A successful real estate investor is someone who takes business like it is beach time all the time. In this episode, Jason Bible and Robert Orfino discuss beaches, travel and business, and the advantages of the new residential stickers in Surfside Houston. Be a wise investor. Don’t be a slave to your job and enjoy and reap the benefits from what you are doing as Jason and Rob give their advice on restructuring which can be a plausible way to help you grow your business. The investment progress doesn’t need to happen in one year. Do it right because it is naturally a three-year progress.
Listen to the podcast here:
Beach Time with Guest Co-Host Robert Orfino
The theme of this episode is beach time, time at the beach.
I’ll be down there.
Surfside or Corpus?
Surfside. I was at Corpus.
Did you get your spray?
I have a spray.
Did I tell you I had to give the guys my spray?
Did you leave it there?
Me and a secret weapon were down there and she’s like, “Let me see the rehab.” I was like, “Fine.” We’re walking through the rehab and we sprayed out. All her Airbnbs have got the spray. I said, “That’s funny because Rob just ordered a case of cancer-causing mosquito spray.” It’s a fair trade-off. In any case, we’re down there and I’m chatting with one of the guys on the crew. He said, “You wouldn’t happen to have any bug spray with you?” I was like, “Just take the can, give it to all the guys.“
One of the guys was down there. Literally one of the trades was down there for just a couple of hours to go back. He’s like, “This old boy is getting eaten alive.” I was like, “Here you go, take this. You can spray the whole crew down. You might want to send out a text message to all the boys that it’s bad down here. It is especially bad.” It’s pretty funny. I went to a lunch. I had a phone call with our property manager down there and he said, “If we have to know each other a little better, there’s a Sunday night dinner that a whole bunch of us get together. If you’re ever down here, you might get to get to know some of the locals.” I said, “Okay.”
We’ve got to do that little event we’re going to do.
I told him about that little event and he said, “They’re totally down. They’d do that.” I said, “Good.” The residents’ sticker is for Surfside, I did not know this. He said the biggest advantage of having that sticker on your car is whenever a storm is in and out, they let residents back on the island. I was like, “I didn’t even think about that.” In any case, we’ll have to go down there and get our stickers. We’ll make a big show of it when I get back in town. It’ll be a blast. He already told me that special person.
Are you going to the Redneck Riviera?
It’s called the Redneck Riviera, the Emerald Coast. I’ll tell you what, you have not lived until you’ve been to the Flora-Bama. It’s a bar. I hesitate to use that. It’s more like a giant deck. It’s been hit by so many storms and it sits on the border of Florida and Alabama. It’s called the Flora-Bama. They have weddings out there. When I say bar and deck, if you can imagine a bunch of good old boys that open a bar and then start building a structure on top of the structure, that’s what it looks like. I don’t know how it passes any code. If that thing were to catch on fire, a lot of people are going to die. It’s been hit by so many storms and it’s a total mess. You have not lived life until you’ve been to the Flora-Bama.
I once crashed a wedding in Alabama. It was in a bar. I think we were in Montgomery. We were doing work for Mercedes–Benz and we crashed a wedding on a Saturday night. We were in town working for Mercedes–Benz and we were looking for a place. We walked in and the guy at the bar said, “Are you with the bride or the groom?” I was about to say no and my buddy with me said, “I’m with the bride,” and walked right in. If you’re from Alabama, you’ll know these two people because I can’t imagine there being any other. The woman’s name was Sandy. The guy’s name was Muddy, Sandy and Muddy. I immediately said, “What’s the last name? Bottom?” If you know Sandy and Muddy who got married in Alabama probably about twenty years ago, we crashed that wedding. I felt like this is what it would be like.
Was it a good time?
It was great. I think I still have the matches. It says such and such date, Sandy and Muddy. That is just absolutely awesome. I crashed a wedding in Alabama. We were nervous until the bar opened at 10:00. We just got in for an hour, but it was funny. My buddy always keeps pushing it. He’s doing the whole, “Do you know Sandy’s cousin?” “From Virginia?” He’s like, “We’re from Virginia.”
We do a guys’ trip every year for our Fantasy Football draft in August and I’m missing it in 2019 because we’ve got some other commitments. We crashed a high school reunion one year at a hotel. It got absolutely bananas. It was a big high school reunion. They were the Werewolves ‘87 or ‘96 or something like that. To this day, we will be somewhere with a couple of the guys and someone’s like, “Werewolves.” We learned the fight song. It was just one of those crazy nights and everyone’s like, “I think I remember you.” It was like in Branson or something. I can’t remember where we were at, but maybe it was in Florida. What was so funny as the whole night, “I remember you. We were in chemistry together.”
We just did that. Other than Mercedes-Benz, I have no experience in Alabama.
You’re missing out. I do think they have the absolute best beaches. Don’t get me wrong, California is nice but that water is so cold. Florida is fantastic. I will be walking around. I’ll be riding a bike. I’m taking the bike out there. I’ll probably be riding a bike every day. I always go there and I always watch real estate prices. I’ll be in between Pensacola and Destin. I remember we started going out there in ’08. I remember the real estate prices back in ‘08 and the prices down there have essentially tripled. It’s all vacation homes. It’s right there in Orange Beach. We’re a little bit further east. We have this discussion every year. There’ll be two dozen of us here. “Jason, we need to go buy some real estate here.” I’m like, “No, we wait. We wait when the market crashes and everybody’s freaking out, that’s when we buy. This beautiful house that’s usually $1.5 million, we buy it for $600,000.” The time that you buy is when the market collapses in those little sub-markets.Everywhere you go, you should be re researching the real estate market and spending some time at REIAs with realtors. Click To Tweet
For sure, if you can find the lender.
That’s the trick. You bring up a great point. When I talk to a lot of real estate investors, I’m like, “I’m going to wait until the next crash.” If you can find the money, that’s the trick.
Start relationships now.
With private lenders because a lot of those big banks and mortgages and all will disappear overnight.
We met with two local banks. I think you’ve got the story now if you haven’t pieced it together. We were left at the altar several times by folks that promised us they were going to get the financing on the properties that we wanted. We’ve lost earnest money and more importantly, on these commercial deals, we haven’t found an appraiser less than $2,500. Sometimes these appraisers are $5,000, $10,000. We were looking at a structure down there. I’m thinking, “The appraisal for sure is $10,000 on this.” They left us at the altar and we’ve decided that in the markets we’re going to work, we’re going to meet all the local bankers.
There’s probably three to five in each market that we need to get to then now and then you pick one or two to work with. You don’t do all five and you don’t do one. For sure, you want to have two. I think I met our first one. He’s a good guy. He’s aggressive. They understood exactly what we were doing. They were very pleased with how we were doing it. They’re interested in the technology we use. It was a good meeting. The other meeting is not so good. I don’t care and that’s what bothers me. There’s not a lot that does. I for sure felt like the other person was thinking, “What is this fast–talking Yankee doing in my office?” We’re talking about beaches so we’d like to know what beach you’re going to or do you not go to the beach? Someone just said, “Where’s Destin?”
Destin and Pensacola are right next to each other. The way to describe Destin, if you’re from Houston, is like the Woodlands with a beach. It’s very nice. The problem with Destin is if you are not on that beach by daybreak, it gets absolutely insane. You got to put your blanket down. Pensacola’s a little bit tamer. It’s a lot smaller too. What’s amazing about Pensacola is there are still houses that were impacted by the last storm. That real estate market hasn’t exactly recovered, but I like Pensacola a lot more than Destin. Crab Island is pretty sweet. If you guys want to see something cool, Google Crab Island, pick 4th of July and see what that looks like. We’ll rent a boat for a day. I’ve got to order some stuff. Captain Cashflow is going to make an appearance.
Captain Cashflow is the captain of the boat for our adventure there. I’ve got to get the Captain Cashflow attire with me. What’s so funny is this is so different than when you used to take vacations as a kid because the first thing I do is I text whoever’s organizing the trip and I’d say, “What’s the address?” Because once he had the address, then you could load it into your Amazon Prime account and just started sending stuff there. I sent a text, “I need to know what the address is.” I already got it. I’m like, “We can start sending stuff to the to the place.”
Somebody said St. Augustine, have you been down there?
I don’t think so.
That’s definitely Florida. Isn’t that where Ponce de Leon landed?
I think so. That’s funny. We’re just going to go to all the famous places where explorers landed.
If I go back to Jersey, I’m like a Manasquan-Sea Girt guy. Have you seen Jersey Shore? It’s the worst, but that’s where I grew up. Easily half of my friends were like the characters on the show. Easily, then you drift away. I worked on that Boardwalk. I did two summers on that boardwalk in New Jersey, but I won’t go back there now. Point Pleasant, I don’t even go to, so it’s like Sea Girt, Manasquan and mostly just walking on the beach or walking on the boardwalk. When I was a little kid, I thought every beach came with a boardwalk. I once went to the beach, I was like, “Where’s the boardwalk? Where is it?” It’s like, “There’s no boardwalk. You just go out in the water.” I’m like, “No, you need a boardwalk. Where’s the cheesesteak? Where can I buy cheesesteak if there’s not a boardwalk here?”
That is exactly what you need in Alabama, a cheesesteak when it’s 106 outside.
I would crush it if I had a cheesesteak place there.
You probably would. That’s the Flora-Bama.
Where do you guys go to the beach? We’re curious. We’re going to talk about how to start investigating the real estate market there, which then makes sure that’s a business trip or at least a partial business trip. Everywhere you go, you should be re researching the real estate market and spending some time at REIAs or with realtors. The beauty of real estate is you can work anywhere you want. You can live there and work in paradise if you choose to. Some places are going to be harder like Southern California.
I was a big fan once of Sanibel Island, which is down outside of Fort Myers. I’d love to be the guy down there flipping condos. It was a little nice paradise. You can do it anywhere. It doesn’t have to be Pasadena. It doesn’t have to be Texas City, even though we do very well in those two cities. When you’re out there this summer and you’re going to the beach with your family, we’re curious what beach you go to, please hit us up on Facebook. It’s always good to analyze that market and understand that, “This might be good for me.” You can just run it on 50%. If you do 50% or 110 days, that’s a quick rule of thumb. “What are they getting tonight?” “$200 a night.” 110 days, they have $22,000. Can you make that property work for a gross of $22,000? If the answer is yes, what are you waiting for?
I will tell you when we go down here, every beach house we go to, they’re booked year-round.
The same family, same house for eight to ten years.Nobody retires in the south and then moves north. Everybody moves south. Click To Tweet
During the winter, they’re booked too. You would be amazed at how many people go to the beach for winter.
Yes, welcome to Ohio.
That’s exactly what it is. It’s in Wisconsin. The folks at Texas are like, “Why would you go to the beach when it’s cold outside?” I’m like, “Because it’s cold up North and they get sick of that nonsense pretty quick.” Let’s do Thanksgiving, Christmas, let’s do a long weekend down at the beach. The folks up North do that all the time. It’s like a classic Facebook thing. Nobody retires in the South and then moves North. Everybody moves South.
They do the one Alaska cruise and that’s it.
They’re like, “It’s cold.” They go on New Zealand, Norwegian, they do that one. They do the New Zealand thing and they go, “It is cold in the rest of the world. It’s beautiful here in these two locales, but it is chilly.” In Alaska, it’s the same, but Alaska during summer is amazing.
We’ve got three wholesale deals. One’s a duplex, the off-market duplex. It probably can gross around $2,100 to $2,200 a month. I think with repairs, you’re at $160,000. It’s a newer construction. It looks pretty good. We got the three-unit, which is from the outside looks like a dog, but inside it’s all been redone. That’s a nice one. There are couple other duplexes, single-family. I think we should pick one up for $85,000 that’ll rent for $1,250, $1,300. We had our first round of a mastermind folks come in and we still got some spots left. We’ll be setting up some one on one time and sitting down and just figuring out what are you trying to do?
I’m flying back early so I can do the dinner.
We’re going to move that. If you’re in the mastermind, we’re going to have a little inaugural dinner and we’ll meet with some of the folks that we respect and we’ll be talking about becoming self-sufficient and getting your million dollars in assets and then figuring out what you want to do from there.
It’s always fun for me to get in a small group like that and when people start asking questions, I can tell what guru they’re listening to based on the language they use. I can tell where they’re getting their information. I’m like, “You must be listening to BiggerPockets.” They’re like, “How did you know that?” I’m like, “Because you’re making this way more complicated.” They start doing two claps or whatever. I’m like, “You’re with this group and you’re with that group.” I hear passive income and I’m like, “You’re with that group. There’s no such thing as passive income.” It’s so funny. Financial freedom, even though none of those people in those groups have any of that.
It’s like, “Let’s back up from all the nonsense vocabulary and all that. What are you trying to do?” That’s what I love. After folks have about three glasses of wine, a couple of beers, I’m like, “What are you trying to do? What are we doing?” They’ll go, “I’m just trying to make $10,000 a month. I’ve got a good little portfolio. I’ve got a couple of million bucks in this IRA and I’m just trying to figure out how to have $5,000 $10,000 a month in real estate.” “Let’s talk about what your liquidity looks like and then where do you want to do it? You can do Airbnb, you can do short–term rentals. You can do all these different things and then put together a little plan then go do it.” I was thinking, when we have our event, the Portfolio Builders Club and like you said, there’ll be ten, twelve people there. We’ll sell four or five, six properties. In the back of my mind, I’m like, “You don’t have to build 100 houses a year house–buying company. You don’t have to flip a house again. You don’t have to wholesale, buy one or two houses.
Buy ten. Ten’s good enough.
Each year, 50 at the end of five years. What else do you need? Sell off 30, have twenty free and clear. That’s an excellent plan. There’s nothing sexy about it, go ahead and do it.
You can go on Facebook and take pictures of bags of cash.
If you don’t have a bag of cash, we have a bag of cash for rent.
We have a bag of cash for rent. I put together a little promo video on the Facebook page. For those of you who are failed real estate gurus, cryptocurrency gurus or wholesalers. I don’t see it much with real estate agents.
The hemp oil business. They for sure need a bag of cash.
The CBD oil people, if you guys need to take pictures of bags of cash, we happen to have a bag of cash for rent. I completely forgot until somebody mentioned on Facebook. It’s actually in a plastic HEB bag. It’s a legit Texas product, not Whataburger. If I have to hear about Whataburger one more time, my Facebook feed has gone from politics, Trump and Obama and whatever nonsense. All of a sudden it turns into Whataburger fest since Whataburger was bought. All of that nonsense aside, it’s actually in an HEB bag. We’ve got an HEB bag. It’s available for you to take pictures of.
While you’re away, one of these is going to be my Texas observations. I’m observing right now.
What just got sold?
There’s an R in there?
That’s why you’re looking at me funny.
I’m listening and I’m like, “I think he put an R in there.”
For all you failed wholesalers, you can rent the bag of cash.
We get a bag of cash every month so don’t worry. Our supplies are not running out.
You’ve got it before we put it in the bank.
You rent it from us versus to put the end of a gun. We don’t want it.
We don’t want any of that. “Jason, I don’t know if this Airbnb thing works.”
It doesn’t work.
I know you need a bag of cash. Why don’t you take a picture right in front of it?
One–month bag of cash is equivalent to probably ten years of your cashflow on a rental property.One month bag of cash is equivalent to ten years of cashflow on a rental property. Click To Tweet
The one–month bag of cash is equivalent to one-year gross rents. That tells you it is a 12X. That tells you how much that thing is kicking out. Speaking of which, Paul calls me and we’re talking about something and he says, “Is it cool if I just take the efficiency and put it on Airbnb?” I’m like, “Do it. $275 at night, I don’t care. Just go.” He’s like, “I’ll just do it.”
Now, I’m freaking out. I have a real sense of urgency.
He just got rented out.
I know and the other one is done, but the appliances aren’t in and I’m like, “Paul, Wednesday.” We’re talking about in real estate, the opportunity is to work wherever you want to work. Most people don’t have the opportunity to work where they want to work. Most people find themselves in places that they are a slave to the job and you can still do that. If you become, “I’m the Third-Ward King.” The Third-Ward King does all the real estate. He doesn’t need to live in Third Ward right. He can live wherever he wants. That’s brilliant too. You can live where you want to, but you can live where you want to and work where you want to in real estate.
The only sexy thing about it is where. The how, the what, the when, it’s all the same. For the record here, we chop down these guys a little bit, try and take them down a little bit because after you get through the ego, you could get the business. That’s the biggest problem for us. “It’s like this guy looks like he’s got something. Let’s go talk to him.” I’ve got to go through the, “I’m crushing it, killing it, put up these units, got this unit going.” I’m like, “I want to talk to you about this property right here.”
I’m never impressed with the resume. There are two guys in the country that are crushing it. One of them is the president, the other one is Sam Zell. No one’s going to press me with a resume at this point. When you get that big, then you’re a great dude. Can we talk about the property here?
Get past all that stuff and talk about the property.
One of the other things I’ve always liked about real estate is as opposed to your job, if you want a raise, you go buy another piece of property. I always thought that was so funny. When I was starting out in real estate and buying rental properties, it was funny. You hear, “The staff, the employees, that company’s down, this is going on. We’re not going to get our bonuses,” or whatever. I was like, “I don’t know, I’m just going to go buy another house. I don’t care.” I hear it’s fun, but I’m just going to buy another house and bring in another $600, $700, $800 a month in cashflow. If you need more, you go buy another one. I don’t want to get into the real estate guru speak, but they are like little money trees. Just go out. If you need more money, go buy a little money tree. I’m not a big fan of the whole thing they say, “It’s like a cash cow. It’s the golden goose.” I’m like, “They’re more like money trees because they grow. There’s just this growth and they’re just out there. They’re just producing these little dollars that come out. Occasionally, you’ve got to go and take care of the tree a little bit.”
Again, the thing is I don’t think you need a guru for that. The one, two, three or four, a lot of guys would figure that stuff out. I do think you need some peer–to–peer sharing. I don’t think you need to be doing the whole guru thing.
They have a coaching program. “You can do it. What’s your why?” You get this guy that’s screaming at you from the front of the room telling you about motivation. If you need to be motivated, you’re not going to make it.
I screamed a few times in front of them. I have to because I was fired up about something.
“If you don’t do this, you’re not going to be successful.” I listened to some of these other programs on here and people start getting all fired up like, “This is the only way.” I’m like, “Really? That sounds like an ultimatum.”
You actually have to care about what these other people and we don’t want to. We don’t. I don’t have time for it. That’s the thing. Most people are just trying to figure out, “I’ve got so much to do this weekend.” It’s not beach time for them. It’s just like, “How do I get through this weekend? Here are these two knuckleheads talking about why I should go buy an Airbnb.”
“Now, I’ve got something else to do.”
That’s the reality of it. We all want financial freedom. We all want generational wealth. We all want 1,200 doors. We all want that. The reality is I didn’t have a good breakfast this morning and now I’m just thinking about, “I’ve got to go eat something right now. I’ve got to get my car washed because I drove through a gazillion bugs and there’s still no food in the house. We were all running around and the houses a mess.” I’m like, “This is so much to do before I even get to my job.” I think that’s what most people go through. To say to you, “Stop and focus on these 100 houses a year business,” is ridiculous. I think the folks that you attracted in the past were already doing something and just needed to tweak. I know you and Tom, I wish I found you guys years ago.
We got that all the time.
They had found something else and went through the one year and then the two years, throw it all away. Three-year, five-year and now this is a job.
It was heartbreaking to see because we were what I like to call the lost puppy department for real estate investors. We just got this puppy put on our doorstep with sad puppy dog eyes like, “I’ve been to this guru and that guru and this guru.” They’re like, “You’re our last stop before we just quit.” You see these families. I ran into a guy at the Redneck Country Club. I’ve seen him a million different places. I’ve talked to him for years and he said, “Jason, I did exactly what you did. I quit my job and do real estate full–time.” I didn‘t have the heart to tell him, “Get your job back. You do not have the skillset to do this. You just don’t.” I just was like, “Great,” and I walked away. His wife has a really good job. They’re financially going to be just fine. I’m just sitting there and I’m like, “You’re not this guy. You’re not an entrepreneur. You’re not a build 100 houses a year or 200 houses a year person. You’re just not that guy and that’s okay. Not everybody is that guy. That’s okay. Just buy a rental property.” If he had done what I told him five years ago, just buy a couple of rental properties a year.
We’ve gotten twos and threes at our lunch. Someone comes and buy those. Don’t get all over-analytical. These are good deals. We’ve already negotiated them down. They’re ready to go. Go and get them. Just come and get them. It’s that simple. Trust me, the $25 or $50 at the door is all and some wholesale fees you’re going to pay. We bring in these properties here and we do this every other month. You can come to have some food and drink some wine and get those one or two properties that could start changing your life.
I’ve just pulled them up on MLS. I shot them over to the gals.
We’re going to go hard on them. Linda found another one. It’s all good. It’s all good.
There are plenty of deals out there.
It’s six years for you and it’s been about nine years for me. These three–year cycles shifting our business, moving around a little bit and we’re going through this portfolio restructuring. We’ll talk a little about that next time. It’s the same thing. We’re in the same place as everyone else. If there’s one difference between us and everyone else is I will tell you straight up, I’m no different than you. I went through two business cycles. I’m on my third business cycle and we’re just trying to figure it out, but each cycle is the same. Maybe the next one we will move up until we create a REIT. That’s another three-year cycle.
I don’t know. When I hear REIT, I hear work. That sounds like a lot of work. We can hire somebody to help us with that.
That will be the natural extension from what we’re doing here because all of a sudden now we’re building this machine. We build the hog and it’s got to be fed.
That’s one thing I’ve noticed. We’ve got a little machine that is churning it out.
It’s got to be fed. It eats two things. It eats houses and it eats money. It’s got to get fed. You’ll get to that point, even if you’re buying one or two, you’re going to have your ten, twelve, you’re going to sit back and you think, “This is good. I worked with Fannie and now I’m looking for non-QMs.” You’re going to have all these challenges. You’re going to do the restructuring because that’s what you do and you keep growing. It doesn’t have to happen in year one, because it is a natural three-year progress.
One of the things I think you say that’s an absolute genius is people overestimate what they can do in a year and they underestimate what they can do at five years. I was having this conversation with somebody when I was an LA. I’m like, “I get you’ve got these crazy one-year goals, but let’s stretch it out to three to five. Let’s give it a little breathing room and you’ll be amazed at what you can accomplish in three to five. Let’s not get disappointed with what you accomplish in a year.” If you guys want to be a part of our group or want to come out to any of our events, send us a text message at (281) 401-9008.