Seize the moment & Grow | Your Biggest Deal ep. 6

Joseph Williams: 0:00

Welcome to your biggest deal podcast, with Joseph Williams Max, connecting you with top real estate professionals and entrepreneurs from around the country about the deals, strategies and motivation that made them successful and will help you reach the next level. This is your biggest deal with Joseph Williams. Welcome to the your biggest deal show where we discuss all things real estate and connect with amazing investors investors around the country to do a deep dive on what they consider their biggest deal. today. We have Sarah and Anthony gear with us. Thank you so much for taking the time to speak with us. And enlighten us a little bit about your story and journey in real estate. If you don't mind, if you could just give us a short bio, about who you are and what market you're currently I'm sure. Thanks

Anthony Gair: 0:55

for having us, man. We really appreciate it. So I mean, Anthony, obviously, we're based in Houston, Texas, we've been investing for about, I'd say about a year and two or three months now, right at the beginning of you know, the whole pandemic, that's when we kind of dove into investing. We really started because we had a time, right? We were both working from home. We had read a couple books, listen to a couple podcasts and felt inspired to kind of take control of our finances and invest in real estate to create, you know, essentially financial freedom, right. And so we've been fortunate to be super successful and have helped people along the way. So we're super excited about it.

Sarah Gair: 1:36

We're based in Houston.

Joseph Williams: 1:38

Yeah, there you go. There you go, Texas. Well, from my knowledge, Houston has a massive market. And it's somewhat competitive of finding deals down there. So to kick it off year one and consider yourself pretty successful. That's definitely a great way to jump in. So you said you're working from home, it was Milla COVID. And you had your head and some books and started listening to some podcasts. And you were looking at creating financial freedom for yourself. You hear that a lot. And once you kind of dive in, you realize, obviously it's very attainable, but it's a lot of hard work to write.

Anthony Gair: 2:16

It's long night, it's early mornings. It's it's the weekends, right? Like, it's not like an hour to a day, right. So we spent a lot of time doing real estate.

Joseph Williams: 2:25

Yeah. And that's great. It sounds like you didn't overanalyze too much after learning. I tell people biggest thing is analysis paralysis out there. And, and you can learn a lot but you learn also a ton by doing and kind of just jumping in and getting that first deal under your belt is one of the best things you can do. So before we kind of jump into your to your biggest deal, can you tell us about like your first deal and kind of how you started in real estate. But I got to just kind of sum that up. Yeah, so

Sarah Gair: 2:55

our first deal was on the MLS. And it was a deal that was listed for quite a while and it was listed pretty high. And it came from just persistence with just following up with the other agent and the seller. So Anthony actually called like four or five times and just kept offering the same amount over and over and over again. And finally they gave in because their the price that they have is just way too high. So we ended up get it was listed for like 140 We ended up getting it for 93. We did a $15,000 rehab, we got really lucky because we had a mentor help us out on the contractor side. So we got a really good price on everything. And then we ended up that was our the first deal we did was a brrr. So buy rehab, rent refinance, repeat. So it was actually one of our first rentals. And we still have that one today. It's actually good rental. I haven't gotten a call from the tenant recently.

Joseph Williams: 3:46

Hey, yeah. Yeah, that's, that's awesome that you were able to do a brrr for your, your first deal and hopefully get the majority if not all of your money back out of it. And recycle and repeat. Right? That's, that's the goal with that. So when you jumped in, you bought this sucker, you did a rehab, you know, is good to great. You had a mentor was that a friend or a paid mentor? What?

Anthony Gair: 4:13

So it was essentially like a mentor of a mentor, if that makes sense. Right. So it was kind of a mutual connection that we had, and he was willing to kind of kind of just help us out. Right? I'm sure you gotta charge way more for the work that he actually performed, but it only costs us 15,000 That was our budget. And so we only have to come out of pocket, you know, six or 7000 for the entire deal. Right? And so Oh, nice. I think we had the opportunity recently to refinance and pull money out but it just didn't make sense because it wasn't like you know, that much money right? So yeah, it's a good deal and

Joseph Williams: 4:46

Oh, that's awesome. Yeah, I mean to get your first deal under your belt and only come out of pocket six or seven grand. I mean, I think that's one of the big things is a lot of people they talk about refinancing their burgers and and pulling on every penny they can and a lot of times it's like It's not that big of a deal. If you can refund the answer and get breakeven, you know, a lot of times that helps with the overall cash flow and kind of getting that passive. Once you get 10, or 15, or 20, or 30, or whatever it is, on your bill, it helps with that monthly payment, versus, you know, the cash on the front end. But yeah, for sure. So you say you learned a lot off that I'm sure you've learned a lot dealing with contractors. And it was great to have your mentor along for that ride. Because that's always one of the biggest things when you do your first rehab. You didn't just buy a rental, you bought a rental and a rehab. So that kind of led you indeed to your current track. Can you tell us about your biggest deal? I know you gave me a little insights that it was a big rehab, and your biggest project to date. I'm assuming you've done a bunch in between. But let's fast forward and just tell me about this big, big deal you've done. Yeah,

Sarah Gair: 5:50

so it's actually a deal we just finished up doing and we have it listed now we listed it last week. The reason why I started biggest deal is just probably because at the scale of it, we had foundation repair, new H fac new ducting, new insulation and water heater, new plumbing, electrical all basically all new everything, we gutted it, we toured out a lot of walls to open it up. And then on top of that we did a cosmetic rehab. And we learned a lot of stuff along the way. Because this took a lot longer, the rehab took probably a month longer than we wanted, there was a freeze in Houston, and then storm storm or something. So it pushed us back a while. And then we just didn't seem to help our contractor enough to make sure that it was on track. So that was one of our biggest learning lessons from this film was just making sure that we stay on our timeline because as you know, the hard money loan, the longer you're in it, the more money you're spending. So

Joseph Williams: 6:46

so so I'm assuming that's how that's how you financed everything that they give you the purchase price and some for the rent out or were you coming out of pocket for a portion of that.

Sarah Gair: 6:56

So our hard money lender gives us 70% of the ARV. So the ARV that they evaluated, his house was 330. We bought it for 220. And then we did a$55,000 rehab, and then the cash out of pocket that we had to come out of pocket. But the 70% didn't cover. We had private investors gave us the money for that. So we paid them back. And then we give them the 20% return on the back end, on top of whatever they gave us really pay back the harmony.

Joseph Williams: 7:27

Nice. So over the last year, you guys have really learned how to leverage hard money private money. And all of the investors out there they're looking to partner with real estate investors and make a little profit with their interest without having to come on up hotkeys pocket significantly for these deals, which at the end of the day, helps you scale as as an investor, right, because a lot of people they try to fund everything yourself. And if you've never you've never learned how to use use other people's money, it makes it very hard to really ramp up and and build that large portfolio. Yeah, absolutely. So

Anthony Gair: 8:08

you know, like you said, leverage other people's money and do multiple deals at once. Right. So that's kind of the goal to scale as quickly as possible.

Joseph Williams: 8:16

Yeah, the you said you just spent 55 grand on the rehab. I know that can go very quick with foundation. All alone, right? I've seen foundation repairs in the 10s of 1000s of dollars. So that seems like a pretty good deal to get most of the major systems as well as a full cosmetic as well as a foundation or 55. Because I know I've gotten stuck before in 1000 square foot ranch. I've been in it for 70 grand. Yeah, that's like, Man, I should have just rebuilt this thing. So when it comes to that, are you just are you partnering with one GC or one general contractor and kind of just managing him and then letting him manage all the subs? Are you trying to bring other people you know, in like, Oh, I know a roofer I know, a foundation guy, and then letting the GC handle some of that as

Anthony Gair: 9:04

well. Yeah, so the GC handles everything but the foundation. We got lucky we found the foundation guy that's been great. I mean, he is by far the least expensive resource that we've we found when it comes to foundation.

Sarah Gair: 9:18

It comes in like less than half from everybody else. Yeah, it's

Joseph Williams: 9:23

yeah, you call one of the ones on the yellow pages. It's like

Anthony Gair: 9:28

are you sure like is the rice you know? So? But yeah, the RGC kind of handles everything. And I think he gives us the best prices because he feels like a part of our team. I'm sure with any other general contractor this rehab would have been 70 80,000 Right. So yeah, we just kind of got lucky.

Joseph Williams: 9:47

Yeah. And so you said you bought it for 220. You got 55 and it and then probably includes your Karen call, so I'm assuming are now. carrying cost

Sarah Gair: 9:57

includes repairs as well. As all of our interest in our utilities, we were planning on selling for 330. The house next door actually just appraised for 390 and sold for 400. So we have it listed at 370.

Joseph Williams: 10:13

Yeah, that's always gonna ask when you bought this sucker months back and started this, the market just continued climbing. Were you going to make out a little bit I've had a couple had forgotten at one time here in the Richmond area. And it seemed like every single one of them I was able to list for probably around 30,000 More than I originally had under underwrote the deal at. So I'm just like, Okay, let it ride, let it ride will do well, that's great that you're going to be able to elicit for 45,000 More, and then hopefully get multiple offers no inspection, all that fun stuff that we're seeing right now. Is Houston, still kind of in that world? We're in November of 21? Right now? Are you still seeing just multiple offers everywhere? And appraisal addendum? So you know, things like that?

Sarah Gair: 11:01

Yeah. So we actually bought the house down the street from the one we just put on the market. And we're in the middle of flipping that one. And we ended up offering 20 $25,000 more cash close in two weeks, basically, like the best offer we could offer. And we won that one, obviously, for flipping it. But yeah, it's crazy. They got like 20 offers, we made an offer a couple weeks back we offered$50,000 above was price cash close in two weeks. And we lost because someone offered like$100,000 above list price. So yeah, it's pretty crazy.

Joseph Williams: 11:38

No, do you think do you think some of these ones? Are people that are looking to buy it and make it their primary residence? Like buy it fix up a little bit? And then move in? Or is it just other rehabbers that are offering that much?

Anthony Gair: 11:51

It's probably a combination of both honestly, like, sometimes we run our numbers, like we'll lose a deal. You know, we'll go back and say, hey, you know, what was the winning? The winning? And we're like, how are these people making money? Like, how are they doing?

Joseph Williams: 12:04

Yeah, so yeah, I

Anthony Gair: 12:06

can I can tell you.

Joseph Williams: 12:08

Yeah, now, you know, deals a source of money away, right off market. And when you're the only player is obviously the number one maybe cold calling, you know, and you're working one on one with somebody, when you're advertising and you're doing pay per click campaigns on Google, you know, odds are they're getting on there, they're clicking on two or three and putting information on so you're still competitive their situation. But some of these ones, you know, we're working with wholesalers, and even virtual wholesalers that are posting deals. I'm like that how does? How does anybody buy and fix it? How are you? Or I'll tell you something that's really I've seen a lot lately. And they're like a Facebook groups and things like that. It's just you see a deal. And then everybody's in the comments just burning it up. Because it's a for sale by owner that's been out there forever overprice they've talked them down 10 grand and then they're listing it back, you know, to the investors at the same price. It's pretty much been listed it for sale by owner on Zillow for six months, and it's like, hey, this isn't a wholesale deal. Like the guy's got it owns. Okay, now, not to say that that doesn't happen. But you know, a lot of times it's sold. Does that make sense? So when speaking about that, how did you find this deal? Was this MLS Okay, so your your first one and I do find that a lot of them on MLS,

Sarah Gair: 13:24

my real estate license like auto searches and stuff set up, we find a lot on the MLS, the MLS is definitely trickier because there's so many people and the easier it is to find, the more competition you're gonna have. Right? So if you go direct seller, obviously, you might have one other person who's also gone to that seller too. So minimize your competition, but we've had a lot of luck with the MLS, but it's definitely persistence and just constantly looking.

Joseph Williams: 13:53

Yeah. Are you calling expired listings, things of that nature as well.

Sarah Gair: 13:56

We tried that last time, and I was just a lot of the time by the time I got to them, they had gotten four or five phone calls already. And you just show me that are expiring.

Joseph Williams: 14:09

And plus they're looking for like a full retail price if odds are expired, right? Like if it's any kind of a deal. People are already you know, making an offer on it. So, you know, they're they're willing to play ball odds are they're their listings are expiring in MLS after whatever 180 days. So when winning over the last, whatever, 15 months since you've started, did you get your real estate license,

Sarah Gair: 14:34

so I got it? Probably right and COVID Hit we did a couple of deals with a realtor. She was amazing. But realtors have that's their full time job. They're helping other clients. And if we need comps run on 20 deals. I mean I can run comps in five seconds, right and he has access to my MLS so he can run them as well. It just it reduced that bottleneck. So we did it almost immediately after the first two deals were like wow We can save on the commission, we can reduce the bottleneck of making offers, and we can reduce the volume of making reading comp. So it makes us move much more quickly and much more efficiently.

Joseph Williams: 15:09

Yeah, so smart, especially early on, I think maybe after my third deal, I went got my license. And yeah, I just helped out, ah, you know, friends and family when it comes to it. But then for me, like you said, I'm always saving 3% on the back end, you know, by cash up front, saving three was on the back end. That's another thing when you're underwriting the deal, I'm like, how these people doing it, they don't realtors, and everything like, like, I'm killing all the religious fees, except, you know, when I sell this, and that, I still can't make it work in my head. But I want big juicy deals, right? I want your biggest deal. You know, I don't, I don't want ya know, just a 15 $25,000 deal. If I'm gonna I will we, we have full time job, you have a full time job. So I don't want to take my time out in the market, if it's not going to be very lucrative at the end of the day. So So you got this thing on the market right now, let's say you get full asking price, is that going to be your biggest profit flip to date? Is that what you're banking on?

Sarah Gair: 16:10

Probably no, we were gonna list it 330. So if we get 370 It'll be $40,000 more than we're planning on? Sure. And you're planning on 30. Before I said, probably $70,000 profit.

Joseph Williams: 16:26

There you go. That's what those those are the ones I look for all that when when wholesales calling me even like at the buck 50 or, you know, whatever I tell them, just don't even look at the house. I'm like, I need $100,000 spread. So like if it's a buyer for about one, you know, whatever, for 106. And if selling for 230 here, I mean, obviously, there's no renovation budget in the middle, but I can buy one at one of the six and then have a RV you're showing me at 130 Because the time time I buy it, and I got home calls, even if it's only 10 grand in it. And then I got Realtors fees and property taxes. I'm just like, Whatever, I'll go do something else. So that those are the ones I like to and like my gut now just told me those ones that are in that, you know, 100,000 to 10,000 range. If you have 100,000 spread, like run don't run run to that wholesaling for sure. So how did that change your life so you know, you've been rocking out you've got you know, 10 deals on your belt over the last year or summer burrs. Some are rehabs or flips. I've you wholesaled a couple of them along the way as well. Yeah, we've done

Anthony Gair: 17:32

a handful of wholesalers as well.

Joseph Williams: 17:35

Nice, nice. And that just That's some good money to play to. And, and I think that's something that some people forget, you know, when you become an investor, it's about being flexible, right? And, and once you learn all of those different dispositions strategies, you know, or exit strategies, wherever you call it. You know, it makes things a lot easier, because you can look at deals all day, and do you used to walk away from now you're like, Ooh, I think I can get seven grand out of this and wholesale it to a buddy or, you know, I think I can do this and rehab it and get some extra money out of it, or whatever it may be. So so it seems like you guys really have ramped up in the last year from getting a real estate license to wholesale to burr to flip. I mean, you're you're a dynamic duo, you're gonna you're scaling quick. So that's great. So as you, you know, looked into the future, and you're, you know, you've done, you've done these burgers, are you looking to continue finding single family homes? Or are you trying to maybe scale into some, you know, for plexes or eight plexes out there?

Anthony Gair: 18:41

Yeah, so, so right now we're finding and trying to find even more flips. Obviously, we've got the baby on the way. So we'll probably try to scale back just a little bit for the next four or five months to kind of dive into multifamily. And that's been the goal for the last probably four or five months now. But it's just been tough trying to find multifamily deals, because everything's so expensive. And we got a mentor that has about, you know, three or 400 units here in Houston that's willing to partner with us. And so we have somebody that's essentially holding our hand and so so that's kind of what we're looking for now as well. We're looking

Sarah Gair: 19:17

for you had a deal we were gonna do and it was 50 units before you before we raise the capital because once we started kind of marketing ourselves and Instagram and also that sort of stuff. We got a bunch people coming to us saying hey, like I wanna invest with y'all see a lot of friends and family and then we had some random people that are like, I want to invest with you guys too. So we have a huge list of people we raised all the money and then the sellers ended up finding the brokers packet of how much money an investor like us could make and they're like, Well, we're gonna do the work ourselves. And then backing out and do it redoing it themselves and now relisting and they just kind of took a lot of skin off the bone.

Joseph Williams: 19:56

Yeah, so it was It wasn't like a private owner just like he had one or Was it a, like a small corporation?

Anthony Gair: 20:03

Those three individual guys that owned it? Yeah.

Joseph Williams: 20:07

Yeah. Yeah, that's, that's a tough one, you know, it's a lot of them are, you know, big companies are gobbling them up. And that's that kind of sweet spot between, you know, I don't know what to say maybe eight to 50 has kind of, you know, we're, it's not large enough for them to bring in, on site property management, they still have that, like a management company, run it from, you know, a different location. And finding those is tough, because it's not as easy as looking at someone's name and skip tracing, and you're looking at CS and SCC. And, you know, I know, there's some guys out there that, you know, I've heard them did they use a, you know, a lot of the commercial commercial software's that are out there versus, you know, skip tracing and whatnot. And if you do a search, I just did one recently, in my market, Houston is a lot bigger for apartment buildings that are owned by individuals, so not been LLC, just someone's name. And it took it from, like, 26,000, down to like 300. Because, I mean, most people are putting it in some kind of entity for protection. And now, I want you to get to, you know, above the single family realm before units, and a lot of those individuals, like I knew their names, because they were just like, old families from the area that I've known on a ton of real estate. And I guess these are ones that have just kind of dragged along and never, you know, quit claim deed it into an LLC, or whatever. So it was like, well, good luck with those guys. Because they, they trade them off market between each other and other big money. So scaling into apartments is the goal. And you've kind of done a lot over the last year, flipping to get some more cash into the business. So you can look at, you know, apartments or, or other burrs where you might not make 100. You might not get it all back. But it makes sense. Because it's on a college campus and you get more rents or whatever it may be, what tips would you give to someone that's starting out, you know, tomorrow, that's kind of where you guys were you you've read a couple books, and you've listened to a couple of BiggerPockets podcasts? What would be your biggest tip?

Anthony Gair: 22:27

I would say, just kind of understanding your strategy, right? Like understanding, you know, this is the first step right? This is what I need to do, you know, you know, work with a lender get pre approved, understand what market you want to be in, understand kind of your financial situation, right? Like, how much money can you afford to invest? And then and then, like I said, your strategy, right? Are you are you wanting to flip? Are you wanting to wholesale? Are you wanting to have a rental, just so that your mind isn't all over the place? Because you're kind of diving into this game.

Sarah Gair: 22:59

And I would add on to that, and just say again, I've said this multiple times just persistence, right? Especially in this market, there's so many, there's so much competition, if you're not making offers, and if you're not evaluating deals, you're not going to get a deal, right? You have to make 20 offers to get one person interested. So just constantly looking for deals, and then having multiple streams of deals coming in right? MLS wholesalers for sale by owner, going straight to the direct to seller and doing different marketing campaigns and stuff. Otherwise, I mean, if you're only looking on one thing, you're not going to find a deal takes a lot of time. That's probably the what we focus on the most once you find the deal is easy, right? The rehab is easy. posting it and listing it, it's easy. Finding the deals. That's what we spend all of our time on.

Joseph Williams: 23:45

Yeah, yeah, that's great advice. I say that all the time. I say find the deals the hardest thing you have to ask me is like oh, you're doing this I'm like yeah, but the hardest one is you just find it and find that another one Yeah. And and I use that when people hear people say like, oh, just you know, become a master at this become a master or whatever, Google AdWords or become a master at you know, you know, make mailers or whatever, but I'm more in your boat or do you kind of dabble and everything and if as long as you're persistent, inevitably kind of it kind of comes along. And the biggest thing is is lead generation and if you can, if you can do that then like you said, the rehab and all that it might take a little longer you know, the expected here there might cost a little bit more but it'll get done at the end of the day as long as you're on top of it. So the biggest thing you can do is is lead generation out there and become become an expert in what you're doing. And and I know we've mentioned bigger pockets a couple of times when you were starting out you said your read a couple books and listen as a podcast. What were some of your go twos.

Anthony Gair: 24:54

So we listened obviously bigger pockets. Like you had mentioned coach Carson's podcasts were listened to Are you? We read the bird book by David Green, who's kind of a part of that bigger pocket family. YouTube, I mean, we were just like, just trying to find as much information as possible. But we wanted the information to be kind of targeted to what we wanted to learn. Right. So yeah, we just do like specific searches to birth or you know, first time investor, how do I get started type of deal? So

Joseph Williams: 25:28

yeah, YouTube University is a great, a great source for sure. Right? And you just can't get wrapped up in too many gurus pitches, and then people send you a you know, Bill for $30,000 just doesn't get get the information and jump in for sure. And bigger pockets is obviously always, you know, the biggest resource out there. Now. To go back, kind of like where you're at in a major market that's I consider competitive from what I've seen, Houston, are you guys focusing on just around you? Are you looking at the entire city because it's what the third biggest city in America man or something like that. So I mean, I know it's massive Are you kind of focusing around you were, you know, the neighborhoods are usually very broad. And the kind of assessing is what deals come along. So I

Sarah Gair: 26:17

grew up over in the city, and now we live in the suburbs. So we feel very familiar with the city area, we also feel familiar with this suburb. And we've looked in other suburbs as well. So we look all over, there's only a couple places we won't look, we don't look close to the water, and you're like Galveston or Freeport, just because it's too far from where we live. We're up in The Woodlands. So it'd be like a two hour drive. And for us, we like being very hands on with our rehabs and going out and visiting them. So we don't stray too far. We don't stray more than like an hour and a half from where we are. Gotcha. We'll look in.

Joseph Williams: 26:55

You don't wanna get on the Galveston. Gotta make sure the work is actually being done. Right. So, yeah, I think work tense seems to move slower, where the water is, too, you gotta be careful with people get into a relaxed mode. Well, cool. Now, for anyone looking to kind of follow up with you guys. What, uh, you know, what social media is that you're active on the most? And how can how can they reach out to you?

Sarah Gair: 27:23

We use Instagram like solely use Instagram, we try doing tick tock and other things. It's just too much. I have a full time job. And we're trying to do real estate. So we like to share our journey and we like to kind of like network with other investors. But I can only be one social media platform. So Instagram, and it's guerre G AI AR dot real estate. And we're very active on there. We haven't been as active recently. They've been everything but love talking to people on there. We've got like a couple of really good friends that we've never met that live in different cities that are doing their own thing. And we love we love seeing what they're doing as well.

Joseph Williams: 28:00

Yeah, well, perfect. Yeah, it's a habit, a full time job being a full time real estate investor and a mom to be doesn't lend much time to learn in the new dance of the popular, for sure. Well, I'm sure people will be reaching out to you. Anyone in the Houston area, I'm sure they'd be more than open to talk about their experiences and partner with them. If you have any deals, bring it their way away, for sure. Thank you for taking the time today to kind of talk about working full time and jumping in with both feet. That's how I started and I think it is one of the most lucrative side hustles you can teach yourself with a full time job that will allow you to slowly exit your W two job over the year. So good luck to you. And thanks again for your time,

Anthony Gair: 28:52

sir. Thank you so much. We greatly appreciate it.

Joseph Williams: 28:56

Thank you for listening to another amazing episode of your biggest deal. Please like, subscribe and share with friends. And don't forget to tag your biggest deal on Facebook and Instagram to connect with Joseph Williams or for questions and feedback visit your biggest deal.com Thank you for listening and learning now it's time to take action