020 - Find Your Throttle

2 Wealth Show S3 Ep20 – Find Your Throttle

 Super E and Justin interview Dave Short on episode 20.

 Key Takeaways:  

1. Diversify Your Investments
2. Understanding Value
3. More You Give, Get 10 Fold Back

 Resources and links discussed  

• Videocast on BrightPath Notes YouTube Channel 
• Videocast on Elizabeth Maora YouTube Channel 
• BrightPath Notes Website - https://brightpathnotes.com 
• Elizabeth Maora LLC Website - https://elizabethmaorallc.com 
• Dave Short's 3 Day Bootcamp - https://CIREIA.club

 
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 About the Hosts 

 Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!  

Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.  

  Connect with the Hosts: 

• @2wealthshow – Facebook/Instagram 
• @wealth_show - Twitter 

Transcript

Justin Bogard: 0:06

[inaudible] Welcome to the 2Wealth show, a show that shares how you can create real wealth for you and your family. I'm one of your hosts, Justin Bogard. And my co-host is Elizabeth Sickles, AKA super E. I am a real estate note investor specializing in performing residential real estate debt. I find the deals acquire them from my own portfolio, as well as educate investors while walking them through the process of owning a real estate note. My co-host super E, a real estate investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in between. Our show was sponsored by bright path notes and Elizabeth Maora. You can find out more information by visiting our websites at brightpathnotes.com and elizabethmaora.com. Welcome to another edition of the 2Wealth show. This is episode number 20, and I am Justin Bogard with BrightPath notes. And

Elizabeth Maora: 1:16

I'm Elizabeth with Elizabeth Maora

Justin Bogard: 1:18

Elizabeth. How are you today?

Elizabeth Maora: 1:20

I am doing fantastic. How about yourself?

Justin Bogard: 1:22

I'm doing really well. I just bought a travel trailer and so me and the girls are kind of experiencing a life out there in some of the campsites for a little bit. So they're, they're eager to get out there, uh, either actually last night.

Elizabeth Maora: 1:36

Well, that's exciting.

Justin Bogard: 1:38

Yeah. Yeah. You never know how much you have to prepare, uh, for when you get something like this. So, you know, thinking from like, okay, I need to get like, you know, special toilet paper, right. And you gotta get certain cleaning supplies and then you have to, you know, minimize the amount of weight that you have when you're pulling it around. So it's just a whole new dynamic for me. So it's like has, it's pretty interesting. So I've learned a lot so far. It's like I had a crash course over the last couple of weeks.

Elizabeth Maora: 2:06

Congratulations

Justin Bogard: 2:07

On how this lifestyle is. So thank you.

Elizabeth Maora: 2:10

And speaking of being prepared, we have a very special guest today who has been in real estate for 47 years and still going 90 mile an hour. Um, so without further ado, we'd like to welcome our guests, Mr. Dave short, uh, to the episode. So welcome Dave. It's

Dave Short: 2:32

Great to be here. Thanks for asking.

Elizabeth Maora: 2:34

Absolutely. So 47 years of it, can you tell us what is, what's a biggest lesson you've learned so far?

Dave Short: 2:45

Um, my biggest lesson that I would take to new people getting in it, I'm kind of a deal junkie and I don't have anybody sometimes to put a throttle on if you're a deal junkie, give somebody that, that can put a throttle on him.

Justin Bogard: 3:07

Yeah. So, so what you're saying for our listener here is that what you see a deal, you just try to try to make it work with your numbers and how you can exit out of this. Is that, is that what you're saying?

Dave Short: 3:20

And, and what you do is you sometimes get off your rail without somebody looking over your shoulder and say, Hey, are you sure you want to do this? So, uh, that's probably as big as, you know, trying to make every deal work. I mean, I'm, I'm really not that guy. And I, I understand value sometimes fairly quickly so I can let it go a deal go very quickly. So

Elizabeth Maora: 3:48

That's in, who is your throttle? Is it a business partner?

Dave Short: 3:54

Marty is probably my wife. Marty is probably my biggest throttle, but, um, uh, the situation with her, sometimes I can steamroll her. Sometimes it doesn't work out well. And every once in a while, I'll get one of those I told you. So, or what were you thinking here or

Justin Bogard: 4:20

So, Dave, you you've had a pretty long journey here from the time that you started getting in real estate to fast forward to today. I know Elizabeth mentioned how many years you've been in real estate. So like when, whenever you first started like really being a real estate investor, what was like, what were your seeing yourself doing, uh, beyond the next five to 10 years? Did you see yourself just further advancing your career or just, you were just wanting to do this as a hobby? Well,

Dave Short: 4:48

W one of the things that I did early on is I tried to, uh, create, um, Create tried, tried to create four or five businesses within the real estate business, meaning that if, if, uh, rentals, you know, one of them maybe being rentals, one of them would be brokerage in real estate. One of them would be flipping houses. One of them would be buying and selling notes. So I would my thought process, if one of the areas was down, one of the other areas would pick up. So consequently, if the brokerage hit the tank, then now I'm looking to acquire rentals early eighties, you know, the brokerage hit the tank. So now we're trying to acquire the point, a lot of rentals on it. So we're trying to keep a cashflow based on each one of these quadrants that I would kind of dabble in and, you know, I've always been a learner. Uh, so I, I'm a, I'm a big goal setter. I've also went and read a lot in regards to goal and taught a lot of classes in regards to that. So, uh, it helps it help kept me, you know, keep me on track.

Justin Bogard: 6:06

That's awesome. That's a, that's a great thing for new people to understand, to be totally diversified within the general real estate world. Right? So it sounds like you have like a pie, then you have a slice of pie that you learn along the way so that you can choose in whatever economic cycles going on in real estate where you want to put most of your efforts so that you can be, I assume the most profitable that you can,

Dave Short: 6:29

Well, it's most profitable, but, you know, just creating, you know, generating income for yourself and in regards into the area that would be working well. And that, you know, in that specific area, in that specific time, I mean, in the early eighties, we did some brokerage and we got very good at creative financing, but, you know, and people are saying today in today's economy, man, we'll be dead at the interest rates jumped to five or 6%. We will placing 30 year fixed mortgages at 16 and a half percent. There were buyers. Well, it is hard to believe in. And then some of the things that we said and, and talk to people about, and then thinking, man, we'll just kill it. If the interest rate just gets to 10, just needs to be a 10% and we'll kill it. So, you know, seeing these kinds of rates today is, you know, is, is just like candy.

Elizabeth Maora: 7:28

Absolutely. And are you doing the mortgage stuff now, Dave,

Dave Short: 7:33

We do, uh, some of the mortgage stuff that we're doing now, and we're doing maybe three to four year, we would do more, but we're buying property, doing modest rehabs and then creating mortgages. Okay. Well, we've been, you know, those are, you know, those are the best things since apple butter. I mean, creating a mortgage is just unbelievable from the returns that you can get on these kinds of properties and they're, they're easier to sell than a flip

Elizabeth Maora: 8:07

Well. And how many, what is the most amount of flips that you've done in a one-year period?

Dave Short: 8:14

I think about four years ago, we did 42 flips in one year. Wow. So, uh, we were shaking the move in that year. So yeah, we were, we were pretty busy. Yeah. They were a little bit easier to find. And we've tried to scale that back, uh, with the same profitability. And we can talk about that later because that's, that's kind of where it's at. It's not numbers. It's how, how profitable you are on your flips.

Justin Bogard: 8:43

I was just doing some quick math here. That's obviously between three to four a month that you were averaging in that time period. Wow. And that was the 2017 ish time

Dave Short: 8:53

Period that was in 2017, 2018, uh, product was a little bit easier to find them with Sheriff's sales and some of our networking partners that we had. So that's kind of why we did the numbers that we did.

Elizabeth Maora: 9:11

You know, one of the things that's great about Dave because he has such an amazing reputation and has been in the industry so long is people call him for deals because they know he'll close. They know he'll buy it. No problem. If it's a deal. So I think that's a huge Testament just to your integrity and to your reputation.

Dave Short: 9:29

Yeah. We're, we're very blessed with, uh, with a good network and, um, and we, we try to make all those deals, deals happen. And quite honestly, doing that, we've able, we're able to scale back. We'll probably do 22 or 23 this year. And our profit will be double what it was when we did 40.

Elizabeth Maora: 9:52

Wow. Congratulations

Dave Short: 9:54

Just from a management standpoint and just being substantially more targeted in our flips and what we do.

Elizabeth Maora: 10:02

And can you talk a little bit more about that, Dave, to help some of our listeners and our viewers, because we do, you know, we, we want to get to, oh, you know, we want a hundred doors or we want to be doing 40 flips a year, but can you talk more on the monetary side and even just how you guys, you know, have come to, okay, you're doing more, but you're, you're doing less and making more, you're more profitable. Well,

Dave Short: 10:23

Um, one of the things in, in doing more, number one, we were when running ragged, we didn't do as good a job today as, as we did, we were willing to take lower margins because they sold and we knew we could move them out, but just my wife and I, you know, to a point it's it's age, you know, we don't want to run the hectic. We run a pretty hectic lifestyle on there now, but we felt that we could do 20 flips at, at, at double the profit that we were doing 40 flips at. And, uh, this year, for instance, we'll probably close in that 22, 23 range. And our goal in our goal for this year was 20 flips at$20,000. So that's a, that's a pretty good income. Um, and I bring a lot of, and I have a lot of private investors that I do my deals with, uh, with the situation that, um, uh, the 20,000 is the 20 that I receive in my investors are either getting a return on their investment or their JV in with me and making the making$20,000 also. So we've, we've stepped up the numbers that we do. Uh, and one of the things that as we're entering different marketplaces, what we'll do, you know, we'll do a hundred thousand dollar flip on it, then that's not a problem. We'll a$500,000 flip, but even if we do the a hundred thousand dollar flip, we've just staggered who we use. I mean, we have bits and pieces of four crews that we use for it. And I've got one crew or two crews that I'll use on a house that's going to sell for under 130 on it, because those houses we're not necessarily going in before, when we were at a bunch of flips with always put granite in either as a hundred thousand dollar flip, well, it isn't necessary. So we put the same products in the hundred that we did in the 400. And so consequently, we were overspending and material three to$4,000 on a specific flip. So we, we basically took that, knowing that that person at$120,000, we'll take a house that's, uh, above a rent ready rehab, but it doesn't, we don't have to spend a lot more money to do that. So, you know, we're more likely to put in, um, a refrigerator and$120,000 a house than we are, uh,$250,000 house with the thought that the$250,000 a person has the money to buy their refrigerator, the one 20 doesn't. So we can, and then if we put it in, we can choose it and put it into to make it more vibe because they don't have that$900. If they're only putting 3% down to buy the refrigerator. So we make our house more attractive to them is held a sense. And we'll, you know, we will do a laminate countertop. I mean, even in a small house or a granite or quartz countertop is going to be 17, 8, 1800 bucks. And we can put a laminate that you can't hardly tell the laminate today from some of the, some of the granite and it's$200 to put that in. So, um, you know, we're very cautious in what we do in those houses. So consequently we've, you know, we've done three houses under 130 this year. And, and, you know, we've made 25 to$40,000 on each of those houses, um, by just managing our cost and our time time constraints. And I do a lot of coaching. So, you know, it's, you know, a new flippers point of entry is, is really, really important. So we have, you know, if I'm going to coach it, I have to be able to do it myself, to put them into the product. So that's why we don't have a problem going in to a, you know,$120,000 all in flip on it because that's where the newbies need and want to be. And we want to be able to coach them through that product, then they can, so they can make money on their flips.

Justin Bogard: 14:55

Yeah. That was some, some great insight as to what you do and the numbers that you mentioned, uh, south of$130,000 property to make that much profit. It sounds like it's a whole lot higher than most flippers that I know. So you're obviously your experience has weighed in to where you're able to.

Dave Short: 15:10

Yeah. And they're all not that good for sure. But we're, we're new at we're, we're getting in these properties and doing a good job as far as what we, what we do to them, you know, before I would maybe automatically put all new windows in them. Well, we can do that, but, but now we've got guys that we don't go to a window company to do that. We, we go by our windows for$110 at a Menards, and we get a guy to put them in for 50, where if you go to window world, which is the flippers go, or a company like that, you know, they're going to spend three 20 or three 30 and opening on it and they're going to wait five to six weeks to get the house done. So there's a lot of ways to cut, uh, without giving away quality and in entry level type, you know, entry-level type houses.

Justin Bogard: 16:03

Yeah. It makes total sense. So just back up for our listeners. So I don't think we've mentioned this, but Dave is a local to the Indianapolis area as far as, you know, Elizabeth and I, uh, where we do our business at, and he's, uh, been a wealth of knowledge to all the new people coming into the real estate world and Dave's experience and his, uh, total transparency as to how he runs his business and to how the numbers work and just to helping and offering, you know, great advice to people, uh, without asking anything in return is he's been just a Saint for our local CIREIA organization on central Indiana real estate investor association. So, Dave, I just want to personally thank you for all the stuff that you've done. I've been to some of your classes before your, what we call your little subgroups. And, uh, you, you always give some sort of, he's an information that everyone's just like, oh, I never thought about that. Cause all your experience, you just kind of share and, and pay it forward to other people. So you've been a true blessing for all of us to have. And, and the listener here, uh, day's probably the most well-known, uh, real estate flipper that we have in our, in our Indianapolis area. So when he speaks or gives advice or something, you know, you want to pay attention and listen to what he has to say, because it will add value to you at some point.

Dave Short: 17:15

Well, we like doing that stuff. I mean, I enjoy doing that and giving back and, you know, uh, obviously I figured out early in life that the more you, the more you give you'll get 10 fold back on it. So that's never been a problem. One of the classes that we're going to have, I haven't decided if it's going to be a subgroup or for our main meeting at CIREIA, I normally do it once a year, but I'm going to take one of our houses and totally break down. And it's going to be one of the houses that I got my kicked on. Um, uh, you know, we're not perfect. We get in deals and, and, uh, it just doesn't go well, but there's a way to handle that deal. And, and, and still be in the business after it's over with. And most of the people that get in that they're not in the business afterwards. So we try to take them through one of our really poor transactions and how we acted and what we did and how we treated investors that was in that deal. So it's, um, it's something that, uh, you get both sides of it. It's not all, it's not all fun and games and it can be very stressful,

Elizabeth Maora: 18:35

You know, that's, that is a good question, Dave is how, you know, especially because you and Marty, Marty's his wife, you guys work together, you know, obviously you're married. So how do you deal with things, you know, dealing with a spouse that you work with all the time, whenever things are going totally crazy with as many flips and as much as you guys have going on in real estate, how do you keep that kind of sacred?

Dave Short: 18:56

Well, she's, she's, uh, you know, one of the things is she's as passionate about the business as I am. Okay. She enjoys the end result as much as I do when we get a house done. And we're, we're basically on, uh, for, it's not like a better term. It's the perfect term is like, I'm a visionary. I see ahead. I see things, I see what a house can do and be my wife is a facilitator. So basically she supports me and I very seldom get in her lane. And she very seldom gets in my lane. She gets in my lane more than I get in her. And so it's like, I mean, if I go in the morning and it's seven o'clock in the morning and I'm writing the check out the checkbook, what are you doing that for? Where's that going to make a copy? I mean, it's like, I don't even want to do it. I just want to tell her to write it for me and get it. But she's in her lane, I'm in my lane, she loves to go to she's okay. Going to Lowe's and picking out everything and getting, you know, and hitting the houses. And then she goes back at the end of the house and make sure it's detailed out and is on the contractors to, Hey, you got a punch out list of 15 things. We need to get over here and get this done for the house. It goes on to market type thing. So we have our own lanes and, um, you know, w we've got, I mean, we're very blessed. We've got a perfect marriage in regards to, she has her life. I have my life and we have her life together. And it just, and it just works Third grade, 38 years. So, you know, uh, we've tested, we've tested the timeframe here,

Justin Bogard: 20:53

Dave, I have a question for you here. So in your whole real estate career, do you have like a favorite part of real estate that you just love to do all the time and in a part of real estate that you don't really like to do? So I know you've done pretty much everything in real estate that you can do for investing.

Dave Short: 21:11

Um, you know, flipping is our passion on it. Uh, I'm a, I love to find the deals and work out the deals and do the deals. And then, you know, we have good team members that we can, once I get it, I can set everything in motion and can just make a call. So I can just do my, do my deal. The insurance, Marty takes care of that. She takes care of the utilities. She knows what I won't do and, and, uh, or not, you know, just not consistent enough to do so. I really liked the flipping side. Um, probably the least fun side that we had was in the rental side of the business. And we were, we at one point we had a hundred single family lease shop, lease options. And when we had those, we just hated life, uh, trying to, we were just chasing, chasing our profit every month. You know, it's like when you have a hundred houses with fairly decent tenants, we were self-managed. So Marty managed all the properties. And, uh, so when, you know, when we would get all of our would pay to have our payments in the rental property paid a month ahead. So the first 10 days of the, um, of the month we'd get the payments for next month and the next four or five days, we would start to, you know, get our buffer that we always build in. And then the last 10, 10, 11 houses we're chasing our profit. So we're, we're chasing our profit every month on it. And that's the hardest thing about self managing on the property, but yet we felt we were better than any. And the managers today are a lot better than they were when, when we had those properties. Those were in the late eighties, early nineties, you know, starting at 2000, 2002, but the property manager and the tenant base, you know, some of the things today that, that I wouldn't necessarily tell somebody not to buy rentals because I think today done properly. The tenant base is very good compared to what we had back in the late nineties, early two thousands. So the tenant base is so much better today than it was, um, uh, than it was back then. And, you know, some of the things that we didn't have with the management of property, we had tenants that could only be renters. I mean, they could only be tenants. They could never be buyers where I think the key today for people who's managing rental property is that, that I wouldn't take a tenant on a property that I owned, unless they could be a buyer because they're going to have different sets of qualifications criteria, uh, taking care of their house. Um, you know, being more honest about getting their rent paid, but if they're always going to be a renter, then they have no reason to care for your property. So I want, I want tenants that want to live in a home and not just live in a house. So that part of it can be done today. Uh, with in the managers are a lot better. I mean, they're just a lot better Sterling Davis, we thought city, and there's just all kinds of guys, like not all kinds, but there's a lot of people out there that can effectively manage, you know, manage properties. It's kind of rambling, but

Justin Bogard: 25:05

Yeah, no, that's a great answer because the mentality of that tenant versus that potential owner is totally different. And I couldn't agree with you more and I'm glad that you said that

Elizabeth Maora: 25:18

And David, I want to touch on too. You mentioned the coaching. So Dave does a lot of teaching. He teaches classes on how to rehab correctly through CIREIA and also coaching. So can you tell our listeners a little bit more about what you offer for students?

Dave Short: 25:34

Well, I do a, uh, if you're a member of CIREIA, then once a month, I do a subgroup called dinner and deals with Dave and I come in and I, and I normally give an in-depth analysis of three properties that we're working on. One that we've just bought, one that we're, uh, halfway through. And one what it looks like at the end. So we're kind of rotating those houses every month. So when you see the house, first of all, that we just bought it. You're probably going to see it in one of my classes when we're done and what our projections are for profit and timing and all this stuff. So it's, and we give you the good and the bad with, with the houses that we buy in. So it's a, um, it's an insight that people have, uh, also, uh, which we can cover later, but we have an event center and a coworking space in Irvington. That's the headquarters for CIREIA? Well, in my coworking space, I don't do one-on-one coaching. It's pretty expensive. If I did it, it would be two to$300 an hour to do that. But if somebody wants some coaching and wants to be a part of a, a real estate incubator, for lack of a better term, if they join my coworking space as a member, which is$129 a month, every other Monday, I make myself available from 10 to noon. And we just talk about what you got going on in the real estate and how we can help you. So you can effectively, every other week get$400 worth of coaching or questions answered or something that's going on. Plus you've got a good atmosphere to work in where you'll be with light kind individuals. And we have, you know, we have 10 or 12 people that's joined just to kind of get that, get that coaching. But if somebody is really serious about the coaching, then I do a three-day bootcamp, uh, through CIREIA and it's coming up at the end of October, but, uh, we'll spend three days, two days of lecture. And one day in the field analyzing actual properties that we have going on, we have one that's, you know, we're just starting, we have one that we're halfway through and one that we're probably done. So the students can see how they should, how they should present a property. You know, we talk about, you know, one of the biggest things with students is, well, I've been out here and, you know, I've been looking for a year and I can't find anything. Well, I don't know how that's possible. If, if I can find 25 to 40, right? You can't find one. So, you know, we spend about a half a day on helping people, trying to find these properties. And, you know, we give first time we did the class, about four years ago, we had like 10 strategies to find houses. And today we have some around 35 to 40 strategies to find houses. Yeah. And I can bring my born into it and say, look, we did 25 houses this year. And of these 25 houses. There's 12 different strategies that we've used to find these, this is where these houses came from. So we utilize all of the strategies that we, that we try to teach. So it's a, it's a PR actually, it's a pretty cool class. I'm, I'm pretty proud of it. And you know, the, the statistical average, if you go to a fortune builders, great program, great stuff, the fortune builders is$40,000 to go to their five day camp. And we've had people come into our, and their statistical is about 10, 12% of the people actually do deals on a consistent basis. And we're on our students were average and about 50 to 55% of the students do deals.

Elizabeth Maora: 29:54

That's awesome.

Dave Short: 29:56

And, but they have, you know, part of our classes, they have me to coach him through their first deal. So, you know, there, the rule is, if you go to my class, you don't buy a deal. Unless I pass on it, that I've got to look at it and say, Hey, here's the deal is like, I would never buy this house. Or you could probably buy this house and make a profit, but I wouldn't buy it. And the other one is, if you don't buy it, I'll buy it. Then you should only close on that one. There's a reason I'm not doing a deal. Then you, you, as a rookie flipper, shouldn't do the deal

Justin Bogard: 30:35

So they can contact CIREIA.club for more information on that three-day bootcamp program. Okay. Once again, that's a CIREIA.club is the website go there and you can find Dave's three day bootcamp there. So Dave, we are out of time for today's episode and we truly appreciate you staying on. And actually, Dave, we'd like to have you on again, if you're willing to, uh, uh, wrap with us again and record some more great insights that you have about real estate.

Dave Short: 31:02

I've got it. I can do that.

Justin Bogard: 31:03

All right. Well, um, don't forget to, not only do we have Dave's coaching class, but so, um, for the note investing side, we have our constant cashflow, uh, class for, uh, uh, program, excuse me, not class, uh, go to our website, brightpath notes.com. And you can find our constant cashflow, uh, training course as well. And Elizabeth, uh, she has Elizabeth Maora university. And Elizabeth, go ahead.

Elizabeth Maora: 31:26

Yes. So you can find us at elizabethmaora.com for your online program.

Justin Bogard: 31:31

Okay. All right. Well, this was a great episode. Number 20. We appreciate Dave short being on. We're excited to have part two of this as well. And I'm Justin Bogard with bright path notes.

Elizabeth Maora: 31:40

I'm Elizabeth with Elizabeth Maora. Thank you everybody.

Justin Bogard: 31:42

All right. Thanks guys. The 2Wealth Show was produced by Justin Bogard and super E sponsored by Brightpath notes and Elizabeth Maora. Thanks for listening and watching for our show.