing they should do to start getting leads coming in? Like if you had just to give them like do this, do this, do this. You’ll get something if you’re consistent.

Jared: I would say first it’s going to come down to, I think you either need to trade your time or your money. If you have one or the other, then you need to figure out which one you can contribute. So if you are broke and you don’t have any money to finance anything at all, no marketing budget, then I would say network. Get your butt out there and you put as much time as you can and knock doors and network, do everything that’s free. Look on, look online for all the, for sale by owner websites, classified ads, anything that’s free, that’s what you need to concentrate on.

Jared: But if you have more money than time, then it’s then it’s really more concentrate on one thing. For me, I diversify my marketing because I think it’s fun honestly, and I like to do a lot of different things, but I can afford to try different things. So if you have a good amount of money for a marketing budget, then yeah, it’s important to focus, I think really on one thing and hit it pretty hard. Because if you just do like a little bit of direct mail and maybe a little bit of online marketing and a little bit of bandit signs, you’re going to get a little bit of results. You might get one call off one of those and then you think that this is stupid, it doesn’t work and nobody can do this.

Brandon: That’s a great answer. I think a lot of people, they jumped from thing to thing to thing. I think it’s good to get consistent, get good at something and once you’re like awesome at that, it’s cranking out leads, whatever. Yeah, expand to something else. Expand to something else. [inaudible 00:43:36] you might have 20 different ways to find deals, but I made a video on the Bigger Pockets youtube page, I don’t know, a few weeks back called like 27 ways to Find Incredible Deals. It just walks through like there’s a lot of different ways and one of them was billboard because I have not done a billboard, but I know a lot of people have. I know people have done TV commercials and paid $100,000 for a TV commercial, but it made sense to them.

Jared: I put this really, really elaborate marketing plan together a couple of years ago when I was like, business was just starting to take off and it was like, it was everything from boots on the ground marketing, to putting posters in neighborhoods, to bus bench ads, to geo fencing, to billboards, to SEO to like this really, really cool long marketing plan. I did it with a group of people and when it came time to put the money up, like everyone fizzled out on us. Okay, well I’m still going to do this guy.

Brandon: That’s funny.

Jared: Takes me a little bit of time. But yeah, like you said, there’s so many different ways to market and being consistent at whichever one you really want to do is what’s going to generate leads for you.

Brandon: Yeah, that’s great. I often hear the phrase like, what’s the best workout in the gym? It’s the one you do consistently. What’s the best CRM? It’s the one you use consistently. What’s the best marketing like technique for getting real estate deals? The one you do consistently. Like the one that you can just get out there and do. All right, cool dude, last question I got before we get to the deal deep dive. What habits do you have in your life or habit or habits that most contribute to your success? Is there anything that you do regularly or a habit that you have that you feel like really helps in your business or in your life?

Jared: One habit. That’s a good question. I would say for me, I think the just drive to push myself, I guess. For me, I don’t have one specific habit. Yes. Being consistent and doing all of these things and following through on your goals and goal setting. I could rattle off like 50 things, but I think for me is the motivation to continue to want more because whenever I set a goal for myself, if I hit it, I feel like I set it too low. I feel like I cheated myself. So like whenever I set goals for myself is continuing to push it to a point to where it makes me feel uncomfortable or I think I can’t quite get there.

Jared: Then if I do get there, then I think I set it too low. So I think for me the biggest thing is not settling and continuing to want to kind of push back past these glass ceilings that I run into as I go through my business.

Brandon: All right.

David: Everybody should read The One THING by Jay Papasan and Gary Keller write it too Brandon? Do you know?

Brandon: Gary Keller, yeah.

David: Yes. In chapter two they talk about geometric progression and it’s this idea that a one inch domino can knock down another domino that’s one and a half inches bigger. So when you realize that your goal is more than what you’re able to knock down at your current domino, you just need to put a domino in between them or maybe three or four dominoes in between them to build up. So if you say, “Man, I want to be able to buy a $100,000 or put that much money into putting a billboard up, but I don’t have that much money. One bad month and I’d be wiped out. Or I don’t have the infrastructure in place to handle all the phone calls.”

David: Well, then the domino right before that would be have a budget that I can support a 100 grand a month for six months before I do it. One domino before that might be put a team in place that can handle this many leads and then slowly start working back with what you have to do to get to that point. Now you’ve got a business plan, like a legit a to g, whatever the steps are to get to that point you’re trying to get to and you just systematically start working your way there.

Jared: I think on that same note, like if you were to ask me five years ago if I thought I could be flipping 10, 12 houses at once and also about to break ground on a six unit townhouse development, I would have thought you were crazy. Like I thought it was insane to own two or three houses at once. I’ve just continued to push past these whatever goals that I set throughout the time. Then you start realizing, “Oh, I can do this.” You just have to have this infrastructure. You have to have these things in place, checks and balances. That’s how you’ll be able to continue to kind of push past that. So it’s spot on.

Brandon: That’s fantastic dude. All right, well let’s head over to the next segment of the show. It’s the Deal Deep Dive. All right. This is the part of the show where we dive deep into one of your deals, Jared. So you got something in mind?

Jared: I do. Another one of those free houses that I like so much.

Brandon: Perfect. The question is what kind of property is it? Is it a single family rental, I mean a single family or multi?

Jared: Single family flip.

Brandon: All right.

David: How did you find it?

Jared: I found this through direct mail and a lot of follow up to be honest. It took a while to put together.

Brandon: How much was the property?

Jared: I ended up getting a seller financing deal for 405,000.

Brandon: All right.

David: How did you negotiate that price?

Jared: As I told you guys earlier, I really do my best to offer as many options as possible. I think that people love their options. So this is a house that it was in North Beacon Hill, very old house. This was I think in 2016 I believe. So the market was pretty, pretty hot in Seattle still, but not a ton of really solid flip comps in the area. So I had offered 375 to the seller cash, which still made me a little bit nervous at the time, but I felt like it could be a deal. Then I offered, I think to list it for him for like 420 and then 405 was the partnership for a sale.

Jared: I gave him those three options. We went back and forth for awhile and then he agreed to 405. He was like, “I can wait a few months.” He’s like, “I’m not in a hurry. This is a rental.” So, he agreed to 405 and on top of that, he agreed to finance the entire renovation for me.

Brandon: That’s cool. Again, the question I asked earlier and I’ll ask again, why did this guy want to do that? Why would he do that and not just sell it to somebody else who didn’t have to carry the financing?

Jared: What’s funny is this person actually is one of my primary investors in my business now. What I want to point out here is the fact that you literally never know what the other side of the table is thinking. You have no idea. You don’t know what they’re looking for out of this transaction most of the time or you don’t know what their kind of longterm goals are. So it turns out this guy had met with a lot of people. He owns a lot of real estate and his family does. So they get letters all the time. They’re always having people reach out.

Jared: Apparently there’d been a lot of people that sat in that chair in front of him and gone over these potential options. He was very interested in starting a investing relationship. I didn’t know this until the deal was over either. When I offered him these three options, he felt confident that I knew what I was doing. At that time I had done I think two flips, but none like this. I’ll explain in a little bit. When I gave him these options, he felt good about it and he told me, “Hey, look, kid, if you can do this,” he’s like, “If you can do this deal, then we can do big things together in the future.”

Brandon: That’s cool.

Jared: I gave him the options. He chose that one and that’s what he said.

Brandon: I love the options thing.

David: I love that you said you don’t know what the other person is thinking. God, I know that and I forget it all the time. This just happened yesterday with one of my buyer’s agents. There was a house listed for like 580 or something and we wrote an offer at 540 and they didn’t even respond to it because it was so low. The buyer’s agent was really frustrated. Like, “I just don’t know what to do. They don’t want sell it for 540.” I said, “Have you asked your clients if they’re okay just paying asking price?” Goes, “No.” “Well, why don’t you try that? Ask them if they’ve even run the numbers to see if it will work at asking?”

David: So he does and they come back and they’re like, “Oh yeah, we would totally pay asking for this house. This is a great deal at asking. We just wanted it cheaper.” We almost walked away from that whole thing because no one thought to even ask the clients what price are you okay for? So we came up with something in the middle, which was still better for the buyers and much happier for the sellers and are going into contract today. It was just a reminder of like how many things in life do I miss out on because I don’t even bother to ask a question? I just make this assumption that this is the way it is.

David: But yeah, the seller might not even care that he could sell it to someone else without seller financing. It doesn’t mean anything. Or you say, “Well, I’ll give you a return on the money that you handle with the seller financing of 3 or 4%.” They’re like, “Oh cool. It’s more than I’m getting right now. Let’s do it.” Because you asked. So thank you for bringing that up. I think it’s really good for people to be reminded of including me, of don’t assume that stuff. So this property, what did you end up doing with it?

Jared: Oh my God. I rebuilt the entire house and I mean I don’t swing a hammer, so like my contractor rebuild the entire house. So, a little bit of more details on the deal. When we’re negotiating all of this I say I planned for a 100 and I think $20,000 renovation on it. This house was built in like 1910, I think. He was like, “Okay, well what if I finance that for you?” I was like, “Well, I mean I might be able, that might work.” It scared the crap out of me to be honest, because I’m doing this partnership with this guy. I’m thinking I’m going to work for free. He could use me. We do have joint venture agreements and we sign everything and I actually secured the funds with a deed of trust on the house.

Jared: So we put a second in a deed of trust is a lien. So we put a second on the house to cover 120,000 and I was still kind of worried. I was like, “This seems too good to be true and kind of scary to have this guy give me a house for free. Then he’s going to finance a $120,000 for it also.” By doing that though, I paid him 10% on his funds for the renovation. So this is all looking really good for him. He’s going to get paid more because we’re going to partner on the deal and he gets 10% on the 120 grand.

Jared: We get into the end of the project. It’s all great. I’m having fun, I’m jumping out of my shoes and flooring goes in, all that good stuff. But we start on this house and the original plan was down in the basement. So this is a one story with a basement. Again, early 1900s home. My original plan was, “Okay, well there is about maybe an inch or so flooring on the ground. We can remove that. We’re hoping to be able to shave maybe three quarters of an inch off of the ceiling and we’d have like six foot, four, six foot. No, no like six foot five, six foot six basement, which is short.

Jared: Like I won’t even look at anything if it’s at least six foot seven because it’s just getting too small down there. So that was the plan. We started doing all the demo, we demo the downstairs and I find out, okay, well we don’t have that extra room and on top of that, this slab is beat to crap. Like it’s just cracked, it’s broken, it’s in terrible shape. So then I’m like, okay, well, I mean we can dig it out, right? So that’s super easy. Not in the budget. We had like a couple thousand dollars or something for like the head room in the basement or whatever.

Jared: So I get hit with this and I go back to the seller and I’m like, “Hey, so here’s the first thing that we ran into.” It was partially his idea also like, “Here’s what we can do.” Like, “Okay, well let’s just dig the basement out.” I go to my contract, I’m like, “Hey man, can you do this? Like do you know how to do this?” He was like, “Yeah, we can do that. That’s no problem.” He has a lot of experience and he did know how to do it. So, we start doing that. We end up demoing the basement walls and they were farred out like really far. For those of you that don’t know farred out means, it means there were studs outside of where the foundation walls were. So they were like a foot or so away from it.

Jared: I’m out looking for more deals and my contractor calls me and he’s like, “Hey Jared, I have some bad news.” I’m like, “No thanks. I don’t want any bad news. Maybe some good news.” He’s like, “The house is literally falling over.” I was like, “What do you mean it’s falling over?” He’s like, “Yeah, you should come over here right away.” I’m like, “Oh my God. I don’t know what to do. I go over to this house, go down to the basement and he shows me these walls. The previous owner at some point in the early 1900s had literally built walls about a foot away from it because the house was completely falling over like the pony walls that go from the foundation that connects to the floor joist on the first level had all started to lean about six to eight inches.

Brandon: Oh no.

Jared: So the entire house had a little bit of a gangster lean, just kind of leaning to the side and they supported it by putting two by fours around it and then they just farred all the walls out to make it look like it was supposed to be that way. On top of that, the two by fours were cut at the angles at the top. So you had about an inch actually supporting the second floor. So, that was a pretty scary thing for me and I asked my contractor like, “Well, what are we going to do here?” He was like, “Well, we have to pour all new foundation walls around the entire perimeter. We also have to rebuild the entire pony walls all the way around.”

Jared: Meanwhile, and I pulled permits on all my projects also. So like everything has to be done to code, done right. We’re doing all this. He’s like, “Oh, we’ll also have to seismic retrofit it. We also have to build shear walls.” This humongous addition of work that just came out of nowhere and he hits me. Again, like what do you do? I go back to the seller, “Hey, by the way, your house is a total piece of crap. It’s falling over. It’s going to cost us about an extra $20,000 to do this work. Like what are we going to do? He’s like, “Well, I mean we have to do it. We can’t do anything else. He’s like, “Yeah, we do.”

Jared: So that happens and then we keep moving forward and this is the biggest project that I had done to date at this time and I’m dealing with phone call after phone call. The city comes out, they red tag it because my electrician hadn’t pulled his permit before he started work, so they saw some wiring done. So they shut me down. I had every single department from the city come by, street use comes by, “Oh hey, what are you guys doing? Oh, you need to have a permit to be able to park next to the house in case you pull over onto the driveway.”

Jared: plumbers like everybody comes by, scariest, crappiest, worst couple of weeks of my investing career at that point. But everything gets ironed out. We get it all taken care of. We were only red tag for a short time until my electrician got his permit pulled and then got everything handled. The one additional thing, kind of icing on the cake. We then found out when my electrical starts going and kind of getting everything done that probably the same time that the previous owner had built these junky pony walls, they had also bypassed the electrical meter from the city power and just ran it straight to the basement of the house. So they had been stealing power for-

Brandon: Oh, wow.

Jared: [inaudible 00:59:15] how long. Yeah, man, it was like so many crazy things happened on that house that I just never ever knew could happen, which was amazing learning lessons for me though. So we get it done though. Everything keeps moving forward and we complete all of the work and I’m really stressed out at this point. We’re into about 165, so we’re 45,000 over budget. Thank God the owners still had the funds to be able to pay for all of this. Otherwise, I’d be hunting for new money and trying to figure everything out. So, we finished the house.

Jared: I put it for sale and I put it for sale about I think about 20 or 30,000 higher than I had originally planned. I originally planned on listing and I think at 620, we put it at 650. I’m just really stressed out. I’m the broker as well. So, I hold the first open house. It goes really great. This lady comes out, she’s in the house for about an hour. She comes back with her agent later. I had no review date at the time. Then I went to a show with friends that night and I’d been texting with the real estate agent from the lady that had come to view the house.

Jared: She’s like, “Hey, would you guys accept an offer early? Like would you accept an offer now?” I was like, “Yeah, we totally would.” I was like, “It needs to be really strong though because we’re one day on the market.” I did a pre-inspection on the house as well and they sent me an offer $70,000 over asking. I literally jumped out of my seat like as high as I can in the air. I like yell when I see this because I’m so excited after this insane process of renovating this house and going through this crazy ordeal to get that offer 24 hours on the market. Just like it made it all worth it.

Brandon: Dang. That’s awesome. So then it’s sold. [crosstalk 01:01:06].

Jared: 720, it sold for 720, one day on the market which man, I earned that. Let me tell you.

Brandon: Yeah, that’s awesome. All right. So, then remind me, you mentioned earlier, but did you end up splitting some kind of profit with the seller who carried it at all or did you get all the profit he just got his 405?

Jared: He got in his 405 and then he got paid 10% on his money to finance it as well. That was, we had a 120k net profit on that deal. I was so happy. I was like, I gave the seller a $10,000 cash bonus. I was like, “Bam, we earned this together.” Then I bonus my contractor also because it was just like we had all been through [inaudible 01:01:49].

Brandon: You went through hell in a war together there.

Jared: There was a day my contractor called me and he’s like, “Jared, I had a dream that the house fell over.”

David: We never ask this question, but I wonder how much the contractor learned from that job with you that increased his confidence when he went to bid other jobs or made him more efficient at stuff he did. Like, we always talk about the nightmare things like, “Oh, it was horrible.” But I bet if reverse engineer success, a lot of skills we picked up that led to us being successful came out of those projects.

Jared: Oh, you can’t pay for that education. I mean like going through that, it gave me so much confidence in him. He’s been with me since day one. Like we’ve done probably 40 flips together I would say. He’s done $300,000 flips for me. So that was the biggest one at that point and after that I was like, “Man, if you can do this, we can literally do anything.”

David: You guys, you went to firefight in Afghanistan together and you [inaudible 01:02:53] best friends and now you’re joined at the hip.

Jared: Oh my God. Yes.

David: It’s funny. That’s what it’s like with Brandon and I, because he tried to teach me how to surf, horrible.

Brandon: It was exactly the same thing as a firefighter [inaudible 01:03:06]. We got to move on to get to the next segment. It is our Lie Around Mound. All right. This is the part of the show where we pull questions from real life Bigger Pockets members over in the Bigger Pockets forums, which of course everyone listening should be checking regularly. Biggerpockets.com/forums posting in there, answering questions, asking questions. So it’s a great community, but let’s do this.

Brandon: Number one from Karen S. Hello everyone. We have a great realtor that we work with, but we’re also interested in making an offer for a house that is not currently on the MLS or even up for sale. I know that people do this every day, but I wanted to hear your advice for making a cash offer on a property without the help of a realtor. What do I do?

Jared: First thing, know your numbers I think is the most important thing. Then I think something else that it goes back to never knowing what the other side is thinking. What I do every single time when I meet with a seller is I ask them some form of, what is your ideal situation? So you need to know do they want to be out quickly? Do they need to leave it as is, do they need to maximize how much they make? So I would say finding out what their ideal situation is and then being able to tailor kind of your offer around that. Because everybody, again, we never know what the other side is thinking necessarily.

David: Great.

Jared: Knowing those numbers, making sure you’re confident in your offer.

David: So what about the part that isn’t just the numbers, what about the actual, like the escrow and understanding contingencies and like how to communicate what you’re thinking to the seller? Because that’s typically where agents are good, they have practice and these people. They don’t necessarily know any of that. How would you advise them there?

Jared: Then really explaining the benefits of working with someone like yourself. So it’s important to be prepared when you go to that meeting for sure. Write out a little list. Like why should they sell you the house? Here’s the benefits to selling to an investor directly like myself. We can close when you’re ready, you don’t have to do any repairs. Just listing through all of the reasons that why they should work with you, is going to be important because again, it’ll give them confidence that you’re going to be able to perform and explain them why they should want to work with you.

David: Beautiful. I love that. So don’t tell them what, also tell them why that’s a big thing. Don’t assume they know. All right. Next question from Stacy White. I actually really like this. What rules, tips and systems do you have in place to make your real estate investment run smoother? What would you have done differently if you were building your business systems knowing what you know now? For example, would you use the same color paint for all your properties, have a no pet policy, etc?

Jared: I would say that the rules, tips and systems. So the biggest thing for me, so I do a lot of flips. So being organized early on, so things that I have in place are first of all contract with all the people that I hire. Then setting a solid milestone schedule. So basically you plan out the entire project so you know when it’s going to start, when you’re going to be hitting these large milestones throughout it, like having the flooring done, the cabinets installed, that kind of thing. Then having finishes picked out earlier is a lot easier also.

Jared: When you do more than one house at a time, it can be kind of cumbersome to decide on exactly what everything should look like. So having everything systemized and organized and to your contractors and everyone’s hands before they need it, is one of the biggest things I think that’s important. Then if I were to change anything now, I don’t think there’s any one specific thing that I would, I guess change right now. It’s really just refining and holding people I think accountable probably.

Jared: Because for me I get a little bit lackadaisical with holding people accountable for finishing on time, contractors getting done or going over or change orders happening, that kind of thing. That’s again, something I’m currently working on in my business is trying to streamline things a little bit better so there are less questions from people as you go through the process.

David: Awesome. Good answer.

Brandon: What are we on, number three? Number three, with tech companies like Zillow and Opendoor getting into the house buying game, how can investors set themselves apart from these ibuyers?

Jared: I think that’s a good question and kind of a hot topic nowadays. I’ve had similar conversations with people a few times recently and I think more than anything else, it’s being kind of the individual instead of, you go to Zillow like there’s estimate for instance. They get this random arbitrary number that they don’t really have anything to back it up as. So if you have the opportunity to actually talk with a seller, you can explain to them, “Hey look, we’re not just a computer out there running the numbers on this and shooting out a price to you. We’re here to talk to you and really listen to what you need and then we can help you get to that together.”

Jared: Instead of, again, just plug us into an algorithm and this is what it tells us to pay for your house. So I would say maybe trying to touch on the personal level with people more. I think that could be a way to set yourself apart.

Brandon: I love it. It’s a great answer.

David: That’s another thing where don’t assume that the people that you’re talking to even know about those companies or that they’re going to give a better deal. A lot of people have no idea who they are and don’t care. They don’t trust them or maybe those companies won’t be around two years from now, you don’t know. You can’t assume that.

Jared: I think the other thing, I’m pretty sure Zillow charges, I think like a 7% fee to the sellers, if I remember correctly for that electronic by whatever that they offer.

David: Yeah, shocking. You see that a lot with these, there’s like companies that will auction off a listing and they list it for like 50% of market value and they get all of these buyers that show up and they want to participate in this auction thinking they’re going to get a deal and then they set a reserve that’s at fair value anyways, that’ll never go for it. They charge the buyers of premium to buy the house. So they’re paying for their real estate agent fees thinking they’re getting a great deal.

David: People just assume like, “Oh, how could I compete with that?” Well if you look at it, it’s not that good. If you could explain it to the client why it’s not that good, then they’ll use you. It’s really just sales skills that are applied in non sales roles, if that makes sense.

Jared: Read that fine print, man. Thinking it’s great, “Oh, a cash offer,” and then the investor actually isn’t going to charge you those extra fees. But if you go to Zillow for that cash offer, “Oh by the way, there’s 7% you have to pay us also.”

David: Good advice. Last question. I live in a fairly expensive market and I flipped a few houses but really want to crank it up and do more flips this year. For those who have done that, what are you doing for financing all those deals?

Jared: Finding the private lenders, I mean that’s what I have found. So at this point I have a few private lenders that I work with and once you have done enough of those deals, if you’re working in a more expensive market, like I am out here, they take a lot of cash. So each of my deals anywhere could be the lowest 150k to a quarter million that’s using a hard money loan. So that’s a lot of money. What I would say once you have a track record of doing a few of these deals, having a credibility pack and about yourself and returns. So I have like a investor credibility packet that I use when I meet new people that could be interested in investing and giving that to these people that you meet. Or just always being ready for an opportunity to come along.

Jared: You never know when somebody would be interested in investing. Again, I’ll go back to that example of that house that I ended up that I told you guys about in Deal Deep Dive, that person now invest an amazing amount of money with me. It just happened kind of organically. So being open to these relationships or open to talking about money and giving people returns and investing, I think there’s a lot more people out there that are open to doing this than you’re even aware of.

Brandon: Do you have any advice? I’m venturing into my foray of raising money and syndicating and all that here this summer. Do you have any advice on how to talk to individuals like credit investors? Like what do you say? How do you open those conversations? I mean, this is total personal selfish question here. But I mean, you’ve done a lot more of that I think than I have.

Jared: Maybe, I mean for me, I think the biggest thing is building that confidence in you. So I’ll give you an example. I met someone one time that was referred to me from another investor I work with. She met him in a garage sale and he expressed some interest in investing for passive returns. So the first thing you really need to figure out is, first of all, are these people actually investors? Do they have that mindset? Because there are people that can invest and first of all, you need to let people know this needs to be money that you don’t need to have any time in the near future.

Jared: Like, this needs to be disposable income that you just don’t need to think about or touch. That’s first and foremost. So going back to this other investor, so he expressed some interest in investing and if you have the ability to show them that you know what you’re doing, that’s the first thing. So I walked him through a house that I put about $280,000 into. At the time I show him the process, we pull permits, here’s the information on the wall, here’s my job site folder, here’s all the contractor’s information.

Jared: Be organized and know what you’re talking about and just walk them through it. Then just continuing that conversation. Find out what capacity they want to invest in. Because again, this is another example. You have no idea what the other side is thinking. So I met this guy one time. I have websites, I gave him my website, I gave him the credibility pack, the information. He then messages me I think a week or so later and he’s like, “I’m interested. Let’s find a property.” He sends me a house in Magnolia, which is a nice, very established neighborhood in Seattle for $900,000 and he says, “Hey, this looks like a house you could flip.”

Jared: In my mind I’m like, “Damn, like you want to go for the high end stuff? Okay, this is great. Terrific. Let me look into this right away.” I look into the house and it actually looks really good and I make an offer on the house and I ended up getting it under contract for $888,000. I say, “Hey, so here are the options to finance this project.” Again, people love options. This is something that I just really hammer home with everyone on my team. Here are a couple options. Option number one, you can put the 20% down, I’ll finance everything else through my hard money lender. Option number two, you can be 20% plus the renovation budget. This house we were going to put about $200,000 into, we sell it for 1.5. Option three, you finance the entire renovation and acquisition. Everything, 1.1 5 million.

Jared: I walk through the house with him. I show him, we walk around the neighborhood. I’m explaining these options as we’re walking back down to his car and he looks at me and he’s like, “Okay, well I think I’m leaning towards option number three, 1.1 5 million cash.” I did a back flip inside of my chest. It’s like, I never expected him to say that. You know what I mean? Like you don’t expect that and he did. He financed this deal and he put that cash up first lien position, did everything.

Jared: I tell that story because you have no idea what the other person’s thinking. You don’t what ability they have to finance or what capacity they have to invest. Then this guy tells me, “Hey, by the way, I want you to keep me in mind for deals like this and larger scale things in the future.” He’s someone that I plan on doing developments with down the road as well because that’s the capacity that he wanted to invest. So, being always ready for opportunities like this to come along and just being prepared and understanding the value that you bring to other people because it’s a two way street.

Jared: You’re bringing them a ton of value, you’re giving them an opportunity to make a great return on something that is backed by something tangible and in return, you’re starting this relationship with them. So it’s really a two way street and understanding that is super important.

Brandon: That’s so good. I really like the options thing too about that. I do the options a lot of times when I offer on a deal. I’ll be like, “How about this price with seller financing or this whatever.” I love giving two or three options because it makes people think, which one versus yes or no. But I’ve never ever thought about it in terms of private lending. I’ve never thought of that. So that you just blew my mind just now. So that was good. This is all worth the cost of this podcast right there.

Jared: Beautiful.

David: Well, Brandon, you say this all the time and since you started saying it, I noticed it where people like options, even if there are all the kind of the same. They just don’t like it when you try to pigeon hole them and say, “I’m forcing this down your throat, you have to sell the house. Give it to me.” If you give them three options that are all more or less the same to you and similar to them, they’re way more likely to take it. He just took that and he took it like one level deeper like inception options within options.

David: Where one option is seller financing. Now within seller financing, here’s three ways that we can do it. “Okay, you’re okay with that? Here’s three ways we can make that work.” Which makes it easier for that person to take your hand and kind of walk them down to the result that both of you need to get to.

Jared: On that same note, Brandon, you said it right. Like all of these options work for me also. Like for that deal that he financed, I spent 30, 45 minutes, an hour maybe really scratch my head and looking, “Okay, well if he puts up this much money, here’s his return.” So it was a graduated scale. The more money he invested, the lower his return actually was percent-wise, but because he put more up, it was higher because for me it’s a numbers game also. Like I have a hard money lender, I can finance it for less than I would pay you, but for the ease of transaction, I’m willing to pay you a little bit more percent for this just to be one person and deal with it that way.

Jared: Whether you’re buying a house and you give them three options that you went on all of them, they net slightly different amounts. It’s the same thing with a private lender and I have several different deal structures with private lenders as well. You get a set percent if you just pay for the 20% down and then you get a different percent if you finance the renovation also. It’s their risk tolerance and it’s what they’re willing to invest also and they can get paid more for that.

Brandon: That’s so good. So good. Jared, this is fantastic and I could probably sit here chatting with you all day about this stuff, but we’ve got to move on. Oh by the way, little quick side story. We’re in the middle of potty training my three year old right now. When she uses the princess potty chair, she gets a sticker to put on her sticker [inaudible 01:18:10].

David: Same way that you got her to brush her teeth.

Brandon: Yes. So sticker them. So I’ve had that lesson before, a new lesson. She doesn’t want a sticker. She needs to decide which sticker she wants. We give her a packet of stickers and she literally spends like five minutes going, mm, mm, like this dainty little like mm, looking at each one.

Jared: Too many options.

Brandon: Yeah, too many. That’s actually the truth. Then she gets a little piece of candy, either a chocolate chip or this little gummy bear thing. We have to put both in front of her and she sits there going mm, mm. She just keeps saying mm until she finally picks one and then is super excited about her choice. Anyway, people need choices.

Jared: Yeah, man, but not that many [crosstalk 01:18:54].

David: Cut that cut the pat into stickers like a three.

Brandon: Yeah, I’ve got gotta give her three sticker options. Like she’ll just sit there and just go back and forth. It’s so cute. Anyway. All right, moving on. It’s time for Famous Four. All right. Time for the Famous Four, the same questions we ask every guest every week, but before I fire these four questions at you Jared, let’s hear what’s going on this week over on the Bigger Pockets Business Podcast. Well before I fire them at you, Jared, let’s hear what’s going on from Jay Scott over on next week’s episode of the Bigger Pockets Business episode. Let’s hear from Jay Scott on what’s going on next week on the Bigger Pockets Business Podcast.

Brandon: Let’s hear what’s going on next week on the Bigger Pockets Money Podcast. All right, let’s get to this. Number one of the Famous Four. Jared, what is your current favorite or past favorite real estate related book?

Jared: It took me a while to pin one down to be honest. So many good books and it’s funny that actually we talked about it earlier. So the One THING by Gary Keller is I think a really good one that can give you guidance and also confuse you a little bit.

Brandon: Yeah, all good books can.

David: Yeah, absolutely. How about your favorite business book?

Jared: Favorite business book I think is going to be E-Myth Revisited. Man, that one was like one of the very first books I read getting into this business and just getting in that mindset super important.

Brandon: I’m rereading that right now. Like every day I’m in there like underlining tons of stuff. That’s been a few years since I really dove into it.

Jared: That’s a good one.

Brandon: I was going to bring it up earlier actually because you mentioned something, I was like, “Oh, E-Myth.” Then I wouldn’t get to it.

David: He got interviewed on the podcast, right?

Brandon: He did. Yeah. Michael Gerber was episode number. I’m not sure, but it was a long time ago.

David: We’ll see if we can put that in the show notes.

Brandon: We will put that in the show notes. Thank you.

David: Maybe you should have him back again. That might not be a bad idea to go [inaudible 01:20:57] stuff.

Brandon: Okay. Smart dude. Number four, oh three.

David: Number three. What are some of your favorite hobbies?

Jared: My favorite hobby is growing my business is a top one and then-

Brandon: It’s a great hobby.

Jared: Yeah, traveling for sure and then trying to get out to golf a little bit more as I get some more free time here.

Brandon: Awesome. All right. Final question from me. Jared, what do you think sets apart successful real estate investors from all those who give up, fail or never get started?

Jared: I really think not to be a broken record I guess, but like consistency is so important and just persevering through things like I think those are the biggest things is just staying motivated and consistent. Pushing through whatever you do and goal setting also like again, it’s not one thing. It’s everything. It’s like a lot of little things. So, but for one word, yeah man, I would say [inaudible 01:21:55].

David: You got to be careful bro. Brandon is known for biting other people’s quotes and I wouldn’t be surprised if we’d see this on his Instagram with like a cold background, like something that [inaudible 01:22:07].

Brandon: I give credit where credit is due. I might be a quote guy, but I will give credit to you. It’ll say-

David: He’s going put, it’s not one thing, it’s all the things, instead of everything.

Brandon: Then it’ll be mine. Just different enough. Here’s my belief with all quotes, all quotes that have ever been done in the last 30 years, everyone has been ripped off from somebody else, has been ripped off to somebody else, who ripped it off Jim Roan. That’s why I believe it’s like everything is just been stolen from Jim Roan.

David: It’s like remember that book, the Six Degrees of Kevin Bacon that everyone can be related to Kevin Bacon within six steps. I think you can like every quote came out of-

Brandon: Every quote came out of Jim Roan.

David: He probably got out of the Bible or some [inaudible 01:22:47].

Brandon: Yeah, probably.

David: [inaudible 01:22:50]

Brandon: Probably. All right, final question. Get us out of here.

David: Last question of the day. Tell us Jared, where can people find out more about you?

Jared: You can find me, let’s see. Best places so Jaredbuyshouses.com is a one of my websites. Then if you want to follow me on Instagram, JaredflipsSeattle, is where I am there. So, just Google me man. I got a few websites out there if you want to connect.

Brandon: All right, good deal. All right, well let’s get out of here. It’s been a fantastic show. Jared, you are a rock star. Look forward to getting to know you even more over the next few years and keep it up man.

Jared: Thank you guys so much. I had a blast.