Military Service as a Launchpad for Real Estate and Long-Term Wealth

0:00My first investment was my primary, right? And then outside of that primary my first flip was in 2022. Shortly after I would I was doing a lot more retail stuff and I kind of had that analysis paralysis. And then one day out of the blue this lady calls me and said, "Hey, I have a house for sale. Do you know anybody that does cash offers?" And I was like, "yeah, I think I do. Yeah, actually I do.

0:31And, I'll come by your house. And I'll I'll give a look I'll look at it and then I'll I'll get back to you and we can talk about numbers." And so, right after I hung up, I was like, "Oh what do I do now?" And I think this is the reality of people that take action, right? One of the co-hosts on my podcast, he has probably 99 rentals. And I think he's the guy you should probably talk to next. But I ask him all the time. I'm like, "Dude, like like why why do you have 99?" And he's like, "I don't know.

1:04I just like started buying and then I was like, "All right, what's next?" And then he would buy the next one and then he would buy the next one. And I think that's that's the thing that I really want to like stick on is like once once I got off the phone, the action had to happen cuz I just told this lady I was going to do something. Versus if you're just sitting there looking at Zillow or Investor Lift or all these other platforms and you're just looking at deals and trying to comp them and see if they're a deal. You you can you can sit there and analyze, but there's no action real action being done.

1:38— so after I hung up that on that call, I started running numbers. I went over there, scheduled an appointment, went over there and looked at it with a contractor. You know, I'm on Facebook group pages like trying to find any contractor and every contractor because I had none at the time. Again, I'd only been in Maryland for two years at that point. So, I hadn't really built a lot of relationships. I was just kind of selling real estate part-time, still full-time in the military. And I ended up finding a contractor.

2:08They went out to the appointment. They told me, "Hey, it's going to cost like probably 125,000." Now, I'm scared shitless. I'm like 125 and you are you guaranteeing me that this is not going to go up? And they're like, "Yeah, I think 125 covers you." And at that point, I know they're making some money, right? Because like if you're going to guarantee me that it won't go up and you're doing roof, siding, everything, then you're definitely making some money. And looking back at it now, they definitely made a lot of money off me. And that was okay. I was I told them that from the get-go.

2:40I told them, "Hey, listen. I'm willing to pay you more, but I need everything done right. Like to the tea. I need everything done right. Tees crossed, eyes dotted. No cutting corners, no none of that. This is my brand and this is what I wanted to build my brand off of. Is doing things right. So, to make a long story short, everything goes beautifully. I'm using my AMX card. They're they're sending me bills. As you may know and your your audience may know, military members get MX Platinum, the annual fee waved.

3:17So, I had an MX Platinum and I didn't realize that. — Oh, man. This is another this is another military hack that I love telling military members. — it's called the MX hack. And we can kind of dive into this real quick. I don't know if if you want to, but the biggest thing is like you can get the opening bonus 250,000 for a platinum and then you can also get the gold. So you start at the gold, you get the opening bonus, you spend like 3K in 3 months. Just put your bills on there, spend it on ordinary things that you're already going to. You get your points and those points stack. — Then you'll get an email from MX and they'll say, "Hey, you can add an additional user for an extra 10,000 points.

3:53You add your spouse, spend a, you know, do the same thing." Then you can do it with your spouse. Rinse and repeat. Now, between the two of you, you have almost 600 to 700,000 in points. That's like a couple roundtrip flights. — Nice. — So, on top of that, if you're an investor, what I did is I had my contractor send me an invoice and I was, you know, paying with my credit card and then I was using the hard money when the draws came in to pay that off. — So, it was just a a a reoccurring point accumulation.

4:24— Yeah. And with the AMX, you get one and a half points for every dollar you spend. So I put 125,000 on this AMX card and I was getting one and a half times the points. — Wow. — So that's a that's a really big hack that I used to kind of start and everything was going beautiful. The work was so to the tea. I did have one hiccup where the basement flooded during a massive downpour there. The the sump pump broke and there was not a French drain system in the in the basement that was properly suited.

4:58So I spent like 9K just on getting that. That was a big learning lesson. Because we had already finished the basement. So we had to rip everything up, cut the drywalls, do the whole French drain system. — It's always after the basement's finished, you know, it's like listed and it's like the last thing all of a sudden it it floods — every time, man. Every time. So now we always check beforehand if the there's a French drain system in place if the the sump pump is working and everything like that. But you learn and you learn with dollar signs and I tell people that all the time and that was one big learning lesson.

5:33But then we get on market. I had priced it very low compared to what I thought it would sell at and then it it sold even higher. So we priced it at like 405. I think that one ended up selling at 435, no inspections. There was a there was a appraisal contingency. We had like five offers when said and done. Inspection goes through or they did an inspection for informal purposes. Got through everything. Got through the appraisal.

6:04Everything was good. We were two weeks away from closing. And all of a sudden, I come over to the property one day and there's a big pink sticker on the door. Stop work order. — Oh my god. — And I'm like, wait a minute. So, I go back and I pull up my contract with the contractor and I'm looking at it and and I'm I'm just like, right here it says I paid $2,500 for permits. Why don't I have permits? What's going on? — Yeah. — So, at the time, I had just joined a brokerage with a attorney that it was her brokerage and she has she has a law firm.

6:41So, I'm calling her. That was my first call and attorneys are very quick to kind of jump the gun on on things. So she jumped the gun a little bit and actually you had her on Diana Khan. — She's great. — Yeah. So she's amazing. We we used to call her the pitbull. She's our little pitbull. But she gets things done and she jumped, you know, she jumped on it and I thought it was kind of brushed a little bit, but my contractor w was kind of like giving me the runaround like, "Oh, you said that you didn't want to pull permits." And I'm talking to my contractor like, "This is my first flip.

7:16I didn't even know permits were a thing." — Yeah. Yeah. — It's like, how did I tell you not to pull permits when it's in the contract that I paid you $2,500 for permits? — Yeah. — This doesn't this isn't adding up. Is the math is not mathing here. So, to make a long story short, Diana sent in a demand letter and there was some litigation that kind of happened. Excuse me. And, that was that was another learning lesson on my first flip. I ended up doing some, permit.

7:47I had to go through the permits, all the permits. Was very lucky that they didn't make me tear everything out and replace it. Just had to cut some holes in the wall. It cost me about $900. I was I was super thankful that I didn't get, you know, crazy wrecked. So yeah, that that was a big learning lesson for me on my very first deal. — So, did you lose that buyer then or with you? — No, that buyer stuck with me. They were moving from California and it took me an extra like two to three weeks I believe, maybe longer — to close.

8:23— Yeah. After they said so they stayed here for two or three weeks on their own dime. — Wow. And and how did the city catch wind that you did a rehab that late into the process? — So someone this is that's a great question, Kirby. Someone had called the only way in this specific county that you get a stop work order is if somebody reports you. M — there's no county inspectors driving around looking for people doing, you know, unpermanented work.

8:56So, someone reported me and they were calling like four or five times to this permit office to get a stop work order. — Wow. — And I don't know who it was. I know it was a lady, but I still don't know who it was. I kind of think it was the seller. I don't know if they were upset about the price I bought it at versus what I was selling it at and they could see that or kind of what the situation was. But yeah, that's that's kind of how it that that happened. — Yeah. Wow.

9:27— That is wild. Yeah. I have very similar stories to that. Learning some lessons the hard way. I was about to move into a property I'd fully rehabbed and similar got a got a stop work order on the door right before I was going to move into and move into it. And yeah, it's it's a tough lesson, but similar like they made me open up a few walls just to see. But they the work was done correctly, luckily. So, — right. — so they let it go. But, yeah. — That was not a that was not a fun time.

9:59U, I was like, you're just thinking about like, man, they they could really tell you to open everything up and just take everything out and redo everything. Like, it's really at the discretion of the the inspector. So I was kind of at the mercy of the inspector, but luckily I kind of played like dumb first investor, which I was. I was a dumb first investor. It was my first time. I knew nothing about permits. I didn't even know you could not pull permits. So that's kind of what happened. — Yeah.

10:30Going back to to how you got this deal, I'm curious on this. So as a realtor and an investor obviously you are talking to sellers all day long and so is first off do you recommend to people to go that route having you know experienced it now do you think if you want to get into real estate becoming a broker first like that that makes the most sense and then how do you determine when you're talking to sellers which properties you want to keep and and purchase yourself and which ones you you'd rather list? — Yeah, that's a great question.

11:02The first one I would say, cuz I get this a lot, especially investors coming to me and saying, "Hey, like I'm thinking about getting licensed. What would you recommend?" And I tell them, "Don't get licensed." To be fair, there's a lot of compliance. There's a lot of legalities. And it's really not worth it unless you're going to like you you plan on doing some more retail kind of stuff. So, if if your goals are you want to do some retail stuff, but you also want to be an investor, I would say air with some caution because you're licensed.

11:37They're going to hold you to a different level and a different standard. And this is why the hybrid agent isn't talked about as much because it can be very confusing on all right, the seller contacted me. Are they contacting me as an agent or are they contacting me as they're, you know, somebody an investor that wants to buy it cash? And so you have to determine how that seller is going to navigate and then you you kind of take them down whatever road they want to go down, not the road you want to go down.

12:10So, I actually I met my business partner back in 2023, 2024, somewhere around in that area. And we started a wholesale company. And it was majority just to find flips for ourselves. — And so, we started calling, banging phones. We were going direct to seller. We would pull 10,000 you know records a month and then we would have them called overseas and then it would come to our CRM.

12:42I had two agents at the time that were helping me with this and so they would always ask me this question like how do you navigate these waters of all right do we want to buy it like are we trying to buy it cash or are we going to list it and so the first option is hey they already answered the phone to saying yes they want a cash offer so we're calling them as PE home buyers and you know we're trying to buy it cash now if they if their price is too high or they say hey they you know I' I'd probably want listed on the market.

13:12Okay, great. We can also service that with our in-house real estate team and we can help you get those needs. But we were going through a checklist like cash offer, noation. If we can't do a novation, then we're we're going to try to list it. — Yeah. Yeah, that makes sense. That's very similar to how we kind of handled it too when I when I was running my flipping company. We partnered with a young realtor who was just really hungry and he was like, you know, I'll put up bandit signs. I'll send out marketing. I'll handle the lead flow and stuff and and anything that qualifies as a flip, we'll give to you, but it's just a constant lead flow for him for listings as well because the majority of properties don't work as a so it was a great relationship.

13:56I I highly recommend that for people who are who are, you know, doing offmarket marketing. But yeah, that's great that it could be in house, too. So, — yeah, I think I think for newer agents, it's a great lead source and a great prospecting route. And I I do think every new agent should try cold calling. And just and give it a shot. It's not for everybody. It's not for me to be honest. I hate it. But I got good at it. And I think it taught me how to communicate better and taught me how to be a person, right?

14:29Because you're going to get different personalities. You're going to get cussed at and how are you going to respond to that? Right. So, it taught me a lot about myself, but it also taught me a lot about other people. — Yeah, that's a great point. It's a it's a tough tough way to go, but you learn a lot. — You do for sure. — so, so for you then as an investor, what makes a deal a deal for you? I'm always curious like are there certain metrics you're looking for? What's what are you buying today? — Yeah. So, when we first started, I probably like m much of your audience and a lot of investors, we were like, "Hey, we'll buy anywhere in Maryland if the numbers make sense, right?" And so, for for us now, I just we just had this meeting and I was like, "Hey, dude, listen.

15:15We like buying everywhere is too hard. You have to know the neighborhoods. You have to know the markets. And if we just say, "Hey, we want to buy in Anonto. We want to buy in Baltimore. We want to buy in this these four zip codes, these five zip codes, then we can know the market like no one else knows the market. And so like for me, Glen Bernie, that's where I live. That's where I did my first flip. That's where I knew my numbers. Like you could give me bedrooms, bath, and square footage, and I could tell you what it would sell for depending on the condition. So, I think when you dial in your market and your your knowledge base on that, it's a lot easier to come up with your back-end numbers, right?

15:55And so then for me like if anything under 200k in Glen Bernie I'm buying all day. But that's just because I know typically they're you know a thousand they're under 1,000 square foot. It's going to cost me anywhere between 80 to 120 to to rehab and then I'm going to turn around and sell it for anywhere between 360 to 380 — if not more. — Wow. Yeah. Yeah. It totally makes sense. And I've seen the same thing over and over again. The more specific you get actually the higher your deal flow goes in a lot of in most cases because you're not spreading yourself so thin.

16:30So and and how did you how have you funded these these deals? — so sometimes it's other people's money. Like my first flip that was an interesting one because I didn't have money. I was still in the Air Force. Just bought my first house. I didn't have a down payment of 10% or 20% to go put down on a house using hard money and float the interest payments as well. So, excuse me.

17:02What I had to do was I had to take this deal, analyze it, and then show everybody that I knew that had money this deal and say, "Hey, can I borrow, you know, 60 70k for x% of the profit?" it. And so what I ended up landing on is I I found a a realer down in Virginia that also wanted to get into flipping and I said, "Hey, listen, dude. I'm going to handle everything up here. You're down in Virginia. I just need your money and if you if you do this deal, I'll give you 40% of the profits.

17:33We're looking at a 70k profit and I'll give you 40%. Plus your money back." How can you say no to that? — Yeah. — Right. And I look back on that and I'm like, damn, I gave away a lot of profit. For the money, I probably could have found somebody that was willing to do it for like 10 or 12%. But, you know, you live and you learn. And at the time, at the time, you know, 60% of 70K is more than 0% of nothing, — right? Exactly. — So, for me, it's like if you don't have like a lot of people get hung up on the money part and it's like don't worry about the money will come if you find the deal.

18:10If the deal makes sense, the money will come. Oh.