Flipping Success: How 21-Year-Old Donovan Camarotti Built a Real Estate Empire
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Did you find yourself chronically unemployable? Most high-level entrepreneurs are. I think that was really the only job I had. Really? The only job you had? For like a month, you know? And then I was like, I was like starting detailing at the same time. And I was like, man, you know, I just made my whole paycheck in a day.

And now escaping the drift, the show designed to get you from where you are to where you want to be. I'm John Gafford and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along, escape the drift, and it's time to start right now. Back again, back again for another episode.

Episode of the podcast, like I said in the opening, man, that gets you from where you are to where you want to be. And today, here's a funny thing, man. I'm going to tell you, I always tell people when they come on this show and they ask me what it's about, I say this is kind of a love letter to my dipshit drifting along with the current 25-year-old self. So it's always, I don't know if it's bittersweet.

or if it's just unique, or if it's just exceptional, when I can get somebody on here that is doing something at an incredibly high level at an incredibly young age. Because when I was this dude's age, I'm trying to think back what I was even doing when I was 21, and it was not what this dude's doing. So this is a guy that lives from my home state of Florida. God bless for Floridians out there. From my home state of Florida. And this is a dude that at 21 years old is flipping 80 cars

100 houses a year in the Treasure Coast. And that's a lot, folks. I mean, that is a lot of houses to turn and burn. He has just done so much at such a young age. We're excited to get to that. So if you're one of my younger listeners that is listening to this, man, this is one you probably want to pay attention to because this dude's doing it and he didn't wait. So welcome to the program. Ladies and gentlemen, this is Donovan Canamorati. How are you, buddy? Good, man. How are you? Good to have you, man. So good to have you in studio. So

I, you know, this is, I, it's like, normally we start these things out with, tell me the origin story of Donovan. Tell me the backstory of what made you, you could do, you're still, I do. No offense. You're still a kid. Yeah. Right. So, uh, you know, tell me the backstory, man, but where'd you grow? Like, obviously, where'd you grow up? Start with that. So I was, um, born and raised for a little bit in Miami. Okay. Um, so where my parents lived, um, you know, I spent a lot of time with my grandma where my parents were at work. Then my dad retired and we moved up about like two hours North to

My mom continued her career for a few years and then she retired. During that time, I was...

You know, I had gone to like middle school, high school, and even a lot of elementary school up north. And in high school, I was, you know, it was in my senior year. I was like, well, I really should probably figure out something to do with my life. Right. After high school, my parents... Did you get good grades? Were you a good grades kid? Yeah, I was pretty good. I always got mostly A's, you know, one or two B's. So I mean, it was decent. I wasn't like, you know, always straight A's, but, you know, I was decent in school. But, you know, my parents, they...

They encouraged me to try college. Right. And so I did. I did it for a year. And where'd you go? I went to FAU. OK. Yeah, there you go. Yeah. So I tried it for a year and a week of my second year. And then I called it quits. We could get into that. What was the catalyst that caused you to call it quits? What was the thing you were like, this isn't for me? So it was about an hour and 20 minutes from where I lived, you know, back home at the time. And, you know, I would stay on campus.

And I was like really, you know, getting into real estate pretty seriously at that point. And I would have to like go see properties. I drive, you know, an hour and 20 minutes there, hour, 20 minutes back. Like it didn't really make sense. So you are, you essentially were doing what you, what you thought you were going to do, going to school for anyway. And you were like, why am I going to school? Exactly. Like the classes were so slow, you know, and then they weren't teaching you like, you know, real estate investing. They were just like

you know, real estate law or real estate, you know, taxes, whatever it is. I have a similar story. I was in a beverage class because I was going to school for a hospital administration. I opened my first bar at 20 years old. Okay. In Tallahassee. You couldn't even drink and you opened a bar. No. Yeah. I was literally writing checks for like 150 kegs at once. Nice. And I wasn't on enough drink, which is pretty funny. I don't know if Van Heiser Bush could get trouble for that, but that's, that's true story.

And I remember they were talking about liquor tax in Florida and how you pay beverage tax. And they were like, okay, so every quarter barrel is 15.5 gallons. This is how you do the math, blah, blah. And I'm like,

you can write off a gallon of every keg for spill and foam. And they're like, no, you can't. I'm like, I just fucking did it, right? I literally just did this. And that's when I decided the institution just kind of had nothing furthered off from me. Similar story, so I get it. So when did you start in real estate? So I started really trying to learn real estate as much as I could, like my senior year in high school. What was the catalyst for that? Huh.

- You know, my parents had a family friend who he flipped houses and I was like, oh, that's cool. Like he just bought this ugly house, you know, fixed it up and then sold it. He made like 60 grand. I was like, well, you know, kids out of college make 60 grand. I gotta do this a lot sooner. And I get multiple, right? So I was like, yeah, this seems cool. And originally I wasn't even gonna flip. I wanted to hold in, you know, have rentals. 'Cause you know, everyone says passive income, which is great.

when you have money already and you have a good active income sure me I was like I put all my money into my first deal and then I was going to hold it and I was like wait I don't have any money anymore well let's back up where did you make the money for your first deal so I had a little car detailing business in high school for like you know a year or two oh let's talk about that yeah I mean it was just you know I liked cleaning my car right is this the first hustle was this the first real hustle you had or yeah okay yeah I had like a little um

local restaurant job for like a month. And I think maybe in that month they made like 600 bucks. Like it was a total waste of time. Did you find yourself chronically unemployable? Most highly, that was really the only job I had really the only job for like a month, you know? Um,

And then I was like, I was like starting detailing at the same time. And I was like, man, you know, I just made my whole paycheck in a day, you know, at the restaurant I was detailing. So I was like, all right, cool. I'm going to, I'm going to do detailing. Right. I'm going to go in on that. And it's like a low barrier to entry. You know, we maybe bought everything for like, you know, 2,500 bucks. And then, you know, made that back fairly quickly. What'd your parents think about you, about you doing all this hustling? What do your parents do? What do they do? So they were both retired teachers and coaches. Okay. Yeah.

- Yeah. - All right. - So, I mean, they always supported me. Like my dad, he would always say like, "Hey, you know, whatever you do, man, like I'm gonna support you." You know what I mean? And then he encouraged me. Like he was never the type to like, you know, like cut me down or anything like that, which I think that played a big part. You know, my mom the same way. You know, my mom, she was a little more concerned when I got into real estate. She was like, "Oh, it's a lot of money. You know, you're risking whatever this and that." Which is true.

but then, you know, I think she saw like, you know, some of the success and like showed her like, Hey, like these are some of the wires that are coming in. And she's like, Oh, okay. Maybe it does work. So, so you saved up your, your 2,500 bucks from your detailing job and you bought your first deal. So, well, I invested like 2,500 bucks into like starting it just, you know, from little money I had saved up here and there. Um,

made some money in that for a while. I, you know, when crypto was a big thing, you know, like 2020, um, you know, I put some money into that. It went up, you know, a little bit, but then I went down and then it went up a little bit and I like cashed out, um, put that money, um, into a down payment on the first place. Um, it was like around, I think 30 or 40 grand. Um,

All right, so stop. So you started to get to this point. So you saved up money. You did a little crypto play, which we all know is like, it's like frack eye casino. We get it. Yeah, it's luck. Yeah, you hit on a shit coin. I get it. It's fine. Do it okay. Oh, it wasn't even that. It was normal stuff? Okay, cool. Yeah, it was like normal. It was like, you know, Bitcoin, Ethereum. It wasn't like- Okay, cool. All right, fine. So you weren't hard gambling. No, no, no, no. Okay, you were riding the wave. That's better. That's better. So-

You did research on how to do this. You learned pretty much everything from where like YouTube, did you buy somebody's course? What'd you do? YouTube, YouTube university, man. Yeah. Yeah. And I mean, YouTube is great cause it's, well, it's free. Right. Um, and then you can just like, you can learn a lot of like how to get started. Right. Like, you know, if you want to really grow and scale, then yeah, you should probably do some type of coaching or mentorship, um, which is what I'm doing now. But, um,

YouTube was great starting out. I learned how to comp properties. I learned what to say to sellers, how to estimate rehab costs, all on YouTube. And then, so I had learned for maybe nine months or so before the time I started walking properties and making offers. So I just absorbed that information as much as I could. And then the summer after high school, I started walking properties

and, you know, making like a couple offers here and there. And then I was moving into my college dorm when my real estate agent gave me a call and he said, "Hey man, I got this property you might really like. It's a little condo by the beach. And you know, they're, they're going to sell it off market." I was like, "Oh cool. Like, that's awesome." - Okay. - So then I had moved in and then like immediately went back to see the condo up north, back home.

So I wrote an offer on it and I didn't hear from them for like, you know, maybe a week or two. And then it was like my first week in college. I think it was like a Thursday or Friday. I was like sitting in front of the cafeteria waiting for it to open. And my agent gives me a call. He's like, hey, you got the house or you got the condo, right? So, okay, well, back up. So to get in, there was no marketing. There's no bandit signs. There's no direct mail. This was just straight MLS. Yeah.

It was, it was MLS, but this one specifically was like a pop market. Right. But what I'm saying is you went to, you went to an agent. Yeah, I did. And said, okay, so if you're thinking you got to start out with some huge marketing budget to get started doing this, you don't, you just got to find a good agent that can hopefully find you a deal. Yeah, absolutely. There's so many free ways to get deals, you know, agents, wholesalers, whatever it is. I mean, yeah, obviously, you know,

in the future, you're going to want to like do your own marketing, control your own deals. Sure. But I mean, we still buy, you know, from other people, you know, it's, it's easy. It doesn't cost anything. No, of course. A little bit of time. And if it pencils at pencils, so it's good. All right. So keep going. So he called me and said, Hey, they accepted your offer. I was like jumping up. Like I was so excited, you know, went and then ended up closing on it.

my parents had like this handyman that like kind of did like little stuff around the house for them every once in a while. And I was like, hey, like, you know, do you want to like renovate this condo? I was like, do you do this? He's like, yeah, I could do it. And so he did like the bathrooms, the kitchen, paint. And then I had to like find another guy for the flooring, which is fine. And, you know, that kind of like started me getting into like

how to find the trades. Right. Yeah. Cause that's a big one. Like that people seem to have trouble with. Well, you know, I personally, I always tell people, I say, dude, if you want to start flipping, you need to figure out who their trades are first. Who's going to, who's going to actually do it? Because here's the, here's the, for me, right. This is the mistake that I find so many people make when they flip houses or start flipping houses is

They don't factor in the carry cost of the interest on the money into the overall deal. And every day you're trying to figure out, holy shit, who's going to do this drywall? Holy crap, I can't find a plumber that will come out. Who's going to do this? Every day that you're jerking around with that, those decisions cost you money. Yeah, absolutely. Every day. And so line your trades up first, I think is a good piece of advice. Yeah, at least have some type of idea, right? Like don't go buy a house and then have no one to work on it.

Oh, 100%. At least like, you know, talk to some people, interview some people like, hey, you know, if I buy these houses, would you be down to fix them up? And then, you know, it's a yes. Like, okay, cool. Now I have that. So that first condo, was it full rehab or was it light? Did you do light or cosmetic or what was it? Yeah, I put like 26 grand into it. It was like, you know, two bathrooms, you know, floor paint, kitchen. I mean, it was, you know, easy stuff. Did it require permits or no?

Okay, cool. So it was light work, easy work, which is good. I mean, I think if you're getting- Perfect for a first one. If you're getting a flipping, again, you know, don't, you know, people watch HGTV and then they see like walls getting moved and they see structural happening and like, oh, we'll just rip out this bathroom. Like, dude, no.

No, your first flip should, it should be cosmetic and should not require permits. Yeah, absolutely. Keep going. Yeah. So then got that one renovated, you know, listed for sale. This is a little too high, which, you know, learn that lesson. You know, ended up dropping it, getting a decent offer on it and then sold it. I was saying, cause that's another nugget. You, you bounced over it in the S solid. Yeah. You know, yeah.

People don't understand that when you go to price a property, talk about how important it is to price it right. What happens if you price it too high and what happens if you price it a little under? - You know, if you, especially like, you know, back a couple of years ago, if you priced it like a little under, you would probably end up getting bid up and going over a lot of the times. - Thank you, yep, that's the answer we're looking for. Keep going.

You know, pricing it right is like, so for example, like how I always price stuff now, it's like, hey, if it's worth 450, I'll try to price it like, you know, 439 or something like that just to, you know, try to get some good interest on it. Because, you know, we're in a business or at least I am of, you know, selling houses and moving them and not holding on to them because we don't have tenants in them. And, you know, it's very expensive. Like right now I'm spending like 160 grand a month on holding costs for all the properties I have on the books. So like that really adds up.

But back then, you know, it was worth like 300 grand fixed up. I had an agent, different agent, which was a mistake because I was going to rent it. And I got that agent to list it as a rental. And I was like, hey, just out of curiosity, what would the property be worth if I went to sell it? And she was like, oh, you know, maybe 325. I was like, oh, wow, this makes way more sense for me to flip it. Mm hmm.

um so ended up not being worth 325 was worth like 300 just fine um and so what'd you make on that first deal like 27 grand okay yeah which is great for a first first deal so that but the finance of it so what did you put what who did you finance with i just got like hard money then okay from local hard money um yeah okay cool so i'm like a local ria so you found a local ria okay they gave you hard money what was the rate on the hard money do you remember it was like

12 and three points. 12 and three? It was expensive. I paid for it. All right. So those of you who are listening to this don't know what that means. That means that 3%, the three points means you got to pay 3% of the total loan for acquisition costs. And then it's 12% running on the interest, which is, that's a lot. Yeah.

And what was the LTV on it? I think they gave me 82.5% loan to value on the purchase. And then they gave me 100% of the rehab in draws. Okay. So which means, okay, what that means was they had to, he had to come up with 18.5% down and then they financed the entire rehab costs based on the ARV value, which is the finished value of the property.

So they take the finished ride, the property, they gave me 82 and a half of that, which included the rehab costs. They hold that money in escrow. And then as long as you're going along, you submit work, you like take pictures of the work and you submit like scope reports and you say, this is where we are. And then they essentially release money as you go along. They don't just hand you the money. No, no, they don't do that. You have to prove that the work is getting done and they release it back to you. But the thing that people,

you're paying juice on that money, even though you don't have it the whole time. Yeah. So yeah. And that depends on a lender too. It's like, you know, that lender, I think they did charge me on everything. Oh, I'm sure they did. Yeah. I definitely paid for it on the first deal, but it's fine. You know, I always tell people, I was like, Hey man, like, you know, just,

just get in a door, right. Account for it in your, in your calculator and just get it like, yes, you're going to pay, but now, you know, now I pay like, you know, 0.75 points, you know? And then like, you know, sometimes less than 10%. So it's, you know, it, the more you have experienced, well, it's going to go down. Well, the good, the good news is, is there's a lot of good institutional large lenders that do this. It's what they do. And the more of a track, you know, it is, there's a lot in the more of a track record you can build with them.

uh, the better off you are. And even through some of the networks you can be in and some of the groups you can be in, you get better pricing just by being a member of some of these different groups. Yeah. I got my collective genius. Yeah. Okay. Right on, you know, a hundred percent financing with, with, you know, certain lenders and, you know, like a point low, just because you're in Joe Polish's group. Yeah. No, a hundred percent. Um, yeah. And so there's things like, there's, there's a lot of ways to skin this cat is what we're saying. Finance was okay. Go back. So first deal goes pretty well. Make 27,000. First deal goes well. Um, second deal goes even better. Um,

Again, really hot market. Had to compete with a bunch of offers to get this under contract. Got it under contract for, let me think now, I believe $200,000 and put about $49,000 into the property.

And then sold it, listed it on the market for $339,000. Ended up selling $16,000 over asking price. It's a great hot market, right? It doesn't happen all the time now. Anyway, so that one went great. We're like, wow, this is easy. Third deal went horribly, right? So third deal ended up owning that house for like a year.

And over the course of that year, lost like 50 grand on that house. They're not all winners. No, they're not. Anybody that tells you they've made money on every house they've ever flipped is lying to you. Yeah. And then, so the good thing is though, it's like, you know, throughout that time, it wasn't the only house, right? Like I had gone and gotten other houses, you know, to flip and, and, you know, those made money and those, you know, are what basically facilitated us to survive that. Right. Yeah.

Because if that was our only house, like we would have lost like everything, you know, without, you know, having to figure out some other financing source. Yep. So ended up losing like 50 grand on a house, way bigger renovation than I should have taken on as like a third flip. Right. But the house now, it would have been fine. Would have made money. But what I did is I made the mistake of thinking my handyman was quite expensive.

was qualified to do a four bedroom, four bath, 3000 square feet. That was in like horrible shape in, you know, it was like an 800 plus thousand dollar house, not the guy for the job, right at all. Um, so that taught me a very valuable lesson of, you know, making sure, uh,

you hire the right people, right? And you know, you don't have the one guy doing everything, right? Like you have the plumber doing plumbing, you have the drywall guy doing drywall, you have the electrician doing electricity. You don't have one guy doing all those things because he's not going to be great at any given trade. Like, yeah. And chances are your house is going to fail. Yeah. Yeah. Right. So, and the reason we lost so much money, I mean, the holding time was one thing, but we ended up renovating this house like three times because first time,

The guy underbid the job and then, you know, towards the end, he like ran out of money. Right. And then he just like ghosted us. I was like, all right, well, that sucks.

Um, anyway, roll, roll, roll number, roll number, roll number one with contractors. Never let them get ahead of you. Yeah, absolutely. Just like we talked about the draws earlier. You've got to, you got to slow roll that money out as slow as you can and they can never get ahead of you for that very reason. That was a lesson learned. There you go. Expensive lesson. That was the hard way. I've learned that same lesson. So I feel, yeah. And then, so had another guy come in, um, and he finished the house. He did well.

The only thing is that when you kind of like pick up on someone else's work, like, you know, the quality wasn't quite there, especially for, you know, an expense. You're trying to get top dollar. Yeah. Right.

So put the house on the market and then it ended up not selling because of all these little weird defects. Right. You know, little stuff that is basically we're cosmetic and it just caused people not to buy the house. So I ended up having to pull it off the market, redo all those things we had to do, redo all the drywall texture. We do like most of the trim, you know, floors were scratched because it's a bad contractor. So like how to redo all that stuff.

Anyway, put it back on the market a third time, or I'm sorry, the second time, and it sold, right? Okay, was this the first disaster house? Yes. Okay, so were there moments in this time when you were like,

I'm fucking done with this. Like, I just want to do anything else, but this I'm just so done. This is just, this is not what I thought it was going to be. With that house. Yes, absolutely. Um, but I, if, if you're asking like, you know, flipping as a whole, no, I still, I still liked it because I had other projects that were going well. Right. Yeah. Um, you know, this house, I hated seeing it.

You know, I was just like, every time I would go drive up there for like a year, I'm like, oh man, here we go again. I'm going back to this house and it's still not done, you know? Um, so anyway, um,

That house sucked. And I wouldn't recommend someone to do it, but I'm very happy that I did because I learned all these valuable lessons on it. - So you said you were flipping, that was an $800,000 house. - Yeah. - Is there a price point that you try to stay in to keep things moving or you would flip anything? - So I'll flip most stuff. I mean, I won't go like crazy multi multi-million dollar stuff. - Yeah, that's not good. - Yeah.

I mean, I know some people have made a lot of money doing it. It's just not for me. Well, the reason you got to be careful, I like to address price point when I'm talking about flipping with people because everybody thinks, oh, I'm going to buy this multimillion dollar house. And then, you know, if I put in $200,000, I'm going to make $400,000. It's just like, why would I run around to five job sites when I can put everything here and do this? And speaking from experience, when the interest rates changed on us, when they turned back in 2020, late 2022, early 2023, the rate shot to the roof.

I was sitting on a $4 million house in Sedona, a $3 million house here, two or three $2.5 million houses. I mean, we got caught with a lot of cards in our hands. I mean, our hands... That's a lot of exposure. It was massive exposure. Yeah. And yeah, it took a pretty deep... You know, some of the stuff, like the Sedona house...

so donahouse was good we made i want to say that turned almost a million and a half okay so don't up but we took a beating on everything else to the point we really kind of broke even on it right on a lot of it through that turn and and so yeah it's be you gotta kind of stay within yourself

uh, within those price points, make sure it's always something that's going to sell, which I like that. Absolutely. So keep going. Yeah. Um, and you know, but to that point too, is like recently, and this is just like our market specifically, like everything, you know, 500,000 and under is selling, you know, pretty fast. Right. Um, anything like a million and over, um, you know, million to like 2 million selling pretty quickly as well. Um, it's like that,

middle ground, like, you know, like six, seven, $800,000 price point. That's like just not moving for us. We're going to do something crazy. So we do it like the Joe Rogan podcast here where like people get up and use the bathroom. I just, I just got to check a camera real quick. It is Saturday here in the studio, which means that my help is not here, but I just want to, I'm looking at this camera and I'm worried it's blurry. So I'm going to check. Okay. Hang on a second. Yeah. Right. I don't want to get the whole thing done.

I hear Chris. Good. Okay. Cool. That's how it works. Yeah. Sorry. You got me concerned there. No, you're crisp. I just, I just, for whatever reason, I looked up there and I'm like, man, does he look blurry? I'm like, no, it's just me. There you go. I'm just blurry today. I guess that's how it works. Um, so you, you did the model, you did the crazy house. You were at three houses. How many, it was a, at what point did you start to scale?

So first year did like nine houses. Okay. So you're doing kind of one or maybe two Z's at a time. Yeah. Yeah, exactly. What's your team look like when you're doing this? So with those first, so first one I did it by myself. Okay. Like you did the work? No, no, no, no, no. Okay. Like no partners, I mean. But it was you and Handyman? Handyman, realtor, basically. Got it. Okay. That's the team. That's number one. Okay. Got it.

Number two, brought on a partner because I needed to show reserves, right? Because like the hard money lenders, they want to see like, hey, you can pay the interest for six, nine months, whatever it is. So I had to do that, brought a partner. I mean, we did probably number two through the number like maybe 14 together. Okay.

And then after that, we kind of just went separate ways. Nothing bad happened. We just had like different visions for it. Okay. So, well, can we talk about that? Yeah. Okay. So where did you find your partner? Local RIA, local meetup group. Okay. So you just found this person, a local meetup group and they're like, yeah, cool. Okay. I like what you're doing. I like what you're doing. Let's, let's do it. Yeah. Was there any formal agreement about how things would go up front?

Okay. There was. Okay. Was there any part of that agreement that involved the dissolution of what happens if things didn't go well? I don't believe there was, it was just a very basic, like we had an LLC together and, you know, just very basic operating agreement.

And, you know, it was a very mutual thing. And it really went well. Like, you know, we're still, you know, very friendly today. You know, we'll see each other every now and then. But, you know, obviously it could go. You got lucky. You got lucky. It could go very differently. The point I was going to make is in a lot of people that –

A lot of people that jump into partnerships earlier, especially around real estate, like you had a need. You needed his capital to back up your reserves. They could make you more bankable. You needed that. I understand that. And probably from his end of it, you brought the expertise of the project management. Is that accurate? Yeah, project management, you know, trades. The trades, yeah. And, you know, I was going to like see properties, make offers. Yes.

So you were the sweat, he was the back end cattle at that time. - He would do work though. It wasn't like he was totally silent. - I'm not saying he was a silent partner, but my point being is there was a reason for both of you at that time in the equation. So many people, especially in real estate, flipping, just want to do it with somebody else because they just don't want to do it themselves. They want to go-- - They're scared or yeah. - Yeah, they're scared. They just want somebody to do it with them and we can do this with them. That's a terrible reason to get into business with anybody is 'cause you don't wanna do it by yourself. - Absolutely.

So make sure that there's something that you both need to do equivalently on both sides of it. Now, the reason he got very lucky, you got extremely lucky that it was a good amicable split. Everybody's happy. So many business relationships do not end that way. They end very, uh,

poorly. And the best way to avoid that is if you're going to get into a relationship with somebody contractually that involves what's going to happen and what my end of the business is, your end of the business is, make sure you include kind of that prenup. What happens when you break up? That way, if things aren't going the way that either party wants, you just trigger the dissolution clause that says, I'm going this way, you're going this way, you get this, I get this, this is how everything breaks down and everybody's good.

and the people that I've given that advice to that have gone into business, that I've seen those businesses stop for whatever reason, they're always still friendly with the people that they were in business with because it's just a dissolution. You have those expectations set up. Yeah, you know. If this doesn't work, this is what's going to happen, and then there's no...

There's no money grab. There's no asset grabs. There's no relationship grabs. There's no reputational damage. There's none of that stuff. It just... Hey, man, we just... We got to a point where it was the end and we moved on. Glad that worked out for you. So that was good. So the team with this guy, when you were with this guy, what was the team like other than that? It was basically...

- It was him, it was me, it was our realtor and just our subcontractors. Like that was it. We didn't have any employees. Oh, we had a bookkeeper, which was like a vendor. - Okay.

Which is great, by the way. Everyone should hire a bookkeeper. So your subs, you weren't doing anything GC? No. Okay. So you weren't, at this point, you're still doing roughly cosmetic stuff because you're not pulling permits. Yeah, no, we didn't really. The only thing we really pulled permits for were like, you know, roofs or ACs or, you know, just like majors. But in Florida, if I'm not mistaken, the subs, a roofer can come pull his own. He can pull his own permits and plumbers can pull their own permits and all that. You don't need a GC to oversee that stuff. Okay, cool.

So the trades you're using are licensed trades or pulling permits where you need them, that's fine. Okay, good.

good. Keep going. Yeah. And then, you know, we obviously like, you know, we we blew through a lot of trades just like, you know, you know, we didn't have the process there. They weren't capable of what we wanted. So, you know, we cycled through a lot. But then, you know, after a while, we figured out like, hey, these are good guys. You know, let's make sure, you know, we can keep them. And now a lot of them, you know, so work for us, you know, or me. And he'll do like, you know, a couple flips here and there.

So the question, okay, let me ask you this. So how do you keep trades happy? Number one, one of the hardest things in the world, especially at scale, flipping houses, or the worst thing ever is pulling up to a house when somebody's supposed to be there and they're not there. Right. It's the... You just...

like the rage button just goes through the top of your head when this happens and it happens too much. So do you have a way that you incentivize your contractors? Do you give them bonuses for finishing early? Are there anything you do like that? Yeah. So, I mean, one big thing to keep trades happy is like, you just pay them on time, right? Like, Hey, there's a lot of work, pay them like that day. Right. Or, you know, maybe next day at latest, it's like, you know, I, I talked to so many guys, it's like they work for other flippers. I like pay them at the end of the month or when they sell the property, which is even worse. Yeah. That's crazy. And then, then that screws them up.

But to answer your question is like, what we'll do is like, hey, if you're done by this date, you get X bonus, right? And now that I have project management, now I do that with them. For the subcontractors, they're usually in and out doing their own job. So it's not really totally necessary. It's more like an overall project thing. But we do have one general contractor that we use now and he's

he's like, hey, we need like this payment schedule. Like I can do your jobs really fast, but I need to like get paid X amount every week just so I can have more guys at the house, you know, which is a little bit nerve wracking. And I wouldn't do it unless I completely trusted them. But we also have, you know, it's this,

if this work is done, right? It's like, Hey, you can get paid on Friday, but this amount of work has to be done. You know, my favorite thing about construction is it's like a three legged stool. One of them is good. One of them is fast and one of them is right. Right. You're going to get two of those three legs, but you're never going to go all three. If you want it done, you aren't done right. And you want it done cheap. It's going to take a long time. Right. You know, just it's yeah. Good, fast and cheap. You're just never going to get that. You just, those three do not go together. You get two of them, but that's it. So yeah,

You got through. So now you, at what point did you decide you needed a project manager? Cause it's because I love that. So, well, that was honestly probably like the biggest like difference in, in my business and like hiring a project manager made me do, you know, we were doing, I was doing one or maybe two at a time or like one or two a month, almost immediately within a month I did four or five.

- Just by having somebody at the job sites, running the job sites, making sure they're there. - Absolutely. Now, it was a lot of work to train them upfront, like on the first couple of projects. After that, man, it's like, they're sailing. - Well, you're essentially teaching somebody from scratch to be a super is what you're doing. - Yeah, basically. That's exactly what it is. - That's exactly what you're doing. - Yeah.

To work with in that role for you is they handle all of your construction. They make sure the jobs are on time and you're bonusing them for work being a part of time. Exactly. And the reason is, is like, you know, in our market, like if we could use the GC man on every job, I would totally prefer to do that. It's just so much easier. It's less risk, you know, like, and they kind of just got their bid and you know, if they go over, they go over, you know, reasonably, um,

But where we are, it's like the general contractors are extremely expensive. So it's like, man, like we're doing stuff that can you get cost plus 10 doesn't happen. No, no. With our one guy, it's like, you know, he'll basically just say, hey, like, you know, this is best I can do. This is my cost and this is what I want to make on it. He will do that. But most of them are just like, no, kick rocks. Like we're not doing that. I have friends in the trades here in Vegas that are contractors that will say stuff like,

like, dude, I went over to this lady's house and she wanted me to redo her bathroom and I did not want the jobs. I gave her the stupidest number on the planet. And she's like, yes, I'll do it. And now I've got to scramble to find jobs to get to this bathroom job because there's just so many more people, you know, it seems like every year skilled trades are getting less and less of people that are really talented at what they do and can do things on time. They're more and more in demand, which is pushing that price up. Yeah, absolutely. So

I'm guessing that when you walk a property for acquisition, like we'll talk about acquisition first. So when you walk a property for acquisition, I'm assuming you have your term sheet and you know, you do it and you have your budget that you fill out. How often is your budget that you fill out the house in line with what you end up paying the subs or the GCs?

- It's usually fairly close. Obviously, line item by line item might vary a little bit, but it's usually pretty close. And that was not always that way. It was like the first maybe 10 properties were like, why are we going over budget all the time? - Did you pull your cap rate sheet off the internet, your walk sheet? - No, I really just kind of like pulled it from my head. I was like, okay, this bathroom cost

you know, 3,500 in labor and it costs about, you know, 1,700 in material. And I would just kind of like take that, you know, from job to job as it grew in my head. Then where I really got, you know, kind of screwed up is, well, I didn't realize like, you know, a,

five by 10 bathroom is not gonna be the same price as a six by 15 bathroom, right? I was like, "Oh, well, it's about the same." So I was like, "Well, maybe $500 more." Not the case, right? And I think that's what happened. Now we're fairly close. I mean, only really if like something unexpected comes up, then hey, we might go over. And it also depends on the project manager too. I have one project manager who will get stuff done super fast.

But he always tends to go over budget a little bit because he'll just pay for the person that can do it sooner.

Whereas I have another project manager who's a lot slower, but he's always on budget every single time. Yeah. So maybe, maybe others. So, so yeah, there's a given, there's a given take there. It's like, you know, it's like Cody Sperber always talks about real estate levers, right? There's, there's lever here, lever there and on budget and over budget, but faster, but you're paying the carry time. Right. So it ends up being the same. It ends up washing out. Right. One lever turns the other. Yeah. Yeah.

Which I mean, if I had a preference, I would say probably do it faster because you can just get the property listed and get your money back faster. - Turn the money. - Yeah. At the same time though, it's like, hey, if we're going over budget, $10,000 on every house, over 80 houses, that's a lot of money. - Well, let's talk about your acquisition model.

Um, so where do you, so obviously you still work with wholesalers. You still work with, you still work with, um, uh, realtors, but do you have a direct to consumer marketing you're doing now? Yeah. Yeah. Google, Google's, um, been pretty good. So you're on Google. Do you do direct mail or no? We, we haven't, we will do like some here and there and just on like specific ones. Like, um, if we, we know like a specific, you know, property or owner or whatever, um, you know, has a high, um,

a high equity. Yeah, no, like a high, um, what's the percentage chance of like selling, you know? Um,

Other than that though, no. Um, I mean, we might roll that out in the future. Um, but you know, we, we did Facebook for a while. Um, and the Facebook didn't really convert how I wanted it to. And I know it works for some people, but for, you know, me and in our operation, it, it didn't really work the best. Cause I think what happened is it's, it was very competitive, right? Like with Google, we're number one on like a, not a crazy ad spend in our area. Um,

So the leads that come through Google are a lot more qualified because think about it, right? They're saying, hey, I need to sell my house faster cash today. Specifically looking for this. They're looking for it. Whereas on Facebook, they're like, oh. It's entertainment. Yeah. They're like, oh, I'm scrolling through Facebook on my lunch break. And they're like, oh, I guess I do want to sell my house. Let me fill out this form. I always compare that to like, same thing with residential real estate that we do. If somebody searches in, you know, what's my house worth, whatever, same thing, they're looking to really sell it. But if they're on Facebook and it's like,

What Game of Thrones character are you? I don't know. How much is my house worth? I don't know. How much is my house worth? They're not really, they're just entertainment scrolling. So I can definitely see that. With the Google ads, are your competitors also running, even though you're number one, are they also running there? Yeah. Do you find that because you're on Google, and I have found this in the past with direct-to-consumer like that doing acquisitions, that because it's on Google, how many competitors are you normally up against or do you assume you're up against when you go to the walk-in house? It's a lot less. It's,

A lot of times we're the only ones. Really? Yeah. Good for you. I probably shouldn't have said where you work. Probably shouldn't have. How about edit that out just to protect your business a little bit. Yeah. Well, but the other thing is too, is like our competition has gone down a lot too. So like, you know, whereas when I used to walk properties and I would go to like a wholesaler's deal or like an MLS deal that was like priced very well. There'd be like 20 people at the house. Right now it's like there may be three people. So it's just like,

A lot of people got out of the business just, you know, in the past couple of years has been more difficult. So our competition has definitely gone down. So less competition. I know that Florida's markets are a little bit in turmoil. You're sort of to a beach city just north of Palm Beach. So you may be a little more protected than some of the more rural areas. I don't have any idea what's going on with your market. Yeah. I'm very aware that markets are very, very micro, not macro. I'll tell you, like,

The houses that I bought at the end of last year, I just had to take else on. Interest rates. We got affected. Where you guys here are in Vegas, you guys got affected six months before we did. So it was interesting. So you guys were saying market's bad. I was like, man, market's great. What are you talking about? And then we got hit. Oh, no, no. I mean, the market here has been great. Those high-end flips, we got caught in the shock of when the interest rates first went up. And it was like that, holy shit, what just happened, right? And everybody kind of put the brakes on everything, which is why we got kind of zapped.

But as far as overall sales here, man, Vegas has been, Vegas is an anomaly to this thing. - Interesting. - Just because if you look at the growth pattern that we've had in the city over the last 10 years, what other city in the history of the United States has gotten every major sports team in the period of 10 years? - Yeah. - Right? - It's crazy. - Yeah, you're right. That's a good point. - It's crazy the growth that we've had in the city. And it continues to grow.

But yeah, keep going. So Port St. Lucie is a market receding? Is it? What's going on? No, I wouldn't say that's receding. I would say there are some pockets, you know, maybe a little north, a little south of us that are. But there are other parts. There's a water over there if you want to grab one. You know what? I will grab one. Yeah, see, this is how we do it. We don't care. We keep it real in this thing. It's what we do. It doesn't matter. Yeah, dude, it doesn't matter. That was a real joke right there. That was authentic. The authentic joke.

That's exactly why we keep those things over there. So there you go. Yeah. They're just set down. What were we saying? Oh, market. Yeah. So I would say where we're at in person is it's growing very fast as well.

So that's been good. And there's a lot of new construction, which obviously as flippers we're competing with, but you know, it's, it's interesting because the new construction is not for the price point, not quite as nice as, you know, where we're doing flips. Like they have maybe, you know, they don't have quartz countertops or they don't have, you know, tile shower. They maybe have like fiberglass or, you know, Formica.

So we're around the same price point, older house, but much nicer, you know? So, you know, we still sell our flips even in highly new construction areas, which is good. That being said though, there are certain things with HOAs. I know you guys have a lot of HOAs here, but like,

Florida is very mixed, right? Certain cities are like all HOAs, certain cities are none, certain cities are, you know, 50-50. I would say certain cities where it's 50-50, those HOA communities, especially with high fees, get...

Like no buyers. Really? Yeah. And condos are even worse because no one wants to buy condos. Yeah, dude. It's funny. You did your first deal and people probably hearing that. They're like, oh, I'm going to buy a condo. This and that. But I wouldn't recommend buying a condo. No, no, no, no, no, no. Well, I don't I don't like I don't like flipping condos. I like investing condos. I'll tell you why. Florida's a little different because you've got those big ones on the beach. That's fine. But I'm talking about here. The mid rise, mid rise, two story condo complexes that have a gazillion units in them. To me, those are like cans of soup on a shelf. Right.

Right. I don't care how far you improve your product. Like somebody else can sell their, the neighbor can sell their identical unit that maybe doesn't have as nice as cabinetry and flooring and demolish your pricing. So you really, uh, to, if I like single family homes, cause it's a, it's, you're able to create a level of uniqueness in that product that'll hold your pricing much better than the car. Yes. And well, one thing that's bad in Florida is like, you know, I mean, I'm sure you've probably heard of it, but like, you know, buildings over a certain age, um,

They have to get their milestone inspections to make sure. Yeah, the roofs. Yeah, roofs, like all the structure. Because, you know, we had that building in Miami collapse a few years ago. Now everyone, I think by like 2025, has to have their milestone inspection. They have to have so much in reserves, like per unit. And if they don't, then...

it's bad. With huge assessments. That's a good point, dude. In Florida, is a new roof part of your standard scope of what you do? Oh, we do new roofs on like 95% of our houses. Yeah. It's like, it's very rare that we don't do a new roof. Yeah, because that's what, I'm guessing that's one of the first questions buyers ever ask is, how's the roof? Yeah, well, because number one,

They need to get insurance. And if they can't get insurance, then they have to buy cash. Most retail buyers aren't buying cash. Then if they can get insurance and it's an older roof, then it's probably going to be more expensive. So yeah, I've sold houses with new roofs and without. The new roofs always sell way faster. Always sell faster. Always. So it's worth it. Yeah, we had a few hurricanes come in like, you know, 040506. And so everyone's roof was like, you know, 506. And now those are coming to...

the time where they need to be replaced. Yeah. So even though they're perfectly fine, a lot of them, we still replace them. Dude, a buddy of mine, I won't mention his name. He's in my mastermind group just to exit his roofing company. Nine figures. Wow. That's huge.

And dude, and you want to talk about a dude that you look at his face that he used to be like the most stressed out guy I've seen, but you look at him now and he's like, it looks like he just floats in on a pool of Jell-O. Yeah. I don't blame you, dude. It's good. But yeah, he does a lot of business in Florida. So he's, he's from the Midwest, but he's grown his business all through Florida. Yeah. That's a, that's a big one in Florida. Like there's, there's so many roofers. There's so much business. Yeah. It's crazy. How much business. So when you're doing your acquisition on the acquisition end, um,

You do your walk, you run your bids. You've obviously run your bid sheet comparable to what you're spending currently in the marketplace. Adjust your bid sheets, kids. Make sure you adjust your bid sheets to what current pricing is for materials and for labor, both. So you do that, you come up with your number. What margin are you looking for on a house when you make your offer? Yeah, great question. So for anything that's like we're buying from a wholesaler or on the MLS, it's easier, right? Because we don't have to market. We don't have to lock up the deal. We just basically tell them our price, right? Mm-hmm.

Um, so that being said, we shoot for like a minimum $40,000 profit on every deal or 10% of the sales price, whichever is greater. Um, so even if it's like a $300,000 after repair value, we're still going to shoot to make 40 grand, um, for properties that are, you know, direct to seller where we have to pay for marketing, you know, pay the sales guys more on it. Um, and you know, there's just more work, right. Um, those properties

we'd shoot to make 65 grand or 15% of the after repair value, whichever is greater. - Whichever it is. - Yeah. - And obviously now, I guess with less competition, you're able to buy that deep there. - Oh yeah, absolutely. I bought my personal house for like,

less than 50% of what it's worth. And it wasn't even like that bad of shape. What, what person, I mean, I'm not personal. I'm sorry. What percentage of deals you walk and offer at that deep? Are you getting, I don't really walk any anymore, right? Your acquisition people. Yeah. I thought the company model, not so much you, but the, the guys, if, if there is access and we're close in price, we will walk it. Um,

Um, if there's no access and you know, you're going off the wholesale pictures from investor. Yeah. And if they're good, they're good pictures or good walkthrough videos, obviously we're still going to offer a little bit lower if we can't get access. Sure. Um, what percentage of the, I guess the better question rather than walk is what, what percentage of the offers you're writing? We usually, we'll usually up the, um, the, uh, what do you call it? The rehab budget by like 10% minimum, you know, or 10 grand. No, no, but I'm saying what KPI, KPI wise, if I write 10 offers today, how many of those am I going to be able to lock up?

Oh, if you write 10, so normally the guys will lock up and it depends on the, on the sales guys, but usually like one in 20 offers. Okay. Well, so one in 20 is your, is your closer to like API. Yeah. What, how are you incentivizing your acquisition? So they get paid a certain fee for, you know, any deals that are, that they, you know, bring in that are MLS wholesale, you know, that's, that's a lower fee. Okay. Anything that gets direct is a higher fee because a lot more work. Sure. So, so,

Now you're, but so you're also doing, you're doing direct through Google. So you're also wholesaling out. You're a wholesaler now as well. Yeah. I'm getting more into it for sure. Okay, cool. So do you have a Dispo team that's handling that or not? Yes. So I have, I have an in-house real estate agent that is just like on salary to list all our retail stuff. But for wholesale Dispo, we actually contracted out just because the price is like

basically what we would pay that, you know, take like 10% of the assignment fee is like, I paid dispo person that, who cares? Plus they already have, they're paying for investor lift. They, you know, have like, you know, collar and everything. Like it's well worth it. For those of you who don't know what that stuff is, there's, there's, there's like a, there's like a marketplace kind of like the MLS, uh,

for off-market properties from wholesalers that they will run out to investor lift where you can put in your search and then they'll send you stuff that's off market. Out here, we just see the wholesaler fees are just stupid. Yeah, they're crazy. They're just, I mean, you know, I swear it's like YouTube just spun these guys up into a frenzy. We're like, you can make $50,000 a deal by wholesaling it. And you're like, you get these numbers and you're like, I literally got one yesterday. So I can find it. I got one yesterday and this is, I'm hoping this was a mistake, but this was the dumbest shit I've ever seen.

Hang on a minute. We look up investor left. Yeah, I paid a $50,000 assignment fee. Hang on, here we go. You ready? Here we go. And you could read that this is, I'm really reading this. It says, hi, John, price for investor-lit deal in Clark County, Las Vegas, 891.3 was reduced to $640,000.

ARV is 650. So where was it before? I don't know. I'm praying this is wrong, but I'm like, what are you doing? And I mean, you look at some of this stuff and it's like ARV 515 asking for 50. Like, dude, there's no meat on that bone. Like it's just, it's stupid what some of these things are coming back. Yeah. So when you, when you deal with wholesalers, let me ask you this in Florida, when you're dealing with this,

How much are you undercutting their investor left ask?

just here's what i can pay and that's it if you want to take it or leave it yeah so basically yeah so it's not like you know we're not going to say hey you're asking 420 420 works for us you know screw you 380. you know we're we'll just tell them and this is our number based on yeah this is our number um can we get it done yes or no and if we can't can you go get a reduction if you don't sell it to anyone else yeah and wholesalers seem to appreciate that i mean i know like you know myself like you know i was like hey guys even if you have an offer

Give me the offer. Even if it's a low ball, tell me what you can actually do. Like, you know, be real with me. And if I don't sell it, I'll go try to get a reduction and then sell it to you. Sure. I, you know, I, I love in, in residential real estate. It's so funny, man, that, and I tell, I tell, you know, we have 585 agents here and I tell the preach this like the gospel. There's no such thing as a bad offer. There's just no such thing as an offer. An offer is an offer because an offer is

in the residential side of it can be used to show your client what the market is currently thinking of your house, whatever that may be. Right. It's a investor offer. It's leverage. Dude, but you love these, you send offers to agents sometimes and they're like, I,

I am outraged by this offer. I am disgusted, sir, by your offer of compensation for my property. I will not even bother to present this to my seller. It's like, dude, calm down. Yeah. They're personally like insulted by it. Yeah. Why are you personally? Did you build the house? Did you design the house? Did you decorate it? Like, why are you insulted? Just use the offer to either A, get me a counter or B, maybe it gets you a price reduction on a price that might be overpriced. But there's no such thing as a bad offer.

No, never a bad thing. Hey, do you want to sell it or not? Yeah. What do we want to do with this? Like do something. So there you go. There's your, if you're a residential realtor, there's your, there's your lesson for today. No such thing as a bad offer. No such thing. So that's the acquisition. Then you go through your, have your property manager running this stuff. How many properties are you running at one time? So right now we have 37 flips on the books, which is a decent amount. I think we were like at max, like up to 40 and then like sold a couple. Yeah.

recently. So, yeah, I mean, it's a lot of properties on the books right now. I wish I would have done that. Dude, okay, so in 2017, I lost my ass on this one, right? Okay. In 2017, we started Vulture Fund because there was money here, so we raised... We had roughly $12 million in buying power. Okay. Right? And because we were spending on the capital, we were paying juice on the capital, our thought was we got to place this capital. We had 137 flips going at one time. Wow. And it was...

a mitigated disaster. Wow. It was, it was, it was, it was a disaster. What was your monthly liability on? Oh bro. It was, well, it was a disaster. I don't even remember. Maybe I blacked it out or blocked it out, but like my office is in there. Like at one point it just got, it was so hard to manage. Like you see these squares on the, on the, on the wall in here. I had pictures of the front of the properties with the address written on them. And I just had them taped all over the walls.

of my office. And like, this is like, these were done and then I'd move them to the dispo section of my wall. And then I'd move them to like, this was all just like paper. And no, no, we were using, so there was a, there was a, there was a system called Taza REO that I had used. The banks would use during their REO stuff, but it had really good workflow for like, for field services and all that stuff. And I called them and I'm like, you're pretty much out of business with REO. It was not, nobody's doing REO anymore. Can you tweak this for,

for my business so we can communicate, do change orders, do all this stuff. And they built us, really kind of just tweaked their system for us. - That's cool. - So we had a great thing, but even with that many properties, I couldn't get my head around it. So I just literally had to have this stuff. I looked like Howard Hughes in there, like just houses taped,

all over the walls, all the way from the floor to the ceiling, every inch of my office. - That's crazy. - And it was nuts. It was insane. And it was impossible to deal with at that scale. I mean, look- - That's a lot to manage. - Dude, for a couple guys, and we had like, we ended up hiring like four property managers and it was impossible. It was impossible. It did not go as we would like it to go. Yeah, that was a big L quickly. Quickly, we stopped that quickly.

We got through one cycle of the money and then that was it. It was just like, no, we're not doing this. We're not doing it. Because the goal was to try a cycle. The goal was to cycle that money two and a half times a year, but there was no way to do it. There was no way. Anyway, back to you. That was just, I don't know why I told that story because I'm having like flashbacks right now about how terrible that was. But yeah, it was funny. So 60 to 10 barbers, you're running 40 at a time is where you are. More or less, yeah. More or less, which is manageable. Yeah. So.

So you, cause you, cause on 40 houses, you have the trades that can handle that. You're using the same guys. Now, do you have a spec, but is everything the same? Do you have spec using the same flooring, using the same tile, using the same everything? Yep. So we have three different design packages. So houses, you know, under 400,000 get a certain design package. It's like, you know, a little bit cheaper tile, a little bit cheaper, you know, cabinets countertops, um,

You know, 400, it's like a million. It gets a little bit, you know, nicer design, a little bit nicer tile in the bathrooms, you know, different countertops. Are you buying that in bulk? So it depends. It depends on what it is, right? Because obviously if you buy in bulk, stuff costs...

money to store right no no it doesn't well no it does not depends where you buy it but drosians we were buying flooring from madrid yeah but drosians in florida no okay it's california here i guess whatever it's a big it's a big they're hard scale they're hard surfaces um we were buying 100 000 square feet of flooring from them at a time and they would store it for us they would store it for you really we could go get it because i was i was literally just on the phone yesterday um

with this guy who's like, hey, we can get this 80,000 square feet at a much cheaper price, but you have to take it from us. We can't store it. I guarantee you'll find somebody down there that'll store it. Interesting. I'm going to have to ask that. Yeah, because here's what happened. If they're having a bad quarter, well, you just missed it. You just missed the cutoff for the financial quarter. But ask at the end of the quarter if you can, because if they're having a bad quarter-

they'll let you buy it in bulk up front and you say i'll buy it your books look great this month but you gotta hold on to it okay and we'll just come get out of the yard as we go so there's tiles easy right slabs are a little harder uh but tiles easy i just stack this shit up and for you it's easy um yeah i would definitely that's that yeah that's a really good idea i'm gonna i'm so gonna do that that's good yeah yeah check that we it was well you just saw what was it what was the discount on the 80,000 square feet you could um so they were they were doing it um

Our original price was like $1.66 and then we did a lot so they dropped us like $1.29 or $1.19. I don't remember. That's massive. And then if we bought like the $80,000 it dropped us to $0.80. Dude, that's massive. It's huge. It's massive. Is this Tyler or Vinyl Plank? LVP, yeah. And it's nice. It's good stuff. It's not like cheap stuff from Home Depot. That was the smartest thing they ever did was put that

L in front of it for luxury. Yeah. No, it's not. It's not vinyl flooring. It's luxury vinyl floor. Yeah. Oh, oh, really? In terms of as luxury as you can get with a vinyl. Yeah. No, no, dude, it looks great. It's very, very durable. And in certain places like Florida, especially near the beach or near the water, it's,

it's magical. Oh yeah, for sure. It's not like, you know, hardwood that's going to get, you know, like damage with water or something like that, you know? All right, so let's move on. Let's talk about taxes because you're getting killed. You don't hold any of this stuff. No. So what's, what's, what's the tax plan? Because I mean, look, the number one reason to get into real estate is taxes. I mean, you know, the tax code is built for,

To essentially, as much as possible, wipe out your tax liability by owning real estate. I mean, things like segregated cost, you know, evaluations where you can accelerate the depreciation on properties. I mean, this stuff is in the tax code for you to use.

What's the plan, dude? Because you got to be getting murdered. Yeah. So the plan is, well, obviously we have to, we're reinvesting into the business big time now. So like I stopped taking a paycheck from July of this year. I took, you know, the first six months, July 1st, I stopped taking a paycheck. So how are you handling the capital gains on these properties? So I'm not paying quarter lease. I'm just getting hit with the bill at the end of the year in April. Right. Also, like I'm just, you know, I got a new office. Right. I hired some new staff. Right.

and you know, like I still had a couple houses that like I had to take a little bit of a loss on last year. So those are, you know, offsetting it a little bit. I am planning though, um, to buy some large multifamily before the end of the year. Um, and then we're going to go and, you know, obviously do a cost segregation study. Yeah. Um, and you know, depreciate what we can of that. Um, there's a lot of good deals, man. Cause, cause I'm telling you a lot of syndicators bought those deals, uh,

and the bill is due. Yeah. The check is due. Right. Because they were on teaser rates that are now adjusting, and those deals no longer make any sense. Not at all. And there's going to be some fire sales on that. There was this one from this guy that I know. He was the one with the connection, but it's a 66 unit, and, I mean, it's a total disrepair. Like, it needs, you know. Class C. Yeah. There we go. Yeah, it's a Class C. Needs work. Not a horrible area, but, you know.

Still classy. And fixed up, it's probably worth like seven to $8 million, depending on who you ask. For 66 units? 66 units. So what's the acquisition cost? Well, we're trying to get it for 900. Guy wants to. 66 units for 900,000? But the caveat is it needs over $3 million worth of work. Okay. To get it fixed up, which is still a good deal. Will he carry the debt? Huh? Will he carry the debt? He will carry a good majority of the debt. Yeah. Yeah.

but he does need a certain amount of money. 66 units for that. That's wild. Yeah. So we're, we're kind of in limbo at like 1.4 right now. And it's like, it's like an okay deal there, but it's just a lot of risk. What's the vacancy rate on a percent right now? Oh, it's just, this is a shell. Yeah. Yeah. Yeah. This is a, this is an absolute box shell. That's been sitting there for. Yeah.

So zero cashflow. No, this is, you're, you're buying a project. You're, you're, it's a project. Yeah. You're buying a project. Okay. Yeah. Yeah. So you would have to get, well, you're not going to get, I mean, the cost seg on that, if it's a show, you're not going to get, I mean, you're going to get,

dog shit for this year. You'd be off waiting till that's really going to be like a play for at least next year. You know? Um, I mean, you know, I, obviously I purchased some vehicles and stuff, which, I mean, those are like, okay. Um, those are not like, you know, the greatest, but I mean, it's still right off, you know, a couple hundred grand. I'll tell you again, I have a friend of mine that's a really good cost segregation guys, probably the best guy in the country. And I learned something from him two weeks ago that I didn't even know.

Which is if you're doing cost segregation reports, you can do what's called a dispo section where like, for example, say you buy this property, right? Well, when you rip the roof off of that thing to redo the roof, say the roof is 40 grand, whatever it is, you can depreciate that $40,000 roof, even though you're ripping it off and throwing it in the dumpster. And then next year,

to appreciate the roof that you just put on. Really? I didn't know that. I had no idea. I didn't know that at all. So as you're going into this project, you might want to have a cost segregation guy look at it first and say, I want to get dispo. I want to get dispo advantage on everything we rip off. That's really good. It was wild. Yeah. I had no idea. I didn't know that either. Nobody in the room did. Everybody was like, what the fuck are you talking about? And yeah, nobody knew. It was crazy. People were like,

Really? People need to know that. Dude, it was wild. Yeah. No idea that you could do that. But yes, that's absolutely in Zach's code. It's absolutely... Like I said, this guy's the best guy. He's the best guy. Phenomenal. Well, dude, really impressive. Thank you, man. Really impressive. If anybody wants to get in touch with you and maybe... I mean, look, I'm not going to say bend your ear because don't blow this dude up with like, I want you to mentor me. What's going on? Like, look, he's...

I'm sure he'll help you, but don't blow him up with a bunch of nonsense. It's crazy. More or less, if you've got a deal or want to do deals or you have capital, want to do business. Like, look, let's talk about that.

You got a guy like this. You want to get, you want to learn how to do this, bring some money to the table with this guy, bring a deal to the table with this guy and partner with him on a deal. You guys do that. Yeah. Yeah. That's, um, that's actually how I, I, one of my, um, really good guys, he's, he's actually here on this trip with me is he lent like 50 grand on a deal, right? He's like, Hey, just want to like, you know, do this with you. Like, you know, get to know you, whatever. So let the money on a deal. Then he brought like a few other deals and I told him they suck.

And then he kept bringing me deals and he finally got like some good ones. I was like, Oh yeah, man. Like I'll partner with you on these. Like, you know, like we just hear the terms. Um, and then now he's like, you know, just, we're basically just full time, you know, working together. Um, and it's, and it's great. I have other people like that too. Dude, I'm telling you that is the, and people look at this the wrong way. They look at situations like

that where they're like, oh, but I don't want to give up profits, blah, blah. Dude, you're getting an education for free and you're actually making money. You're making money to get an education. Absolutely. So that's how you have got to look at it. And you're providing value to whoever you're bringing that deal to, you know, because they wouldn't have otherwise had that deal, right?

You know, so they're making that money. They're happy. I mean, I feel free to bring me deals. Yeah. Bring them deals. All right. So what's your Instagram? How they find you? So best way to get ahold of me. I'm very active Instagram, Facebook, just at Camerati homes. My last name. You can also look up Donovan Camerati. I should come up.

So, and that's C-A-M-A-R-O-T-T-I. There you go. Love it, man. Well, dude, I want you to come back in a year. I wonder how much more you've scaled and where you're growing into and watch your journey. Super impressive for 21 years old, man. Thank you, man. I really appreciate that. Good job, dude. Congratulations. Good job. Thank you. All right. Well, look, dude, if you listen to this today and you're sitting there thinking, man, I'm drifting along with the currents of life. I'm too old. I'm too young. I'm too whatever. This, nobody is too anything.

to start doing what you want to do. We'll see you next week.

What's up, everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it, or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escapingthedrift.com. You can join our mailing list. But do me a favor, if you wouldn't mind, throw up that five-star review, give us a share, do something, man. We're here for you. Hopefully, you'll be here for us. But anyway, in the meantime, we will see you at the next episode.