On last weeks episode of the InvestFourMore Real Estate Podcast I spoke with Jason Luchessi, who was a professional body builder. We discussed how many successful people were athletes or in the military. Today’s guest David Corbaley, was not just in the military, he was a green beret. David talks about his journey into an elite military unit (at least the things he can talk about), and how he eventually became a real estate investor. David built his real estate investing business very quickly, and realized he was a master marketer. He starting helping other businesses market online and built a huge business aside from real estate.
How did David become a green beret?
David entered the military at a young age. While in the military he happened to see an advertisement for elite forces. He called the recruiter who was very secretive about the program and decided to give it a shot. David went through intense training programs that were meant to weed out the week recruits. He talks about how recruits not only quit because they were not tough enough mentally, but they broke bones and suffered other injuries that forced them to quit as well. In the end 7 out of 79 people made it through the programs and David became a green beret.
David talks about how incredible it was to be in the elite forces. He was one of the most highly trained military personal in the world. When he had been in the military about ten years, he knew had to make a choice. Continue in the military for another 10 years, or try something else.
How did David get into real estate after leaving the military?
Although green beret’s are highly trained, they are not trained for civilian careers. David struggled finding work that suited him. He was a mechanic, worked in retail, installed cable and eventually became a fire fighter. Fire fighting worked well for a while, but he knew he wanted to work for himself and start a business. He figured real estate was the best way to start a business, without much capital.
David bought many real estate courses and studied them in his down time at the fire station. He learned about lease options first, and 6 months after buying a course, he did his first deal! David made $4,000 without spending any of his own money, but realized he was a one trick pony. He knew how to do lease options, but that was it. He wasn’t sure how well lease options worked for the seller, so he expanded his knowledge.
What real estate investing techniques did David learn?
David bought more courses and learned many more techniques. He learned how to use subject too’s, how to wholesale, and how to market. He warns that course can be a great way to learn, but too many people get caught up in constantly learning, without taking action.
David built a very successful real estate investing business using marketing. He marketed to sellers using bandit signs, post cards, and letters. He was doing well, but realized he was constantly chasing sellers. He had to market non-stop to bring in seller leads. If he stopped marketing, his business dried up. He knew he had to change things to build a business.
How did David build a marketing company?
David decided to build an online marketing system to get seller leads for his real estate investing. He built a website, started advertising and the leads started to come in. He continually improved his online system until he had a 7 figure business. David had something interesting happen while using his website to get real estate leads. He had other businesses start to ask him for help.
Local businesses wanted David to use his marketing techniques for their business. These were not real estate investors, but computer shop owners and other small businesses. He built his business even bigger and found even more success. David was able to build his business so that he was not doing all the day-to-day work and he was free to pursue other activities. Right now David is moving to Arizona to start renovating million dollar homes.
[00:00:58.9] MF: Hey everyone, it’s Mark Ferguson with InvestFourMore. Welcome to another podcast on the InvestFourMore Real Estate Podcast. I have a really interesting guest on today. I want to hear his story a lot, I haven’t heard the full thing yet so I’m excited to have him. David Corbaley, who has been a Green Beret, a firefighter, transitioned into real estate investing, created a seven-figure marketing company is on with us today. So David, how are you doing? And thank you for being on the show.
[00:01:26.4] DC: Hey Mark, I’m fantastic. Thanks a lot for having me.
[00:01:28.5] MF: Yeah, I am excited to talk to you and learn how you got into real estate, how your whole career transitioned. I always start with my guest how they first got started in real estate but I am actually interested about your Green Beret career a little bit too. How much can you tell us about that? Is it all classified or can you tell us how that happened?
[00:01:46.8] DC: No, no. Let me tell you, I can definitely tell you some stuff. Right out of high school, I joined the military. Actually, I left high school early because I was — let me back up and just say that when I start the story, I always like to preface it with something that people can relate with and I think a lot of us, all of the listeners and stuff, we’re probably pretty much in the same boat. That is that since we’re trying to be in business for ourselves, we’re a little different, right? We just wanted to do things a little bit differently. We might have a job or punch the clock or even our own business, a contractor business or whatever, but we’re looking for that freedom and we don’t know it.
So when I was younger, when I was in school I was that way. I had no idea. I thought I was just a problem child so I couldn’t stay in school. It bored the heck out of me and I actually left school early to join the military because I just couldn’t stand it anymore and I didn’t realized then but I realized it now that it’s just because I am different like most of us and most entrepreneurs are. We just don’t understand that it’s not a problem but you know what’s wrong with this. And that is actually a good thing.
I joined the military and spent a couple of years in and then that’s when things really started, that pull began for me was, I was in my early 20’s. I’ve been in the military for a couple of years in Ghana and Germany and I was in the infantry and I would see these helicopters flying overhead and it was just amazing to me. I decided that, “You know what? I want to fly. I want to be a pilot.” So I applied and went through the different testing and things like that. When I got to my class one flight physical, well I found out that my eyes weren’t quite good enough to be a military pilot. So I put the kibosh on that and said, “Dang it!”
So I came back to the States and one day, I was in the gym and I saw this poster on the wall and it was these guys in these Zodiac which is like the black inflatable boat and they were all camoed up and they had these cool weapons and I saw this picture and I’m like, “Man, that is just really, really cool,” and I realized that it was actually Special Ops and it was a recruitment poster. So I called the number on this poster and said, “You know what? I’m just going to do this.” I took the number down and we didn’t have cellphones back then so I called the number.
I think I probably called it from my unit and the guy was just really not aloof but mysterious and I’m trying to like, “Well what’s this about?” And he said, “Well, if you want to do this, we need to meet up and have a conversation.” I’m like, “Well this is just kind of weird.” So I did and I ended up finding out more about Special Ops and it was a secret society back then. I applied, I went through all of these testing and training just to go to the selection process. I went through the selection process in Fort Bragg, North Carolina and that was three weeks of dirty word.
It’s just a really, really nasty three weeks where they pretty much try to kill you and get you to quit and most everybody did and over half of the people, I think we had 300 or some people there and over half of the people didn’t make it. Either you quit or you don’t see much of things like that on TV like the SEAL movie stuff like that where they ring the bell, think of it like that. So either people quit or they break because people would break bones in their feet and things like that just from carrying such heavy loads for such long periods of time and it was brutal.
So I finished that, I went back to my unit and then you actually go through the Special Forces Training, which is anywhere from a year and a half to two years and from that, I think there was 79 people that started my class and I was one of seven to finish. So it was, needless to say, extremely intense. Some of the most difficult, actually the most difficult things I’ve ever done in my life but the most rewarding things as well because then, I popped out the other side as a Green Beret and then went to my unit. This is where we get to the point where we can’t talk a whole lot about different things but we did so many things, travelled all over the country.
I was on a team, a couple different teams but an A Team is just a group of guys, it’s 12 guys that are the most highly trained efficient people in the world and you are a part of this and you know without a doubt that there is nothing you can’t do collectively as a team. Also, there is nothing you have to worry about because these guys have your back no matter what. So it’s an incredible feeling. We went all over the world doing all kinds of really cool stuff we did State side stuff as well, we did counter drug interdictions on the southern border, pretty amazing things. Really amazing things got to play with the coolest newest toys and equipment.
Anyway, some of the best times I’ve ever had in my life and most rewarding and challenging but kind of a long story but what that did was it gave me an edge and it taught me a specific way to deal with any situation, any problem or anything like that. So that’s the biggest thing that I took away from that career was learning how to do things unconventionally because as a Green Beret, you become an expert in unconventional warfare and also an unconventional life. You learn how to do things that other people just don’t think about doing. You look at things at a different manner, a different perspective so you can come up with solutions to problems and find ways around things and we’ll get to that but that really helped me in the real estate and the marketing space that I’m now.
So I get out of service, you get to the 10 year mark and it’s either you’re staying in for 20 or you’re getting out. That’s pretty much what it’s like because I know, if I keep going, you’re usually enlist for four to six years at a time and it’s like, “Well, if I re-enlist, I know I’m going to be in for 20 plus,” and I saw buddies of mine. It was a great career, we love what we did but I saw buddies of mine getting out at 38 or 40 years old and there isn’t a whole lot you can put on a resume for what we used to do that is attractive to employer’s on the outside, back then.
Now there is contractor opposite of stuff like that but back then, really wasn’t much and I saw guys getting out and just having to take crappy jobs after all the things that we did. I’m like, “You know what? I’m not going to put in 10 more years to have to start over in a job like I’m seeing some of my friends have to get. I’m just not going to do that.” At the same time, I started having interest in doing something else. I started getting this feeling if I wanted to work for myself and I didn’t really understand what that was and I’ll get to that in a minute but so I got out and I was a jack of trades for a while. I was actually again like I said, you can’t really make much of a resume with what we used to do.
So I worked in retail, which was horrible. I was a cable installer, I actually ran lines from telephone poles to houses. I was a mechanic whatever I can do, I did that stuff for two years. So kind of a jack of trades and then I got hired on at the fire department which was a blessing. That was another fantastic job because it took me back to a para-military operation where I felt at home. While I was in the department, I was there for about two years and most guys have a side job, guys and girls in the department have a side job. Usually, it’s like contracting your construction or something like that. Guys do brick work and cement work and so because you have so much time off because you work 24 hour shifts and I thought, “You know I wanted to do something too,” and here comes this pull again.
So, this is where things took a turn for me because for whatever reason, I think I was at somebody’s wedding party or something and we stayed at a hotel and we got done with all the festivities and I was up in my room late one night and this infomercial came on and it was Robert Kiyosaki and I’m sitting here looking at this and gosh, it is interesting. So I sat there at 1 o’clock in the morning and watched enough of this infomercial trying to get interested in it and it was about the four quadrants and it was actually this course you could buy. It was $200 and that was a lot of money for me at the time but I thought, “You know I’m going to do this. This looks really interesting,” it’s all about timing right?
I went ahead and bought this thing, it showed up in the mail, I took it to the fire station and after we were done with our work one day, I just went in the backroom and just devoured this thing and I realized that, “Wow, this is what I’ve been waiting for, this is me. I need to be in business,” and because I’ve done different things, we created this wholesaling business where we get items from manufacturer from wholesalers and go to a flea market and sell them. I didn’t know what I was doing but I just knew that I wanted to do something different and when I went through this course, I realized that, “Wow this is it. I need my own business,” and I realized that real estate was pretty much it, I didn’t have enough capital, so real estate was pretty much my only option and I also realized that creative real estate was definitely my only option because of not having the money to do real estate.
So then, I think I ended up with a Carlton Sheets course and a few different things and I went into study mode and this was 2001. I went to study mode and just started learning different ways and this is a lesson right here for everybody listening. I started learning the different ways to invest in real estate. I started learning about lease options and creative financing where you can get owners to hold and carry the note and things like that and I got into learning mode and I stayed in learning mode for probably six to eight months. And I probably should have been in learning mode for three to four weeks before I started looking for properties. But you’re scared because you have never done this before and you’re thinking, “I’m talking about buying a house here and not only that, I’m talking about buying a house and having to talk to somebody about some creative stuff that they’re going to hate anyway and it just isn’t going to work.”
So I was in my own way and the way that things changed were I found this guy on a forum, I was in one of the real estate forums and I found this guy in a forum and I actually asked him if he would help me and he told me he would help me in exchange for a piece of deals that I did, which I agreed to and he told me what to do. So I actually put an ad in the newspaper talking about, I forgot what it was. It was the lease option ad or maybe just a regular old “we buy houses” add or whatever but I put it in The Thrifty Nickel and I actually got a few calls and I ended up going and talking to this home owner, Wally and Wally was an old contractor guy who had a second house and he couldn’t sell this house that he had that he used to live in.
So we chatted and finally Wally said, “You know what? I like you. I trust you and I’m going to do this deal with you,” and that’s what he called and it was a deal because it was my lease option deal and that’s all I knew is how to do this lease option thing. I think that’s what he called it, “I’ll do these lease option thing with you.” So I used my paperwork that this guy had given me and we signed up a lease option with Wally and I put a sign in the front yard just like I was told to do. Literally, I went home and I set up a voicemail system and all of that, it’s so easy now. It was so much more complicated back then to figure out all these stuff and the technology and stuff but now, things are just so easy.
But I set up a voicemail, put a sign in the yard and by the time I got home, I had six voicemails from that house and I literally put somebody in that thing within a couple of days and got a $4,000 option payment and that was the turning point right there. When I walked away from that after just a few days with $4,000, that’s what I would make in an entire month at the fire department minus taxes and all that other stuff. So I was like, “Holy cow, this is really cool.” Anyway, long windy story but that was pretty much my beginning.
[00:13:59.1] MF: Wow no, that’s some good stuff. I’m curious, I talked to Jason Lucchesi last week, I’m not sure if you know him.
[00:14:05.5] DC: Yeah, I know Jason.
[00:14:06.5] MF: Yep but he’s a professional body builder before he got into real estate and we talked about how it seems like so many athletes are very successful in life because they’ve got the motivation, the work ethic built into him and he mentioned military too. I am just curious that if you feel having that structure and you can’t give up. You can’t quit in the military or else you’re done, if that helped you succeed as well?
[00:14:30.0] DC: Absolutely, there is no doubt about it. I believe I am more driven today probably than anyone I know and I think that is a big part of the reason and anything that you do whether it’s the military or sports or whatever it is, when you have a regimen, it teaches you to have that regimen and keep it. So those days, if you’re an athlete or a school athlete or whatever, a swimmer, you might not feel like it on Wednesday but guess what? You’ve got to be there. Your team is there and you’ve got to go there and practice or it might be cold and you have an outdoor pool, whatever it is.
If people have something like that and there’s so many various things you can do but if you have something like that where you get in the habit of having to do it, then I think that carries with you through your life but it also creates something inside of you. It’s not just a habit that’s formed, that habit that I got to do this, I’m just going to do it but it creates something deep inside of you that gives you the ability to turn on that drive and it’s nothing more than self-discipline right? It allows you to flip that self-discipline switch no matter how miserable you are, no matter how much you hate it, you can flip that switch at any time because you’ve learned how to do that so it’s a huge asset, right?
[00:15:49.0] MF: Now I imagine nothing you do now is even close to what the things you went through in the military are.
[00:15:53.9] DC: No, no.
[00:15:54.5] MF: So that was your first deal in real estate, how soon did you get to the next one? How did you progress getting into the business?
[00:16:02.2] DC: So what happened was, I did that first lease option and then needed a little bit of money so you figure okay, well obviously you’re going to spend some of that money because you’ll never had it before. So, “Oh this is cool,” but then okay, what do I need to do next? I needed to find more deals. So you still have your ad in the paper or, back then, however you started. “Okay, this worked let me keep doing it and let me get some signs too, let me get some banner signs and put those out,” and so I just started doing more types of marketing, getting calls and what I found was, I didn’t know a whole lot of ways to do real estate ad. I basically had learned this lease option thing and I’d studied the Carleton Sheets and things like that in the very beginning.
Which I don’t think I ever did a deal that way but it was a hold off because I actually think that was a very complicated way to do a deal. There’s so many easy ways now to get a deal under your belt with minimal risk to you and benefit to the seller and everything else. So the lease option thing wasn’t that attractive to the people I was talking to, to the sellers I was talking to. So I tried to figure out a different method and the next thing that I came across was subject to the existing financing. I actually came across a course on that so I learned how to do these others, to the existing financing and I actually was fairly successful with that.
I got a few different deals that way and I wanted to expand my business but for whatever reason, I was on this rollercoaster. So I will get a deal here and a deal there and I probably wasn’t, some deals were good, others were not so good. They were marginal so I would be on a rollercoaster where get a good deal and then keep going, get a mediocre deal maybe not so good of a deal. So my revenue would be, I will get a little spike, it would be exciting and then my revenue would dip. I was like, “Oh this sucks.” So I was on this rollercoaster doing this over and over and I think what happened was my marketing, I wasn’t focusing enough on my marketing because I would get a deal, get excited about the deal, focus on the deal and my marketing would drop off.
Well looking back, that’s a huge deal because if you’re a sandwich shop and you own a sandwich shop and you don’t consistently market your business with your different mediums, you’re not going to get new customers. You’re going to always have your existing customer base but it doesn’t work that way in creative real estate. I’m going to have a motivated seller come back to you over and over and over and most of the time, the motivated seller doesn’t know other motivated sellers. So he can’t go say, “Oh, you’ve got to sell your house too because you’ll get in divorce so go see this guy.” It doesn’t work that way in our business so we have to create new business with our marketing and that’s why our marketing is so much more important than even a traditional business like a sandwich shop or whatever.
And I didn’t realize this back then. I thought I was doing a decent job marketing but I wasn’t so it was a feast or famine thing. What happened was, when I realized this, that’s when I took a step back. I was so ensconced in diving in this real estate business, I was in the fire department at the same time too but I was into learning about this business and driving this business forward that I wasn’t looking at it from the outside and when I finally realized there was a problem, I decided to take a step back and fall back on that training and look at it from a different perspective. “All right, let’s look at this from an unconventional manner. What is everybody else doing? What am I being told to do by everybody else? You know, all these other people training and teaching on how to do real estate.”
Well, they’re all teaching the same thing. They’re all teaching me how to do direct mail and bandit signs and put ads in the Thrift Nickels and there’s nothing wrong with any of that stuff and it was working but it wasn’t working to the level that I wanted it to. So back then, I started thinking about the Internet, this was 2004-2005. I started thinking well, the internet, people are looking for stuff in the internet. I even did an ad on the phonebook, it was very expensive. I think I got one lead off that thing in an entire year but I’m thinking, “Okay, the phonebook is going away, More and more people are going to the Internet, how can I make that work for me?” So I started learning more about the internet and how it worked and how people do search and Google is really coming up then.
So I started learning about marketing online and how I’m chasing people with my letters and my bandit signs and I’m trying to chase sellers around hoping to find them. Where the ones who are really interested, they’re actually looking. They’re online looking for solution so I started doing research on this and found that people actually were typing in stuff like, “How to sell my house fast?” And, “Investors who buy houses,” and if I could show up when those people searched, I could be the answer and I didn’t even have to send direct mail and all these other stuff. So I started learning about this and it took me about a year and a half to two years to figure it out.
And when I did, that was about 2006 that is when we hit the gold rush because nobody else was really doing this back then. There was a few sites out there but we created this junkie ugly site and got traffic to it when people search and they would find us and we would get phone calls. Pretty soon, the phone just started ringing like every day with motivated sellers. We were doing a lot of short sales then so we knew exactly how to target them and that’s when our business blew up and in 2006 became the first seven figure year and it was amazing to learn what happens when you plug the right components into your business.
So going from struggling, getting a deal, getting a junkie deal, spending money, having to replace the furnace, feast, famine, feast, famine, basically being a contractor in my own business to hitting it big and being able to build a team where now I had agents that are working for me, I had a team in the office doing marketing, that all happened in one year because we started doing the right thing which was marketing the right way. So my point to that is, for me, any business that you’re in, any business, real estate, the sandwich shop, insurance, whatever it is you’re not in any business other than the marketing business. Now you sure have to know how to do your craft but if you focus on being in the marketing business, you’re going to win over everybody else and that was the biggest lesson from this entire career.
[00:23:04.9] MF: That’s awesome and what you said, I am a real estate agent, I have been for 15 years and I talk to a lot of agents, I am also an investor of course but it’s really similar with the feast and famine with agents too where they go really hard for a couple of months getting clients, finding buyers and seller and they get a few deals and then all of a sudden, they concentrate on those deals and they stop going after the buyer and sellers. They have two months of not selling any houses, it’s up and down, up and down, the same thing.
One other thing, it sounds like you were in the education phase but you bought a lot of courses and learned from a lot of people when you first started. I know there’s a lot of people out there in the real estate industry, they call them gurus with a bad name for charging too much and taking people’s money but I would say 90% of the successful investors I talked to took some kind of course. They got started with it even if they said it was a horrible course, it still got them started in real estate. I’m curious how valuable did you find those courses and getting that material?
[00:24:00.7] DC: I would say the majority of them had great value and the problem is and I would admit to this too, I bought a lot of courses. I bought $79 courses, I bought $997 courses, I went to boot camps, I did all of that stuff just wanting to have success. So I probably spent, I don’t know, 30, $40,000 on real estate courses and boot camps and stuff like that. A lot of money and that’s not including any coaching programs that I was in as well later on. So I spent a lot of money on that but the bottom line is, number one, I didn’t have to spend that much money. I did it because it was my fault but the reason is and this is for everyone including myself is stop learning, right?
Stop learning because we think we have to keep learning and there’s a better way and there’s a newer way when in reality, we’re just afraid. We’re just afraid to pull the trigger because most of the stuff out there, I’m sure there’s courses that aren’t that good but if somebody is going to take the time to make you a course, it’s probably got the information in it to get you what you need but if you go and get a course or two, I know people that have bought four different courses on wholesaling. How hard is it to wholesale? How many courses do you need on wholesaling?
Now, if you want to do wholesaling and then you want to do rehabs and then you want to learn about private money, sure, learn about that stuff but the main thing here is apply. So learn what you’re going to learn but begin applying it immediately and that’s what I did. I would learn, my big thing is buying marketing courses because I realize that was the deal but I definitely bought a few different how to courses in the beginning but then I started getting into marketing courses because that’s what I needed. I would buy a marketing course, “Oh this is cool,” I’d take it to the fire station and just plow through it in the day.
I would be really excited and then not really apply. My fault. My fault. And then what would I do? I would find a deal and then I would have some money and then I’d buy another marketing course. It’s just dumb right? But that’s what we do so my point there and my whole big tip and when I say stop learning I don’t mean that in a bad way. I mean stop learning the same stuff. Get what you need, buy what you need, invest in your education and career for sure but take action on it. If you don’t take action on it and you just look for the next shinny object, you’re going to keep chasing shiny objects. I’ve chased a lot of shinny objects and you know what? You find them and they just rust really quick. They’re not that shinny after all.
[00:26:44.8] MF: Yeah, I know.
[00:26:45.7] DC: You’ve got to polish them. When you get it, you’ve got to polish it and keep polishing it and then you’ll have success.
[00:26:50.6] MF: Yeah, that’s great and I think one of the best ways to learn is to do it. You can learn all you want in theory but you’ll never going to know exactly how to apply it exactly what it takes until you actually do it and get out there and buy a house or talk to people. You can’t just sit on your computer and read all day.
[00:27:08.3] DC: Absolutely and it’s scary. It’s scary to, “Well if I do this marketing — I am excited about this, yeah I am excited about motivated sellers but in the back of your mind, you’re not. You’re scared. What am I going to say when the phone rings? I remember sitting there and going to the scripts in this dang courses and studying them and practicing.
When the phone would actually ring and I knew it was forwarded from my tracking number or whatever, it probably sounded like this: “He-he-hello? Hello?” I am digging through my script right? Trying to get it on the table so I can know what to say. Dumb. Just have a conversation. It isn’t scary, you just think it is. You’re just talking with somebody that’s looking for a solution and have a conversation with them.
See if it’s a fit, person to person and be straight up about what you do. If it’s creative, it’s creative. If you think it’s wonky, you know what? If it makes sense for the seller, then it makes sense for the seller. I’ve gotten some crazy deals where I’d walked away with the seller giving me money, right? It’s all about finding motivated people to talk to.
[00:28:19.0] MF: Right and at least you have answered your phone. A lot of people go through all that work to get someone to call and then they’re afraid to answer the phone or even talk to them. So that’s the first step.
[00:28:27.2] DC: Yeah, absolutely and the thing is, once you start and once you do it a few times, “Oh I got an appointment, what am I going to do now?” It’s just a step by step process. You talk to a few people, you finally get an appointment, you go to the house, you’re just on the drive there, you just know that they’re going to call you stupid and “get out of my house” and “I can’t believe you offered me that” but they’re not.
Then you do that a few times and then the next thing you know, the homeowners are shaking their head and they’re like, “Yeah that sounds good. Let’s do this” and you’re like, “Uh” you know? It’s just a step by step process. One day, you will have an agreement in your hands and before you know it, you’ll have a check. Wow, this does work and it does.
[00:29:05.4] MF: Nice, now when you’re doing a seven figure business, were you wholesaling most of those deals or were you flipping some of them? What was your end goal with those properties?
[00:29:15.8] DC: Those were primarily retail on the back end. So we were doing a combination of short sales and renovations. We had a crew going. I actually had a buddy, we partnered on quite a few deals, the ones that we would retail and he ran the construction people and then we ran the acquisition side of the business. So we were doing a ton of marketing, we actually had a machine set up, where we had our marketing so dialed in that people would call or fill out web forms on our website. A team member would call them back, send them the information that they needed so that they could print it out, have them bring in what they needed. They would come to our office without us even seeing the house.
They would come to our office, sign all the paperwork. We do the deal and then within a couple of days, one of our people would go out to the house and get repaired and stuff like that and then we would begin our thing but we just had a machine. That was when we were doing a lot of short sales. We don’t really do that anymore but when we were doing a lot of short sales, we had a machine for that process and it was just amazing. So that was our primary push is the short sales creating the spread on the short sale and also doing rehabs and getting the max spread, the max value for the rehabs and yeah, it worked really well.
[00:30:35.4] MF: Cool and yeah, short sales have dried up and they have also added a lot of regulations and different things regarding short sales which made it tougher, that’s for sure. How did your business progressed because that’s right before the housing crisis? Did that hurt you? Did you have to change things completely?
[00:30:49.6] DC: We definitely changed things and you’re right. To step back on in the foreclosure thing, that was huge for a few years. We got in early and we rode until 2008. We knew the market was started to go south, we steered out of that business, we started off loading all of our inventory and we basically ended up sitting on three or four houses for a couple of months and making some payments but we got out of everything which was great.
Then, the focus switched to actually doing more retail stuff. So finding stuff, buy it, renovate it and then keep targeting higher value properties. So we moved into the higher value properties because there was more of a spread and we got better and better at doing the rehabs and it’s fun to take something and renovate it and take it from old and dilapidated to pretty and put a family in it.
That’s just as fun and its rewarding and you make a lot of money when you do it but you’ve got to start somewhere even if it’s wholesaling for $3,000 but you work your way into what works for you there. So we transitioned into that. We’re getting ready to move to Scottsdale and I’m going to spin up a brand new business from there.
We’re going to start a wholesaling there and then we’re going to get into high end when we were there looking for properties. The midrange stuff goes really quick, the bread and butter stuff, two, 300,000, $400,000 goes really quick but the high level stuff, a million, a million and five, it sits four, five, six, eight months and the reason it sits is because most of it is old.
It’s 20 years, 30 years and it needs a renovation and there’s a lot of motivated sellers there. So we’re going to start wholesaling and then we’re going to move into that high level stuff and start doing high level in the million dollar houses to rehab. So we’re really excited about that.
[00:32:45.3] MF: Nice and are you in Seattle still? I know you started out in Seattle, is that where you’re at now or have you moved around a few times?
[00:32:51.0] DC: No. Well this is one of the joys of being your own boss. I left Seattle, I went to Southern California and tried that out for a bit and then I went to the Southeastern side of Florida so the other side of the world. I was there for about six months and then I went to Boulder. I was in Boulder for about three months and now I’ve been in Denver for about four months and now, I’m headed to Scottsdale.
So for the last year and a half, I’ve been looking for home and my businesses have been running because of the team that I’ve built, that is the beauty of being your own boss and having your own business when you structure it right because I have a fantastic team and they have my back. If there is a time when I’m going to be coming up. I’m in semi work mode now.
I work half the day and then I’ll work on the move half the day and our moves are going to be so smooth because everything is gone. Everything is boxed. We’re ready to go, we have our packing crates coming Monday and we’re going to pack them all up and go but my team has my back because I know that I can do this half days for a week and then next week, I cannot work at all for four or five days.
I will come back and everything will be running smoothly just like it always is. I’ve been on my own for 10 years now and the team that I’ve built is phenomenal and there’s no greater joy than being free and doing what you want when you want to and not having to punch a clock or be somewhere. It’s just phenomenal and anybody can do that. You really can.
[00:34:23.5] MF: Yeah. I completely agree. I’ve got a team of 10 now with agents and assistants and they help me run the website, my real estate team, the flips so I know exactly what you mean. It’s nice to be able to go on vacation without having to work the entire vacation like I used to. If you can find the right people, it makes your life so much easier.
[00:34:43.0] DC: Absolutely.
[00:34:44.3] MF: So you’re going to Scottsdale, you’re going to work on some high end stuff there, have you done a lot of high end stuff before? I know you said you did some previously. Do you see more risk or if you know what you’re doing, is it not as risky to do the high end stuff as the low end stuff?
[00:34:59.1] DC: There’s always risk involved obviously when you’re retailing because now, I’ve never been a proponent of “let me go ahead and do a subject two on this house” or do an owner finance and put $30,000 into a rehab. I’ve never been a person that suggest that because you don’t have full control of the property so it comes out of actually owning the property when you do rehabs.
So that’s when you incur the risk is you’re getting financing on it or you’re using private money on it where if you mess it up, you’re going to ruin that private money partnership. So there is definitely risk involved but the flip side is, you look at the numbers and the market and you take a calculated risk so you know or if I get in at this price, even if things go south and I have to take a hit on this house after my rehab cost and selling it even at a hit, I’ll be fine.
I can sell it even if I have to dump it because I can’t sell it for X months, I’ll be okay. So as long as you take the calculated risk, I think you’re pretty safe and as far as high end stuff, we haven’t done it for a while but my previous partner who we used to do deals with in Seattle, he continued just climbing up the ladder and they’re doing beautiful million, two million dollar homes now and they do full remodels and they’re just fantastic so I always have him to fall back on for guidance as well.
[00:36:27.5] MF: Nice, that’s great to have. I was asking about Seattle because I know a few people there who talk about how crazy the market is in Seattle and then being in Denver, it’s absolutely nuts in Denver too. You’ve been a part of a few absolutely crazy markets for appreciation right now.
[00:36:44.4] DC: Yep, absolutely and what does it come down to right? No matter what the market is, if the market is extremely hot or the market isn’t that good, well if the market isn’t that good, you can still sell the house if it’s priced right because if you can make it more attractive than the other houses on the market, people are still buying houses. Maybe not as many if you have a soft market but they’re still buying. So if you’re house is the most attractive one, guess what? You win. What do you have to do to get that? Well you have to price it better than everybody else’s unless you are selling a fixture to an investor or something but still, it’s all about the price.
And if you’re in a hot market, same thing. You’re just going to sell it quick no matter what, it all comes down to what though? Marketing. If you can get in the back door, everybody who’s marketing are motivated sellers. Everybody is, right? Using mail and everything else that they have always done but if you can get in the backdoor and get in touch with these motivated seller and be the solution and get the deal at the right price, you can win on a soft market and you’d definitely win on a hot market.
Because I’ve heard so many times, “Oh that’s such a hot market, how can you real estate in a hot market like that? There aren’t any motivated sellers.” Yes, there are. There’s always motivated sellers. I don’t care how hard the market is, you just need to find them and when you do, you have a smoking deal because now you have a deal in your pocket and an ultra-hot market so you can sell it super-fast. Actually, I love hot markets.
[00:38:17.8] MF: Right, I agree. I didn’t know if you knew this but I am actually in Greeley, which is an hour north of Denver.
[00:38:23.3] DC: I did not know that.
[00:38:24.8] MF: Yeah and I went to Boulder. I went to CU, but we have 12 flips going on right now in a hot market so it’s definitely possible. It can be tougher or it can be easier like you said depending on what’s going on. I’m not holding rentals as much here because prices are so high but flipping is definitely possible. One more thing I wanted to talk about, there are some other things I wanted to talk about but as far as you’re investing, do you use mostly private financing or have you used banks at all? How do you normally finance your properties?
[00:38:51.7] DC: I’ve done both. There’s three primary ways that we’ll finance and one is with owner financing. I love that unless we’re going to put a significant amount of money in the deal, then it’s a scary thing and if you do it that way, then definitely protect yourself. Get title no matter what whether you do it in a trust or whatever it is but if you’re going to have the owner carry and you’re going to put the money at all in the property, then get control of the title somehow.
Then the other way is financing. We’ll go out and actually finance a property. If you can get the numbers right, we can finance the property. A lot of times with nothing out of pocket and if you do have to come out of pocket, then you can use private money for that sometimes or money from a deal or whatever but if the numbers are right, it isn’t hard to finance a property if you have even decent credit. I mean it was hard there for a while but when everything crashed in 2008, probably for a couple three or four years, it was difficult especially for investor financing but things really changed and it gotten better and I have the numbers on the house work then you’re good.
And then the third way is private money and private money is probably the favorite. Especially when you’re looking at any renovations because once you build the private money partnerships, people know that you’re good and you’re going to get the deal done and they’re going to get paid. So you can get private money at 6% or 8% or whatever you do and then the cool thing is, when you get the numbers right, a lot of times you can actually get money at closing to fund your rehabs as well.
So literally with nothing out of your pocket, you can acquire the deal, take ownership of the deal, pay for the renovation, sell the deal and that is true creative real estate. It’s fantastic because you’re not coming out of your pocket a dime and you literary have no risk. It gets everybody else that has the risk, obviously you have to take care of them and play a smart game but yeah, those are the three ways that we finance deals like that.
[00:40:53.4] MF: Nice and I do very similar. I mix with private financing, bank financing and I’ve had good luck with banks but supplementing that with private money has worked really well for me. Very cool and now, we have talked a lot about marketing about how you’ve built extremely successful business from finding these marketing techniques. You created a program that goes over that. Can you tell us a little bit about that?
[00:41:18.3] DC: Yeah. We actually, in my different mastermind groups and stuff like that in real estate, I would share what I was doing with my marketing and a lot of it was online based. All of my peers, every time I would show this, they’re like, “Oh my gosh can you do that for me?” We started doing that for our peers and helping that with their online marketing. What happened was a funny story because we transitioned in and out of working with businesses with their marketing and outside of real estate and what happened was in our office one time in Seattle, one of our computers went down and there was a computer repair shop across the street.
So literary at the end of one of the business days, I unplugged the box. The CPU, I just picked up the box and took it across the street and said, “Hey, this things is for business, can you work on it?” And, “Yeah, sure. Come back and get it in a couple of days,” and so when I went back, I started talking with the owner and we started sharing ideas about what we do and things like that and I told him what we do.
He’s like, “Well how do you get your deals?” And I started talking about how we do online marketing and of course he perked up. He’s like, “Oh man, I’ve been trying to nail that. We just can’t get it right. I’ve hired consultants and we can’t get this internet thing right and I know there’s business to be had off the internet” so the next thing you know, this guy was our client.
We built the website for him and he went from two computer stores in the Seattle area to seven and it was all because of his online marketing. Well, who does he know? Everybody right? Because he works on everybody’s computers, so the next thing you know, we were doing online marketing for chiropractors and dentists, you name it.
So we inadvertently we didn’t mean to but we spun up this new business on marketing local businesses online and what it did was it taught me an entirely different way to market because I was marketing a real estate business online but I was using specific methods to do it and when we went down this local business marketing path, it taught us an entirely different way to market online.
In doing that, I realized that you know what? This real estate business is a local business, it’s no different than a chiropractor or a dentist, it’s a local business too and I don’t care if we’re in Seattle doing real estate in Phoenix. It’s a local Phoenix business. So we started looking at how we can market a real estate business as a local business and it blew up even more.
So then, that’s where the need came in. Just like anything, in business if you can fulfill the need of a motivated seller, you can get a deal. “Well if you can fulfill the need of people looking for motivated sellers, you have a business, and so people started hearing about what we were doing, other investors and stuff and they started coming to us.
“How do I do this? Can you help me do this?” so we ended up creating. It started out with just one course on how to market your real estate business online and this was a number of years ago and that course just blew up. We had customers all over the country and that has morphed into a full business of its own where we have an entire series of trainings and courses on how to market your business.
Yeah, it just morphed into that so now we have a publishing business as well where we do an online marketing and things like that and then we’re headed into different fields like the health and wellness space and online marketing. It’s funny where life takes you and that’s really exciting because I love the online marketing component because you can build a tribe.
You can build enormous groups of people that are all interested in the same thing and you can build great communities that way. Thousands of people that are all interested in the same thing so it’s a lot of fun.
[00:45:12.2] MF: Yeah, that’s awesome and I hadn’t realized that you had expanded that marketing to so many other businesses as well.
[00:45:17.9] DC: Oh yeah, it’s great.
[00:45:19.1] MF: That’s awesome. Cool and then I know we’re running short on time here, do you have any tips if someone wants to get started in real estate, maybe they don’t have a lot of money like you when you first got started, what’s one tip for them to get started? Is it should they pick up a course and learn that way? Should they browse online for hours trying to figure stuff out? Should they just go out there? What do you think is the first step someone should do?
[00:45:46.1] DC: Ideally, if somebody doesn’t have money to get started and a lot of times when you don’t have money, that’s the big thing. I have seen people they might have a website and their website says, “We buy houses, cash,” and then the person who has the website says, “You know I only have this site because I can’t buy houses cash” and I tell them, “Why can’t you?”
In their mind, if they don’t have the money to even buy a course, they’re afraid they can’t do real estate because obviously, if they can’t buy a $500 course, they’re not going to buy a $300,000 house and that is absolutely not true because I will answer your question in a second but I just wanted to point that out. Even if you can’t afford a course or something like that to learn, you can do a deal.
The thing is, if you talk to a few people, a few motivated sellers, it’s all about talking to motivated sellers, if you talk to enough of them, you’re going to find somebody that is interested in your solution and your solution might be, “Hey, I can get this house sold for you in a couple of weeks” or “I can get you cash for this house in a couple of weeks.”
How the heck are you going to do that? Well, if you can get this house under contract for a good price, you can go find investors in your neighborhood, in your area. Call the signs, go after their marketing, get online, start calling, “Hey, I specialize in finding deals. Would you be interested in working with me if I can find you deals? I am just looking for an assignment fee and it’s yours”.
You’re going to find people who say, “Yeah. Heck yeah bring me the deals”. You’re going to find people who say, “No, I’m not interested” but you will also find people who say, “Heck yeah, bring me the deals”. Now, you’ve got a place to take the deals, all you need is to get deals under your belt. If you’re short on funds, the biggest thing that I think you can do is you need to know how to tie up a deal. That’s important.
So if you can find a course on how to do that, that’s a big thing. You don’t necessarily need to know all there is to know about real estate but you need to know how to tie up a deal with paperwork and you need to know how to get an assignment fee right? That’s really important so you need to learn that at least.
Could you do it on forms and stuff? Probably. I would try to get a course of some type on wholesaling if you could. Just simple wholesaling, that’s where you need to start because it’s the easiest and you can start making money right away and then branch your business from there but once you do that, start marketing and if you don’t have money to start marketing, there are so many places that you can several leads for free.
You just have to do the work so marketing comes in a couple of different segments. One is where it’s automated and you don’t do the work. You have somebody else do all the work. The mailings or if it’s online marketing or whatever it is, that’s all preferably being done for you and the other is where it’s mechanical right?
You are doing the work because you can’t yet afford to pay somebody else to do all the work. So that means getting on Craig’s List and sifting through those dang ads and reaching out to the owners. Don’t search agents typically because they’re not going to want to go to their home owner that’s listed the house with them and offer you a deal.
So do the by owner stuff, go through Craigslist every day, find them, contact them, don’t be afraid. You can e-mail 50 people and maybe get one response or you can call 50 people and talk to 25. What do you think is going to do better? So reach down deep and do the hard work and it’s going to be uncomfortable at first but literary, so many websites out there where you can find home owners that are ready to sell their house. Just start talking and it’s going to teach you how to talk to them and in the process, you’re going to uncover motivated sellers.
[00:49:34.1] MF: That’s awesome. Great advice. I think that is all I had. I learned a ton of stuff from you. Thank you for the Green Beret stories and all the marketing. If someone wants to contact you, they want to get a hold of you or check out what you’ve got to offer, what’s the best way to find you?
[00:49:49.2] DC: Actually, we have a resource kit that’s really cool and that’s a good place for somebody to start as well but we have a resource kit and there’s not just one but there’s seven different ways to find motivated sellers for free and they can actually get the resource kit. It’s actually at investfourmore.com, it’s on your site, investfourmore.com/commando.
So they can go there and just download that resource kit for free and it will teach them seven different ways to find motivated sellers for free.
[00:50:20.9] MF: Awesome and yes, thank you for offering that. I always like free stuff, I appreciate that. Great, well David I think that’s all I have. A lot of awesome information, I learned a lot. I didn’t really realized you were in Colorado right now either that’s why it’s funny how that works out but yeah, thank you for being on the show and hopefully we can keep in touch.
[00:50:38.5] DC: Yeah, thanks for having me. I had a good time Mark and I appreciate chatting with you.
[00:50:41.9] MF: All right, great. Well you have a great weekend and I’m sure we’ll talk soon.
[00:50:45.0] DC: All right, thank you too. Take care.