"Leaving Sellers Naked and Afraid"

So, the title there is a quote from a local Investor that I interviewed in my "Deals Today" Podcast which he WASN'T talking about scamming people or tricking them or lying to them.... 

      He was actually talking about storytelling and getting information out of sellers.

The reason why I interviewed him was because I've been out on deals with him and seller appointments and he is the man when it comes to seller opening up and spilling the beans. 

So, I've posted the interview transcript up for anyone interested in learning how Jim Keller (who's on BP but hard to reach), in Southern California, flips houses, does developments, and tells stories to win deals...

I also try to get his best "lead gen" methods, and he went into the ONE mindset you need as an investor to win more deals.

   Check out the transcript here, or you can listen to the "Deals Today" podcast at www.realestateaudios.com where you'll find more articles and audios on REI and deal-finding.

Transcript:

Flipping Series: Jim Keller, Flipping and Closing Deals as a StoryTeller

“The only thing I've figured out is that if I fail ten times, I'll succeed one time. That's what I've figured out.”

All right. Welcome to the Deals Today podcast and I'm your host Paul Do Campo with RealEstateAudios.com and this is where we interview the experts who are in the trenches right now, who are doing it. New or veteran, guys who can show us what's actually working in real estate today. And particularly, I like to dig into the finding deals part because that's the trouble spot a lot of people have, but we go into all kinds of stuff with these interviews. But the point of it is I don't want any fluff interviews. I want real people out here giving us the guts of what's working today. So if you're listening to this, you're probably... Who knows when you're listening to this. Maybe April, maybe May, but at the time of this recording, it's the middle of March, right at the height of the coronavirus. Everything spiraled down. The recession has started, lots of people talking about the stock market opportunities, real estate opportunities of course more importantly for us.

And there's a lot of strategies people are giving away talking about what they're going to be doing at the end of this. But point of all, we don't really know what's going to happen, but we for sure know there's going to be opportunities, hopefully a lot of opportunities in real estate, hopefully prices spiral down, especially out here in Southern California where I'm at, where prices are just ridiculously high, harder to find cashflow deals, but they're out there still today. And anyway, I'm not going to be talking about that. There's all kinds of people talking about the coronavirus out there and the point is there's going to be opportunities. So hopefully you're ready and we're going to be interviewing Jim Keller and this interview actually does go along with the whole talk of coronavirus because we're going to be talking about finding deals, finding money for deals.

And Jim Keller's a local out here in Southern California. You won't find him on Facebook. I don't even think he has a Facebook account, but you'll find him on bigger pockets here and there. But the guy, he has been in the game for a while. He is one of the best storytellers I've ever met. Seriously. I've known the guy for about three or four years, maybe longer. He was one of the first guys I went out, took me under his wing to meet sellers and I saw him first hands doing some deal closing, but where in this interview I try to dig into deal finding strategies that he uses because across the board, he's a flipper, although he's getting into some wholesaling right now because the market makes sense for it. He's done lots of flips. He's done a lot of projects at one time.

I think at the most he was managing 14 projects at a time and he doesn't have a huge team. He has maybe less than a handful of people and he is a flipping machine doing multiple deals a year. And how he finds deals, that's what I was trying to dig into with him. It always led into the mindset part, which in my opinion is extremely important. I hate to say the one thing... I hate saying the one thing, the one way to do things, there's no one way to do things, but in this instance when there's a line drawn between people who are consistently making deals, consistently being successful in life to the people who just can't get it done. If you have everything else right, your marketing, your sales are right, everything else is right, your head on your shoulders, but you just can't cross that line into making things happen successfully, usually it's because of the mindset.

And I know this is woo woo stuff, but it's really not. Jim Keller is going to get into this a lot more than I am and talk about the belief of even it stems down to deal generation, how deal generation sometimes it doesn't matter really what you do. Although in my daily newsletters, if you're subscribed to that, I do talk about some of the specific strategies that do matter in deal generation. But anyway, he goes into the mindset of things. This is the one thing, again, the one thing I hate using that word, but in this case it's true and true. The one thing that matters with anything is the mindset, your belief in actually accomplishing the task, so let's get that interview.

And one thing, if you are struggling with deal generation, you want some other extra tips, some extra strategies for finding deals, some marketing advice, you might want to check out the video that I have, it's with another local out here. A very experienced investor. He put together 40 Unique Ways, I think he called it, 40 Ways to Find a Deal. You can get that for free. If you go to RealEstateAudios.com/flipping. Yeah, you also subscribe to my daily email newsletter just to let you know on that. So head over to RealEstateAudios.com/flipping to get that.

All right, let's get to the interview. This is my good friend Jim Keller and Jim over the years has become the hot shot investor here in Southern California and he's helped many people get started at the local REI club where I go to and has helped me as well get some firsthand knowledge on how things work behind the scenes. So Jim, welcome to the show.

Jim Keller:

Hey, thanks a lot Paul. It's a real pleasure. I really enjoy... I enjoy talking to you, but it's nice to get to all of the people that you're trying to help and anything I can do. I'm an open book.

Paul Do Campo:

Awesome. So we'll start with the first question Jim. Who are you, what strategies are you currently doing and why are you qualified to talk about real estate investing?

Jim Keller:

I'm 55 years old. I've got three kids, a wife. I've been married 34 years. I really started... I've been in the business forever, but I always did it for somebody else. And it's about 10 years ago I started buying my own properties and there was a time in late '17 and '18 where I had 25 of these going on at one time. And when I say "these," I mean I would purchase, fix and sell and it was a wild ride and I'm a little slower today, but I started in construction years ago. I learned how to read blueprints. I learned how to deal with job site situations, which I could go into some really intense stories about competing or fighting with foundation contractors and what the architect says was included in the original bid and what wasn't. And there's all kinds of stories like that.

Jim Keller:

After construction, I did loans, I learned quite a bit about lending. I learned about a lot of different aspects of lending. After that, I got into real estate sales. I was a new home salesperson for 10, 12 years, something like that. And that market crashed in... What was that? '08 that market crashed? And I got into regular real estate and I think it was about late 2009, 2010 I saw these guys buying homes for 200, selling for 300. And I was making a whopping 4 or $5,000.00 commission doing that. And I said, "Hey, I'm on the wrong side of this." And really never looked back from there. I think we did four deals the first year, we did like eight deals the second year, and then from there it just kind of went crazy. So that's what I come from and now I'm trying to make my way just like everybody else. Just like everybody else.

Paul Do Campo:

You had some pretty good traction getting started. You had a few deals that year. Do you think your background in real estate helped jumping in as an investor?

Jim Keller:

I can just tell you right now. I hear a lot of new people coming to the business and they somehow think that, "Oh, Jim's been only doing this for 10 years and he's okay," or back back then it was like, "Oh, Jim's only been doing this for a few years." No one cared about me back eight, nine years ago. But this was like a perfect storm for me. Meaning, I spent too many years swinging a hammer and reading blueprints and dealing with the architects for requests for information or solving very intense big problems. We built a hillside house in Laguna beach one time and there was a big cantilever deck and literally it was like a trampoline. We had to solve that problem. We had to bring the architect out and figure all that out. And I talk about that because it's a big deal, understanding how to do problem solving with the team.

Jim Keller:

And so I had years of that kind of work behind me. And so I don't want to make it sound like, "Oh, it was easy to get into the house flipping industry," but for the most part it's not structural problems that you're handling. It's more budgetary and how to fix the house properly to resell. So, yes, all of that experience was a great base for me and moving forward from that point, it enabled me to build on top of it. And I think all of your listeners, if you're a nurse and you're used to working with doctors and pharmaceutical reps or I don't know who nurses work with, patients, family of patients, you're used to bringing a team together. You're used to diagnosing exactly what is needed for that situation. And I say that's the perfect thing to bring to this business because that's really what we do is we just diagnose problems and fix them the best we can. Sometimes we get our tail handed to us, but for the most part we're able to move on. And I'm sorry, I'm a storyteller, so I'm going on here.

Paul Do Campo:

No, that's great. That's great.

Jim Keller:

So the idea is I think anyone can do this business if you look at it from the right... Through the right lenses.

Paul Do Campo:

Yeah. Okay. And one of the things that people always struggle with, and you probably get this a lot, is finding the deals. You didn't seem to have that issue coming in or did you?

Jim Keller:

I guess I really understand that a scarcity mindset doesn't work, period. So I don't have a scarcity mindset. I have an abundance mindset and this is just games that I guess I'm playing with myself, but I think it's a winning game because I haven't done a wholesale deal in a couple of weeks. And I could say to myself, "Well, that's because there's nothing available or that's because my people haven't found the right house," or... But in the end, what I absolutely know is yesterday alone, I'm sure in Southern California, how many hundreds of wholesale deals took place? I bet you there was a lot.

Jim Keller:

Maybe if there wasn't 100 there was at least 50 wholesale deals that took place yesterday. And the only reason I'm not involved in one of them is I just didn't work hard enough. And I internalize it like that and I'm able to see myself as if I'm not finding a property, if I'm not coming up with it, it's just because I haven't talked to the right amount of people, I haven't done the work. And I see it as simple as that.

Paul Do Campo:

I 100% agree. It's just, I think everything comes down to the belief in doing it. Abundance mindset. That was my struggles coming into the game too. And everybody coming into it without a entrepreneurial background, a business background is going to struggle with a scarcity mindset. So is that what you're doing today? Wholesaling?

Jim Keller:

Today wholesale is one of my exit plans. So the way I look at the business is, first of all, every one of these houses is a real burden to me personally, the people that I work with. As we're talking here, I'm getting texts from contractors and it's a real hassle. And if you don't have a real set plan, like, "Hey, I'm going to do this, I'm going to do this, I'm going to do this." I personally, when I say "this," I mean exits. I mean, how can I get myself into this trouble... And believe me, buying a house, that nobody else wants... And that's how you buy a house for 40 percent off is you buy a house nobody else wants. So in order for you to take on that responsibility, you have to understand that you're going to be involved in a lot of things that aren't comfortable.

Jim Keller:

So for instance, yesterday I was at a house where a cleanup crew was cleaning up after the owner passed, he'd been unfortunately deceased in the home for a couple of days. And they didn't let me in the house. But that's a problem that you got to be kind of ready to take on. You know what I'm saying? And so in order to have a abundance attitude, in order to have that mindset, I believe you have to have everything sort of covered. And so in order for me to be able to go out and say, look you in the eyes, which I have looked you in the eyes and said, "Yes, I'm a buyer on that property." In order for me to do that to you and to do it with conviction and to do it to where you believe it's going to happen is I have to have a way to dispose of these properties.

Jim Keller:

And so right off the bat for me, it's easy for me to say I'm a wholesaler. Now in my own mind, wholesaling is sort of like, "Oh man, I had to wholesale the property." I like going into the house after someone's passed. I like helping the owners sift through all of their crud. Literally yesterday I was talking to this man about where the possibility... Where his father's trust would be in this hoarder's... In this house. And it was a mess. I just was at the front door looking in, but believe me, you wouldn't want to have to go through all of this stuff, but I enjoyed being of service to this guy. In fact, I even said, "Hey, if it turns out that I don't buy the property, I'm here for you.I want to help you."

Jim Keller:

So this is my business. I do this all the time. This would be the 50th house I've purchased that there's been some sort of a probate or a trust involved. I have a bank of experts, meaning, I've got paralegals, I've even got attorneys. I've got all kinds of people that can help you dispose of the property and I can come in today, just give you a price and you can walk away or you can do however you want. And if you want to use my real estate agent to sell it after you fix it up, that's okay with me too because I know if I get my real estate agent a commission on a $450,000.00 house now they're just that much more beholden to me. And it all sort of feeds back to me or that's that's what I tell myself at least, Paul.

Paul Do Campo:

Do you think that's a key then for new investors to gain that confidence when they go out meeting sellers directly to have a real exit strategy behind them?

Jim Keller:

Oh, I'm absolutely 100 percent telling you and anyone that will listen that if you don't know how you're going to get rid of the property, you have no business buying it, zero business buying it. So when I look at a property, for instance, this particular property is in Western Riverside. It's a half acre property. It's a 1300 square foot house. The house is hammered. I mean it's a mess. But it does have a lot of extra concrete where the concrete goes into the back. There is a nice shell of a home and the home that it could be is worth about 480 is kind of the number. Now for 480 I'd have to put 50 into it. So I just sort of sit here and do all of this math.

Jim Keller:

And when I'm real effective, I don't really even have to write it down. I'm pretty good at running all these numbers in my head. And I do a lot of like let's take for instance that house, it's a 450 house. It's going to cost 50 to fix. It's going to cost 25 or $30,000.00 to run the deal for five months. So I'm at 70, let's just say $85,000.00 I'm all in in costs. So if I can sell it for 450 I got to come up with a price, and it's going to cost me 85,000, what can I pay for the property? How much money do I want to make? I'm thinking like that on every deal. So that's if I fix it up. Now, if I sell it, there's a whole 'nother calculation or if I wholesale it, there's a whole 'nother calculation.

Jim Keller:

If I keep it as a rental, there's a whole 'nother calculation. So I'm constantly running all of those things and then I need this because that's what you're going to tell your contractor or the first person that walks on the job to clean up. They have know exactly what they're doing their work for. So I know when I start what I'm going to do with the property and I almost never have a variation on that. Usually I just make my mind up right away. Today I've got three projects going and those three projects are kind of in the waning moments of construction and things like that. So I kind of have an open plate.

Jim Keller:

So if I got the right property for the right price, and I could pay everybody and make a profit doing it, I'd probably take on a flip today pretty easily. That's an easy decision for me. If there was a possibility I could make even more money than I could flipping the property wholesaling it, by all means I'd wholesale it. I'm not... I don't want to burn the candle for no benefit to my household. So it's just a lot of calculations and that's how you come up with the exit is this running through all of these calculations.

Paul Do Campo:

Yeah, no, that's great advice. And so how does... I guess that just takes time. I mean, it takes time for a new guy to go through all that and experience it. How did you learn all that? It was just you already had the experience or you just had to kind of learn on the job?

Jim Keller:

I don't want to say I don't agree with what you're saying, but I don't want to make it... I don't want anyone to hear this and think that somehow, "Oh, I could never do that. That's going to just... There's a lot of experience that's, that's speaking about this." I know your wife pretty well. We've gotten together a couple of times, the four of us. Your wife is tough. Your wife listens very well. Your wife knows... She knows a lot about you. She knows what your weaknesses are, what your strengths are. And I think you have to have good people like that behind you. Okay. And what I never have seen you do is like, "Well, I don't know. Let me go talk to my wife." I've never heard you talk like that. But what I have heard you say is I've heard you say, "Well, let me think about that." And I don't think that's a bad way to go. I've got an investor that I work with where he says, there's only three answers, it's...

PART 1 OF 4 ENDS [00:20:04]

Jim Keller:

I've got an investor that I work with where he says, "There's only three answers. It's yes, no, or let me find out."

Jim Keller:

And I think that's really what we're talking about right now. So if I said to you, "Hey Paul, I've got this great house. It's in Western Riverside. I think it's going to cost 80 grand in cost to put the whole thing together. What do you think?"

Jim Keller:

The answer is, is, "Yes, I want to buy it. No, I don't want to buy it, or let me do more research on it."

Jim Keller:

And I think that all of us need to have a checkoff in your head. So yes, I've got 80 deals behind me. I've got money behind me. I've got the contractors behind me. I've got the attorneys, the escrow companies, the title companies are at my beck and call. I've got all of those people around me, but frankly, you've got the same thing. That's just a muscle you got to work. You got to go and you got to develop a relationship with them. And the only reason I have a title company that I can call, is virtually every one of these properties have a title issue. So early on I can call Porsha at First American and get right in to see her. Because she knows that if she talks to me that she's either going to get an order or she's not going to get an order. She's customer service. That's essentially it.

Jim Keller:

So I don't believe that it's 20 years of experience that makes all this happen. It helps me do it quickly. Oh yeah, it certainly does. But I'm saying if you have one of those three answers, yes, no, or let me find out, I think you can have the same impact in the business. Because let me find out is the answer to, what do you think we should offer for that property?

Paul Do Campo:

Right? Yeah. Let me find out. Yeah.

Jim Keller:

Yeah let me find out. So what you would do is what's the most a property like that sold for in this area? Okay, it sold for 450. Okay, and then what are our costs? Okay, well, the most I can offer for this property is $320,000. That's what I want to pay for the property. Now what really pisses me off is, two years ago, right down the street, I did a wholesale deal and it was a really good wholesale deal for me. And I paid $220,000 for a house right down the street. So my mind is already like, I'm already on tilt because I'm literally paying almost 100 grand more for a property. But hey, that's what's happened to the market.

Jim Keller:

So for me it becomes more about belief, because I can't believe that the guy is going to sell it to me for that price. So I've got to come and do all the work and I've got to figure it out. And what I do is, I go and I find other properties that have sold for closer to the 320 mark instead of the 450. Or what I do is I do extensive research on the 450 house. When I say extensive research, I mean I go to the house and I take photographs of things. Like for instance, the house we're talking about is a complete... The fascia board has got termite damage on it. Well guess what? I'll go and take a picture of what the 450 house looks like and really show the seller, there's one thing to say, "Oh, I want to fix it and sell it for 450, but do you have any idea of the work that's going to go in to make this house worth $450,000?" And most sellers, if they're honest, they don't have any idea.

Paul Do Campo:

I actually remember us... We've been to a couple appointments, seller appointments together. And I remember you doing that, that little demonstration of what it's really going to look like to, what the prices are going to be and what it looks like to rehab a property like this. So you use that quite a bit?

Jim Keller:

Well yeah. I think it's part of what I just was saying. Yes, no, let me find out. So that's part of the equation with a seller who's... So I got the seller and he's a, he's like... This guy that I'm talking to is a retired guy. And I did notice that he had an outfit on that had paint on it so clearly he's a handyman kind of guy. But there was a big difference between me putting flooring in my, or not even flooring, painting my bathroom or wherever, and completely redoing an entire home. There's a big difference. And so instead of arguing with him, I just point out all of the obvious things that are wrong with the property. Like, "Oh my gosh! Look at all that drywall damage there. Is their moisture coming from somewhere? Oh lets go outside and look on the roof." Or, "Let's go in the attic and pull back all of the installation and find out where is the water coming from."

Jim Keller:

And when you start talking like that to people, educating them on exactly what it's going to take, what my hope is, is if they say, "Oh, you know what? My time is more valuable than that." Or, "I really don't want to have to listen to what it's going to take to do the job. It might be easier for me just to take Jim's 320 and walk."

Jim Keller:

And there's another component to this deal too. And I guess this would be my experience. But what I do know is that seller has to tell me why they're going to sell. So I asked if they're planning on going on any vacations. Now this is a crazy conversation. This was 45 minutes in their front yard, and I literally didn't have an appointment to see them. I just was going on my morning walk and I saw all this happening and I just started talking to the guy. But what I found out is that on April 20th, they're going on a three-week cruise in Europe. So how badly do you think this guy wants to get this off his plate? So I don't know. I'm all over the place with my answer with you.

Paul Do Campo:

No, no, those are great. So that actually reminds me, the last appointment, or one of the appointments we've been on to... And I don't know if you remember, it was out in Claremont. And I got to hand it to you Jim, you're one of the best communicators I've ever met, especially with sellers. Now I'm not saying that that's what it takes to be good in this business. You have to be this slick communicator. But you actually got the seller to cry and open up into their situation. Actually, she was in tears after listening to you and talking to you. So, I don't know if you remember that. Do you remember that? That couple that-

Jim Keller:

That lady with that big rock thing in the back-

Paul Do Campo:

Yeah. And they had some issues with the business, and they had some big... I don't know. They had some deep issues going on.

Paul Do Campo:

So what do you think, I don't think it requires a great slick communicator, salesperson to do well, but what are some things that does make an effective communicator?

Jim Keller:

I got the answer for you. And it's going to be difficult for all of your 25 year-old listeners to hear this, but they actually have gone to class on this topic. And it takes you, you got to really be honest with yourself. But all you 25 year-olds have seen your mom and dad negotiate life's problems, right? I mean, I've never met your mom or dad, Paul, but you got a good head on your shoulders. You really understand where you need to be in the marketplace. You're an innovator, you've got a lot of little things that make you really a special guy. And I think that most of these investors, most of these newbies that are saying, "Oh, I can't find a deal, or I can't do this." You know, can't, can't, can't, can't, can't, they have to really utilize the things that were given to them.

Jim Keller:

And I know for 25 of my 34 years married, life wasn't easy for us. I've had to call the bank and say, "I can't make my house payment." I've had to call the credit card company and say, "Hey, I need to negotiate a balance. I can't pay you the $1,600 I owe you because I have five other cards that I owe money to, and I only want to pay you $200. Can we work this out?"

Jim Keller:

So this is the kind of experience that I bring to the table. And frankly, I remember all of this from watching my parents. My dad has passed but my mom's still around. And it's not just the good or just the bad. I learned a lot of things from listening to other people. And that particular appointment, clearly that woman was really stuck. And I don't think it's all that hard to show empathy to somebody who's in a tough place. Because even if we were born with a silver spoon in our mouth, and daddy gave me a Porsche when I turned 16. And I got my dad to buy me into USC and... I mean I don't know. I'm joking, none of that happened to me.

Jim Keller:

But the point is, is that even if all of that happened, you still were there, you still saw the difficulty it took to get you all of these things in life. And you have to be able to bring that reality to people and say, "No, I understand. You've got a business that's going to heck. You've got an IRS payment of $28,000. You've got a franchise tax board payment." I mean all of these things come into it, and you have to be able to give that to the people and then say, "Okay, with all of that at stake here, let me take this property off your hands so you can go off and do the real business."

Jim Keller:

And I've gotten good at figuring out exactly what the problem is and then saying, "So what you're saying to me, is that if you could get rid of this property and put $18,000 in your pocket, that $18,000 would then pay off the IRS lien, which would then allow you to actually use your checking account." I mean, I'm kind of joking, but I'm really not. All of this has happened to us in the time I've been buying properties.

Jim Keller:

And for me to be able to put it succinctly like that, I think first of all, people are able to go, "My problems aren't as bad as they seem." Or they're able to sigh out and go, "Oh, he gets it. Oh man. Okay. I guess that is a way to go." If you remember correctly, we didn't buy that house.

Paul Do Campo:

Yeah we didn't buy it. No.

Jim Keller:

So listen to this. I wasn't her last best option. That's a big term I like to use. The last best option. So whoever bought that house was the last best option. So somebody else listened more intently. Somebody else paid more money. Somebody else gave her exactly what she wanted. Or, she cried uncle and actually took less than what we were willing to pay. I mean I don't really know. I didn't follow up on the deal. But the point is, is that somebody else did a better job communicating, "Hey this is the best I can do and I can help you out of this situation."

Jim Keller:

And you know what's really funny though Paul, is I've got others... I think of Lisa Mailhot, is a woman that I went on a few appointments with. And it's funny because just like you're saying, she learned a lot from a deal we didn't get. I guess it's kind of fun to see you throw the kitchen sink at it and realize that sometimes you just don't get what you want.

Paul Do Campo:

Yeah, no, no. And there was another deal I thought we had in the bag out in, we drove out to San Diego. And I think you put her into tears as well. Her father died in the house. Do you remember that one?

Jim Keller:

I remember it. And that deal right there, that was a tough one. I remember that one like yesterday, because those people just came out of the ether like a balloon losing air. They were all in, all in, all in. And I think I said something that made them like, "Who the hell is this guy?" and it just ruined the whole deal. That was a real drag. God, we drove all the way down to San Diego. I remember that.

Paul Do Campo:

Yeah. It was right at her table outside. And when we wanted her to finally sign, just put the money where the mouth is and sign the agreement, that's when it turned.

Jim Keller:

Yeah. And what I would see that as... So here's my excuse. My excuse on that deal is first of all, I wanted to close it for you, okay? And I didn't want to drive down to San Diego again. And there was a lot of like that in it. And I blew it. I should have backed off the woman. I should have treated her nicer. I should have understood the depth of her despair that she was involved in and given her a breather, and come up with a reason to go back down there the next day, or three days or... A lot of times all I'll do is manufacture a reason to come back, and then come back and then close the deal

Paul Do Campo:

Examples of manufacturing another reason to come back. What do you mean by that?

Jim Keller:

Oh, okay. So listen to this one. The house I'm talking about, that I've been talking about all morning, the 450 house, okay. I'm at a little bit of a loss here because that property, I wasn't going on an appointment. My wife and I were literally walking on the street and just stumbled into the place. But in hindsight, I see that there is a culvert up at the top of the property because the property kind of raises up on the top. And I would ask, first of all, because he was trying to tell me it was a half-acre, like that was a big deal. But I come to find out a third of the half-acre, to me doesn't even look usable. So right off the bat I want him to realize he doesn't have a half-acre. You're selling me something you don't really own.

Jim Keller:

So I might start asking questions about the viability of building over top of the culvert that it's in the back of the property. And I already know the answers to all of these questions but I'm going to start asking him, because I want him to go, "Oh yeah, I guess I don't have as nice a property as I have here."

Jim Keller:

So all kinds of things. So that would be, "Is that black mold or is that just a smudge of makeup in the bathroom." These kind of things are where I really think the secondary appointment is with this guy, is what is he going to do if he can't find his father's trust paperwork? And that was his issue. Well, let me tell you what is going to happen, is he's going to go to probate. And that's a big deal. That's a big, big, big deal. So if he's going to go to probate or, yeah, I have attorneys that I already have negotiated deals with, where I can save this guy a lot of money by using my people. And of course my people are going to help me buy the property. I mean, that's-

Paul Do Campo:

So you're using... Instead of just flat-out saying, "No, you can't do..." These sellers... I come across them all the time. These sellers always have these, they're always trying to sell this big idea about the house. It's going to do this, it's going to do that. But instead of just challenging them and saying, "No, it's not going to do it," it's more of a passive, you're asking the question and digging deeper into it.

Jim Keller:

Oh yeah. I've got a seller over on La Sierra, La Sierra Avenue in Western Riverside. He owns a piece of property that you could do a lot-split and make six lots out of it. And he says that like, "Hey, could you go pick up my daughter? She's around the corner at 7-Eleven. I'd like you to give her a ride home." That's the depth he goes into where one lot changes into six lots. And I've talked to him many times about this property, and the reality is, is that I don't think the city is going to put it into six lots. And by the way, it's probably going to cost $700,000 to do that.

Jim Keller:

So Paul, do you have $700,000? So, in the negotiation process and I think what you're talking about is, look up the definition. Google the term "rhetorical question." Okay? So you want to... So the experience I have allows me not to be able to answer, "I don't know about this." I do know about it. I actually asked this particular gentleman we're talking about with the six lots, "Who in planning have you talked to about this?

Paul Do Campo:

That's a good question. Yeah.

Jim Keller:

And the guy just looked at me like, he didn't have an answer. That's where I want to leave these buyers. And this sounds kind of bad, but I'm just going to talk. I want to leave them naked and afraid, okay? If you're naked and afraid you make decisions like selling somebody a house for 50% of what it's worth. And that's what, as an investor, I didn't say anything about lying. I didn't say manipulate. I didn't say not a disclosed properly. I'm not talking about that at all. What I'm saying is that he literally thinks that property is worth $2 million. I'm looking at him like... That property on a good day is worth $700,000. And I already know that multiple people have offered him $700,000 and he said no to it. It's probably, it's going to sit like that for a long time until he decides, and actually until he passes, or I don't know. If you wait long enough, it'll be worth 700,000 [inaudible 00:38:24]?

Paul Do Campo:

Right, right. Yeah, that's true. Actually that's something I've... Something I was talking with another investor about is he bypassed a deal or a lead because they didn't seem motivated. Although they had a motivational situation, but they were "real estate professionals" already. But even real estate professionals given enough time are going to become motivated. They're going to actually see the situation come to light and eventually they're going to need to make a deal with somebody. Right?

Jim Keller:

Well, I have another situation that I was involved in where a couple called me, wanted me to purchase a lot in Canyon Ridge. You know what I'm talking about? Up in Riverside off of Van Buren?

Paul Do Campo:

Yeah.

Jim Keller:

And I'll be honest, I sort of dropped the ball. I talked to them, I put together a, well what if I did this, what if I did this? And I got busy doing something else and I didn't follow up. And I kind of flaked on them to be honest with you. And then I was doing some goal stuff in December, trying to figure out what I was going to do and how my business was changing. We do that every November-December at our house. And they were one of the people in the back of my mind. I was like, "Oh, I still have an opportunity on that lot." But I kind of lost the moral authority to call them. Does that make sense? I kind of let them down and like, I don't like being a liar and I don't like, I hate braggers so I don't want to be the guy, "Oh yeah I'll buy your lot. All cash. I'll close...

PART 2 OF 4 ENDS [00:40:04]

Jim Keller:

Right? So I don't want to be the guy, Oh yeah, I'll buy your lot, all cash, I'll close fast, and then sort of disappear. I felt like an idiot. Okay. So I was at Bruce Norris's, the turmoil, last weekend. And first of all, I'd never met these people and a woman comes up to me and she goes, Jim Keller, Oh Hey, I guess you didn't want that lot. And right away I knew exactly who she was.

Jim Keller:

Isn't that funny? And so this is an investor. They've done very well in their lives. They had visions of developing this lot, building a house for their daughter. Or their daughter had other plans. Their daughter got married, moved off to wherever the hell and they paid $8,000 for this lot in '79 or whatever. I'm making all of the dates up and everything. But the point is, they don't really need to sell, but it's a loose end in their estate, they want to get rid of the thing. And I literally, right there, I apologized, I told them that I flaked, I own the whole thing, and today I'm talking to them about purchasing the property from them.

Jim Keller:

I know that this happens and I'm not the decider. To quote George Bush, I'm the decider. If the people decide they want to sell the property, I'm not going to get in their way of doing that. I think that a lot of young investors try to make decisions for people. Like, oh, we're not young investors, I made the decision. I told myself, no, I'm not going to call them because I screwed up, and I've got so much pride, I can't even swallow it to go buy this deal. Which by the way, I think I could probably make 80 grand if I bought it for the right price. And you just got to swallow it and go.

Paul Do Campo:

Hey, let me interrupt you to tell you about the free video you can get called 40 ways to find a deal. It's a presentation done by a local expert out here in Southern California. His name is Steven. He's a flipper. He was a hard money lender. He's now building tiny homes for landlords. He's been immersed in the real estate business and he gave a presentation a couple of years ago on 40 plus ways to find deals out here, especially in Southern California, which is a competitive market. It's things he's done, things that his acquisitions team has done, and you can get that for free at realestateaudios.com/flipping.

Paul Do Campo:

Depending on when you're listening to this, you also get some free bonus PDFs that I give away, and you'll be subscribed to my daily email newsletter where I talk about some principles of marketing, business, real estate, mindset, everything in between. So, head on over to realestateaudios.com/flipping to get those.

Paul Do Campo:

Have you experienced a lot more failure and lost deals than home runs in your career?

Jim Keller:

Oh, what are you kidding?

Paul Do Campo:

That's an expected answer.

Jim Keller:

That has to be a rhetorical question. Well, for all of you folks out there that are listening that somehow think that I've figured it out and I've got the answers and I know this and I know that, the only thing I've figured out is that if I fail 10 times, I'll succeed one time. That's what I figured out.

Jim Keller:

And it was literally less than 10 hours ago I was talking to my wife, who has an opportunity to do some probate work with a couple of local attorneys. And I said to her, the more of these properties you get to touch, the more opportunities you're going to have to do a deal. And that's it right there. So there's a lot of work that will be involved in her taking care of this new operation she's looking at. But what I know is, we might do four deals because of her proximity to all of this buying and selling. And being in that proximity, to me is what is the success formula.

Jim Keller:

So it includes failing a lot. And driving down to San Diego. And I bought your lunch afterwards, I felt like [inaudible 00:04:25], that I kind of dropped the ball. I take it all personally. I mean, that's what makes the people cry when they're in front of you. Because it's important to me that we help people out or we do the right thing. And when it doesn't work, it hurts. It hurts. I remember you had a deal like that. Remember that deal?

Paul Do Campo:

Yeah. In Riverside. And I dropped the ball too. I did drop the ball on that, only because the whole situation was, the guy was homeless and he was too afraid to live in his house that he inherited because his mom died in it. And he needed cash, he needed money, and I made a deal, I think it was 280 for the house, seller financed, 10 grand down, $1,000 a month, no interest until whenever it's paid off. Which was going to be a great deal.

Paul Do Campo:

But when I showed up to the house to actually see. I mean, I made the offer sight unseen to him over the phone. And I showed up to the house, because he mentioned there're renters, and the renters, I met them, and they're actually a good family. And I had the mentality of, Oh no, I'm going to kick these renters out. And I kind of spoken in that mentality to, to them, you know with mannerisms. They lived in the house, they saw it as their home, and they saw me as an attacker.

Paul Do Campo:

So, right after that they called the homeowner and made a deal with them to buy the house. So I could have done some creative things with that. I could've sold them the house with a wrap mortgage of some sort. But either way it was a lost deal. But my mentality coming into it was I was attacking the people. They're a good family. They lived in the home for years and they saw it as their own home and I was there as the attacker rather than somebody to solve the problem. They couldn't afford the house with their bad credit. I could have easily solved that problem.

Jim Keller:

Yeah. You got ahead of yourself a little bit. And I think almost every deal I ever lost is because I didn't cover this properly or that properly or I got ahead of myself or I made a promise that certainly I could keep, but in doing so it kills the deal. You know what I'm saying? I think that's where the experience lies. And if you just use the rule, yes, no or I'll find out, when you're dealing with these people, I think it goes a long way. I think it goes a long way towards helping people figure this out.

Jim Keller:

Because we all have stories. This is another direction in our conversation, but recently I had a house that I was going to lose a lot of money on, like over $100,000 on one deal because it was a real screwed up deal. And I've got a whole litany of excuses as to why this happened.

Jim Keller:

So I went to a friend of mine who I have a lot of respect for and he's done over 800 deals. So this is a real smart guy. He's had a lot of success. And when I told him I was going to lose $115,000 on this deal, he says to me, not bad, you got out pretty easy, didn't you. And I sort of rolled my eyes like, shit, I don't feel like that. Then he tells me the story of a house he had out in Lakita, and he had about $630,000 worth of red ink on this deal. So he was at $630,000 and he says to me, that's not bad at 115. I'm just telling you, this is part of the business. This is just part of the business. This is what happens. You got to learn how to roll with the punches. You've got to learn how to take it all.

Jim Keller:

I had another awakening like that a couple of months ago. We hired a consultant to help us with a commercial project that we're working on. And this guy has got a great gig. He's like an expert on site planning, and he's got a really great understanding of how to mix in a mixed use development. Like what type of commercial you want with condominiums, or what type of commercial you want with rental property. He just had a very nice handle on that information. So the group I was with paid $10,000 for this report that he was going to give for us.

Jim Keller:

Before we met in person, him and I, I was the manager of the, of the deal, so I'm setting all this up with him, and he says to me, Jim, before we start, how many properties have the bank taken from you?. And like the dunce that I am, puffed up my chest and went, no properties, the bank has never repossessed a property from me. Thinking that I was the smartest guy in the world.

Jim Keller:

And he said to me, well, the clients that have lost properties, there was a certain amount of wisdom that that loss has purchased. That was a real like, ah. That's what I want the people, the investors, the new guys. There is no such thing as a bad thing that happens in our business, because it's a longterm deal that we're involved in here. And you just learn things.

Paul Do Campo:

You mentioned you're managing that deal. So let's talk about partnerships. I hear a lot of stories of bad partnerships, bad JVs going sour? Do you deal with partners today?

Jim Keller:

I have one partner who is my main JV partner, and I have other folks that I've done business with. I'm like a main sponsor. I'm the the top of the food chain. I have other guys that have that role in their organizations and the two of us would come together, or three of us would come together.

Jim Keller:

I've got a commercial project that I was working on. I've kind of taken a backseat role on that in the last couple of weeks. But yes, I think that's like all of you kids that are 25 years old hearing this saying, Oh, I would like to be here, I'd like to be here, I'd like to be here. Five, six, eight, 10 years of hard work will get you in a situation where somebody else will say to you, Hey, I've got $1 million I'm putting into this building and I really need your expertise helping me do this, this and this. Because he's seen you do it for years and years. That's sort of the lucky position I find myself in today.

Jim Keller:

And it's a big roller coaster. Those aren't easy deals to ride. But I like a joint venture. You just have to be very strong. The only reason I've been brought in, or the only reason I would ever ask anybody to do something, to joint venture with me, is because they can offer me something I don't presently have or I don't presently want to spend the time to do. So if it's not a reciprocal agreement, it's not going to work. Period.

Paul Do Campo:

When you were starting out, how did you come about finding private funders? I know that you did some hard money lending with Todd, because Steven brought that up, but was that your main source of funding when you started?

Jim Keller:

So, I did something that I wouldn't recommend. I'm not recommending this, I'm just saying I sold the home I lived in. I put about $180,000 in my bank account, and what that did for me is it enabled me to have operating capital and I wasn't sitting there saying to myself, Oh, I've got to do a deal and I got to get a check in four days or I can't make my house payment. I wasn't in that kind of a situation, and it kind of gave me a little bit of space to operate in.

Jim Keller:

But my very first deal I did, I worked with a guy, I don't want to say his name, but he was Israeli, he had an accent I really didn't understand. I met him on Bigger Pockets. And essentially what he did is he went and got the loan and then charged me a margin on what he was getting. Like, I can get a loan tomorrow for 7%, for 90% on almost any project out there. Those are the lenders that come to me saying, Hey, this is what they can give me.

Jim Keller:

And so what he was doing is he had the same people and he would go and find a guy like me and give me a personal loan for the 10% difference and charge me some big massive 14.5% on three points. And I think the guy probably made $8,000 or $9,000, $10,000 on my first deal I did. But it was good for me, because I didn't have to risk. I put probably $20,000 in the deal and I was able to get the whole thing done.

Jim Keller:

And at the time my money was really important. And I was like, Oh, I'll just pay a little extra and get this whole thing set up. And I did three deals with him, and finally I realized, Oh, I'm paying too much. And I met Steven and Todd, I think it was their second meeting at their Inland Empire Real Estate investment club. And I started talking to them, and they had a product they were selling. Come to find out they'd never actually done a deal with it, it was their first deal. I think that part's kind of funny. But, at the time deals were relatively easy to find.

Jim Keller:

I put together a couple of quick deals, they funded them for me, and I am under the impression Paul, that financing is easy to find it, it's the deals that are difficult. And the only reason deals are difficult is because people go out and look at 30 properties and go, Oh look, [inaudible 00:54:47] to buy. Well you know, that's not the answer.

Paul Do Campo:

I've been out to your rehabs and I remember you were running, well, you still do, you run multiple projects at the same time. How many projects do you have going on at a time usually?

Jim Keller:

So I would say over the last five years I've had at least seven to 10 going on at one time, sometimes as many as 25. And today we've got three or four going right now.

Paul Do Campo:

So, the most you've had, 25 at one time?

Jim Keller:

Yeah. I might be selling that everything was okay and I was effectively managing 25 deals. It was a three ring circus man. It was too much. I didn't really have a team for it. The problem is when, like I was saying earlier, this business is about going and listening and weighing what the problems are and then figuring out a way to go forward and then following up and making sure that's being done properly.

Jim Keller:

And when I was stretched so thin like that, I missed a lot of things. And in doing so, there was a lot of problems. The contractor screwed up. I had one contractor who was just a flat out criminal and did horrible things to me on a property I lost a lot of money on, that was one of them. And then I hired another contractor, and there was all kinds of legal troubles with him because he didn't have the proper paperwork.

Jim Keller:

Like I said, it's just a three ring circus, and it's making decisions that I never would have done, that I didn't typically do, but I got, just like the people I buy from, I got kind of stuck behind the eight ball and was looking for the easy way out. Because if four of my problems could be taken away by making a decision, I did it. And it ended up really hurting me a lot.

Jim Keller:

So if you're looking for a nice number, I think three properties is a good number. If you can start a project and get it to get into a place where it's being completed, and then start another project, and then start the third project when the first project you've started is virtually done, I think you're on a great pace. And you could do 12 deals a year on that pace. And if you're going to make $40,000 a deal, that's a pretty nice living.

Paul Do Campo:

Yeah. Were you managing all these projects by herself?

Jim Keller:

Yeah. I was managing them all myself. Now I had a very competent project manager that operated as the contractor on a few of the jobs. The problem was is that the other contractor that kind of did me wrong, he was sort of left to his own devices and that's really where we got into trouble.

Jim Keller:

But I operate the company with my wife and daughter, who are the real estate side of the business and the design. And if you've ever seen any of our Facebook or Instagram stuff, it's really my wife and daughter that operate that part of the business.

Jim Keller:

I have a financial partner that works as a CFO that keeps all of the books, writes the checks, does all that kind of thing. And his assistant, she helps with making sure the gas is turned on. I mean, for 25 properties, just paying the bills is a full time job.

Paul Do Campo:

Yeah. And would you ever recommend for a new investor coming in, might have a little bit of managing experience, wants to learn the business, would you hire somebody like that? Maybe you're not even hiring, maybe just has an internship or something like that, to go into your projects and manage them for you so they can get the on job learning as well?

Jim Keller:

Yeah. You know, Paul, I guess I'll put the word out. If anyone, in the show notes you'll be able to figure out how to reach me, but I would talk to anyone like that. I think that's the right way to do the business. And I think that in the end, really what I'm doing is I'm training an investor who I will become their money partner in five years.

Jim Keller:

That's always the way I've seen it. That's always the way I've looked at working with all of these people. And it's just difficult because everybody, like a minute ago I made a comment, yo, you'll make $40,000 a deal. Well you know, oftentimes 40 becomes 20 and then there's a problem on one of the deals and I got to pay 20,000 for a settlement, and I just made nothing. So it's a big juggling game where, yeah, there was a lot of money that comes in, but there's a lot of money that goes out. It's not as lucrative as everybody thinks. There's a lot of expenses, and management would be one of them.

Jim Keller:

So yeah, this fictional guy that you're talking about that's listening to this right now who's going to contact me. He's like, Oh man, I'm going to make a lot of money doing this. Well, no, you're not, because there's just not a lot of money in the deal. It's just the way it goes. I hope I'm not bursting your bubble here, but that-

PART 3 OF 4 ENDS [01:00:04]

Jim Keller:

That's the way it goes. I hope I'm not bursting your bubble here, but that is the reality of it. I think you know this, too.

Paul Do Campo:

Yeah. No, I wrote an article about it. And people getting started, I think it's important to actually get immersed into the business. Go out and find deals, yeah, but there's a lot of moving parts when it comes to a deal. So getting immersed with somebody else. And doing it for free, even, being on their side and either finding deals for them or managing things for them. Management and finding deals are probably the skillsets that everyone needs.

Jim Keller:

I was at lunch on Friday with one of my friends, Jason. And Jason was a guy who worked for me for a while, and he's working with another gentleman in town. They have big, big projects. They have eight or nine multimillion-dollar flips that they're doing in Silver Lake, and Glendale, and Mount Washington. Mainly Los Angeles projects. They've got a couple here in Riverside. And I was a project manager, like a for-hire project manager for him.

Jim Keller:

So I met with Jason yesterday, and Jason was just sort of like, "Ah, I'm real frustrated, and I don't get the proper support, and I don't get this." And I looked at him and I said, "Dude, you've got to figure out a way to do this job and do it well for two years. Because the education you're getting on how to manage job sites, and how to deal with project managers, and how to deal with architects ... And how to deal with Fernando, the lead foreman for the foundation company that's doing a $400,000 foundation. Okay? That's a real intense learning curve. And if you can figure out how to put a $400,000 foundation with 29 caisson piers that go 35 feet into the ground ... " That's what this job was, okay? "If you can figure out how to operate in that space, buying a home in Riverside for $320,000 and putting $50,000 fixing it up and reselling it for $450,000 is a walk in the park."

Jim Keller:

And that's what I was telling him. And just exactly what you were saying there is you don't have to be the owner. Work for an owner, work for somebody. Watch them and make a bunch of mistakes, watch them lose money. Watch them triumph. I've been to many parties where they had Macallan 20. Come on, I've got no business drinking out of a $700 bottle of whiskey. But I've been there before, someone's poured me a glass because a big deal went down, and everyone made money, and everybody's happy. So being a part of that is kind of a fun thing. I guess it's why we're in the business, 'ay Paul?

Paul Do Campo:

Yeah, I agree, I agree. It definitely takes, I guess, a village to become an entrepreneur.

Jim Keller:

Yeah, for sure.

Paul Do Campo:

Yeah. And before we recorded this and got on the phone a couple days ago, you mentioned how you have to keep doing things to move you forward. That was a comment you made, and that was pertaining to new investors. Do you know what I'm talking about? Can you describe that a little bit more?

Jim Keller:

For me, this whole business sort of revolves around the idea that I have to be able to get up every morning, I have to be able to shower, I've got to be at a site at a certain time, I have to be doing business, or I get real stagnant. And I start to degress. I start to think, "I can't do this." There's a lot of emotion that for me personally kind of goes into this business. And I hear people tell me all the time, "Oh, it's an emotionless business, and you can't be emotional." And I don't believe any of these people when they talk like that.

Jim Keller:

So I think that there are things that you have to do for yourself. I'm constantly looking for a reason to do the right thing, to find a new thing to kind of hold onto, and how to find deals. I was at the courthouse a couple of days ago trying to find a deal. All of this stuff revolves around me wrapping my head around what I do and why I do it.

Paul Do Campo:

Yeah. I hate to go into this question, because you kind of mentioned already how finding deals is a whole mindset thing. But if you're starting out today, and you're brand-spanking new, right out of the package, what would you do when it comes to finding deals? What would you do today?

Jim Keller:

If I were somebody listening to this, and they decided today they're going to go off and do something, I would literally start in the neighborhood that I live in. I would walk, and I think in two hours you could identify four to six houses in your neighborhood that don't look right. So what "don't look right" means is ... It's February what? Whatever it is, it's early February. Most people have taken their Christmas lights down. Okay? So if they haven't taken the Christmas lights down, it's like, "Hey, there's something off there." At my house my wife is on me a couple of days after the epiphany. It's like, "Hey, we've got to get rid of these Christmas lights." And if that's not happening, there's something going on there. Okay?

Jim Keller:

If the grass isn't mowed, if the house is in disrepair, if there's 55 newspapers on the garage approach. If there's 11 bottles of Sparkletts on the side of the house, which I guess they don't do Sparkletts anymore, but you know what I'm saying. All of the telltale signs that things aren't right inside the house. I would just walk by, and first of all, I would make a list of who these five to six people are. And from there you could go on Redfin, and you could look up the property, and you could see, I believe it says who the owner of the property is, and you can do a little bit of research on Redfin. You can get an idea of what it's going to sell for.

Jim Keller:

And anyone can go on Google and say, "How do I develop comps, comparable pricing, on Redfin?" There's a million videos on that. I won't go into that. And if you determine, "Oh, this house is worth $400,000." You do the same computation I just was saying. "It's going to cost me $50,000 to fix, it's going to cost me ... " This to me is a whole 'nother class, but I would do a computation on what I thought I could pay for the house. And then I would brush my teeth, and comb my hair, and put the best foot forward for myself.

Jim Keller:

Now I didn't say wash your Mercedes, and pull up in front of the house with your sunglasses and your shirt undone, and say, "Hey, I'm here to buy your house." I'm not talking about that at all. I'm saying show up like a humble person, like someone who's willing to help, with a spirit of helpfulness. And actually knock on the door and say, "Hello, my name is Jim Keller. I actually am considering purchasing a home in this area. And I drove by your home and it seems like your home would be perfect for me. Have you ever considered selling your home?" It's that simple. And then just shut the heck up. Just don't say another word. Let them tell you all about their problems. Let them tell you about everything.

Jim Keller:

So that's six houses, or four houses, or even if it's only three houses that you could do today. And you can listen to what they have to say, and the answer probably 95 out of 100 times is going to be, "No thank you." So, before I used to just walk away and go to the next house. Now I track all of that in an Excel document, and I say, "Oh, I spoke to Paul, and Paul said this, and Paul's having a problem with this. And his wife has got this problem, and then his son just went to jail." I don't know, whatever the story is. But they always have a story, and I put it in my little book and I move on.

Jim Keller:

And when I'm stuck and I don't have anyone to talk to, I go to my list and I just go to their houses and I say, "Hey Paul, did your son get out of jail? Hey, how are things going?" Because the reason why I like those cruddy houses in the neighborhood is, who do you think I'm going to buy at a discount? A cruddy house or the best house? And my whole goal is to buy houses at a discount. So I've just got to find the one seller who's got a cruddy house that's willing to take less.

Paul Do Campo:

And you know what, speaking of humble, I remember going out with you for the first time. And I had this imagery that we'd go door-knocking, we'd dress nice, have a nice car, wear polo shirts, slacks. But when I went out with you, we rolled up in front of the seller's house, you parked in front of the seller's house. And we were in your beat up Corolla, or actually, I don't know what kind of car. The point was it was a normal, average car. And you had jeans, and no tucked shirt. I don't know if you're wearing a tee shirt or just maybe a button up shirt, but it wasn't tucked, short sleeved. Showing up humble, that's really what I remember about you, man. You really show up humble, you don't show up as a slick salesman every time.

Jim Keller:

Well, I don't think anyone really wants to deal with that guy. And the funny thing is, it's one of the things that I love about working with my wife, because she has a tremendous amount of empathy. And oftentimes when I'm with her ... And in fact if I really remember correctly when we were in San Diego, she was with us that day. She's under the table with her foot on my foot, tapping my foot. Like, "Ah, what are you doing? What do you doing?"

Jim Keller:

And in fact, just a couple of days ago I was with her, and we were talking about somebody. And I made a comment about the size of this woman. It's the first thing we said when we walked over. She said to me when we walked away, "What the heck are you doing talking like that?"

Jim Keller:

And I go from, I've got to be honest, and I've got to be good to these guys people, and I can't lie to them. I can't ... I think the word is "placate". I can't tell them something that's not really happening. I have to be the bearer of bad news. And I've got to do it with a smile, and I have to do it humbly. I can't be malicious in the way I deliver this information. And I say to myself, "Hey, that's why I want to be sometimes brutally honest with people." Because I'm not really there to be their friend. Okay? I want to provide the best service I possibly can for them, I want a bag of property at a price that is mutually acceptable for the two of us. And it's kind of like making sausage. No one wants to see it get done. But ...

Paul Do Campo:

Good point. Yeah. All right, before we wrap it up, Jim, is there anything else that I missed you want to talk about?

Jim Keller:

Well, I just want to say that the business of being a real estate investor has kind of helped me make a lot of the dreams in my life come true. I love the business. You get to meet really nice people. Paul, you being one of them. I enjoy talking to you all the time. You're a good honest guy, that I care about what it is you're saying. And I get to meet a lot of people like that. And when you're dealing with hundreds of thousands, even millions of dollars, when you're trying to make these decisions, you either get the absolute best from people, or you get to see them at their absolute worst.

Jim Keller:

And I think that's sort of a good thing. That's sort of what makes us as human beings effective, or good. I want to say God put us on this planet to give our 100%, to give our best. And I like this business because it enables me to do that. If I'm talking to some guy who literally three days ago lost his dad, and I'm trying to show him the empathy of that happening. Or talking to this stinking contractor that keeps texting me all morning here. And I'm thinking to myself, "He already knows the answer. He's just trying to make it look like he cares about what it is I'm doing." I love the opportunity, I love the idea that we get to all work together. And I hope that was coherent enough for everybody to hear me say, that it's a good business and it's worth putting the work into for yourself.

Paul Do Campo:

Yeah. Yeah, that's great, man. I appreciate that info and that wisdom. I think if they want to get into this business of real estate, I think they need to figure out, first of all, what type of investor they want to be. Because I figured out just now I don't want to be a buy and sell ... Because as an investor, you're either a passive investor, buying deals here, here, and there, parking money into it. Or you're going to be a volume guy like yourself, you constantly have the volume coming in, and you're selling it, you're a buy and sell guy.

Paul Do Campo:

And I figured out I don't like being a buy and sell guy. I don't like that part of it. There's actually nothing I love about it. And so I learned after all these years of door-knocking, being in front of people, getting doors slammed in my face, people calling me back and telling me to F-off because of my low offer. I learned that the type of investor I want to be, the whole reason was cashflow and to have a passive source. It's not for buy and sell, it's just, "Hey, somebody got a good deal. I want to park some money into it."

Jim Keller:

Well that's funny because not only is that where I'm at, all of the big guys, the guys that have done a hundred deals that I know, that's what they're talking about. They're like, "I don't need to do 20 deals a week," or whatever the hell. "I just need to be able to find one or two pieces of property every year for the next two or three years that I can't replace for cheap, that are good, quality pieces of the real estate. And if I can find one or two of those a year for the next couple of years, I won't have to ever work again." I know that's where my head's at right now.

Paul Do Campo:

Yeah. No, I agree with all that. I think the new guy has to figure out what they want to do as an investor. And a lot of people go into bigger pockets and get the shiny object about wholesaling and flipping. And they could be great, they can come out really good at it, but they can also figure out the hard way that it's a lot harder than it looks. And that's in every marketplace. You have the people with the shiny object that want to get rich overnight.

Jim Keller:

Yeah, they have to learn their trade though.

Paul Do Campo:

Yeah, exactly.

Jim Keller:

I think becoming somebody who knows how to buy cheap and dispose of for a profit is an important part of it. I think where my problems lied is I thought somehow I could create wealth that way. And in the end that's not the answer. So now I'm this guy who knows how to buy on the cheap, and can sell for a profit. And I don't really need the profit now. I've got a really nice fourplex in Riverside right now that we're probably all in on about three and a quarter, and it's worth like six hundred. And we're into it for cash. We pull out about $4,200 a month. It's a nice deal. I love this deal. If I could do three or four more of those, I could retire to be honest with you. So we're trying to put stuff like that together right now to hold.

Paul Do Campo:

All right Jim. Yeah, we're going to wrap it up there. I appreciate it. All right, that's a wrap, and I hope you enjoyed it. And if you did, please go ahead and subscribe to it on iTunes, Google Play, Spotify, or whatever you use. It really helps me keep producing these. Just search for the Deals Today podcast in your podcast directory, podcast app. So if you're not on my daily email newsletter and you want to be, and you want to receive the free 40 Days to Find a Deal seminar, go ahead and go to realestateaudios.com/flipping. Again, that's realestateaudios.com/flipping.

PART 4 OF 4 ENDS [01:17:27]