Brant Phillips – Navigating The Realities of Residential Real Estate Investing

And was determined to just walk away from the deal.

So we came in, looked at her budget, looked at her numbers. Assessed the renovation where it was at that point in progress. And we were able to come in, advise her on that deal. She actually, in that point in time, with the contractor, what we recommended to her was to renegotiate, re-contact her contractor first to work things out, communicate.

And go over, and first seek to work things out with that original contractor, rather than file a lien and go through that process. And she actually was able to do that. There was some misunderstanding, communication on both sides. Worked it out with them. Got the house listed and walked away with a really nice profit.

And so sometimes, that’s our role, taking another perspective. Looking at it with a business perspective and talking them off the cliff, so to speak. And that was a great example, where we weren’t even looking to do the construction work on her project. We just wanted to analyze it and see what needed to be done. And she, to her credit, took those steps and walked away with a nice profit.

Jack: Well, I think that right there is a perfect example. It’s a spotlight on the fact that you’re an advisor. You had this advisor capacity, similar to the financial advisor that I talked about. And rather than making decisions or guiding a customer that’s going to be the most profitable for you, you go for what’s the best outcome for those customers’ success.

Brant:         Uh-hmm.

Jack:          Now, there’s a lot of people that watch the shows, the reality shows. And they see that and they think that real estate investing means walking through dirty, nasty houses, swinging sledgehammers, knocking down walls. And that they have to get involved with the actual construction of this.

How many of your clients are walking through the houses with you, knocking out walls with sledgehammers and carrying paint brushes?

Brant:         You know, I get that a lot, as well. And we got that a couple of times this week, where people told me, you know, they’ve always to flip a house. They always wanted to get into real estate investing. But they didn’t know how to do construction. They didn’t know how to paint or they didn’t know how to put down tile.

And I think that’s one of the biggest misconceptions. We personally, as a company, won’t take on a project if that homeowner or that investor is going to be affiliated with doing some of the renovation aspects of the job, because I’ve learned that the hard way, too.

My first couple of projects, I wanted to have a hand in it because I thought that’s what I needed to do. You know, you see that on those shows. It didn’t take me very long to realize, one, that I wasn’t very good at actually doing many or the jobs that are required to get a job done.

And I was slowing down the project. I was very clearly costing myself time and money. Time on the renovation, as well as money on the renovation, where I’d set a project back 20 or 30 days. And you add up mortgage payments and insurance and taxes and just not being able to put your house on the market, it adds up really quickly.

So that’s another big one, where people say, well, I have a full-time job. I don’t have time to do this or do that. And that’s one of our, that’s why we’re in the marketplace. And that’s the void that we fill is that we come in and fill that void where you don’t need to do anything.

We actually have a lot of clients that don’t live in this state. We’ve worked with out-of-country investors. They’re investing from other countries or they travel a lot. So we use a lot of cloud-based management software and pictures and videos and things like that.

Those, in my book, are the wisest investors where, if you look at the shows and we’re talking about is it really like that? It’s not. It is for some who want to choose the hard way, so to speak. And then we’ve got other investors who come in like this is the deal I have. I want you to do everything and so what you do. And they come back at the end of the project. They might check in once or twice and then they’re getting it ready to list or sell.

And for them, it’s actually much easier than the shows are. They leave it to our company and our project managers to deal with the headaches, the nuts and bolts of the construction side. And they focus on finding more deals or raising money and just working on their business, rather than in the business.

Jack:          They sound like they stay out of their own way. It’s probably the most profitable thing for them to do.

Brant:         Yeah. Absolutely.

Jack:          Well, clearly I think what you do is changing the way that people think about investing in real estate. You wipe out those obstacles of, one, how much money they need to do this, how much time they need to be involved, and how much knowledge about construction that they need to have. And I think that’s where the success is.

You give people a tremendous sense of confidence. And it’s definitely earned confidence, because you have such a track record of people that want to work with you, not because you have the cheapest paint or you have the cheapest carpet or any of that stuff.