Changing Strategies in a Changing Market - Episode 70

Podcast Transcription

Andrew: And we just started this…

Oscar: Yeah, here we go.

Melina: I'll let you open. I'm just gonna...

Oscar: …let Andrew open? What up, Andrew?

Melina: Welcome to "Flippin’ Off," a purpose-driven podcast about flipping houses and making a difference.

Melina: All right. Hey, everybody. Melina Boswell here, co-founder of New Wealth Advisors Club. And today in the studio I have Mr. Tim John Wilkinson.

Tim: Hi, again.

Melina: Hey there. We meet again.

Tim: We just did this, remember?

Melina: Oh.

Tim: Two weeks ago.

Man: We're back.

Melina: We... Frank Luna.

Frank: Hello everybody. Good morning. Good afternoon. And goodnight.

Melina: Oscar Solares.

Oscar: Hey there.

Melina: And Mr. Andrew Boswell.

Andrew: How's it going?

Melina: All right. And then in the background we have "Spoon."

Spoon: Hey.

Melina: Yeah. And we have David and Kendra Boswell.

Kendra: Hey, hey.

Melina: And we have Samson Boswell in the house too, our buddy Sam. The little old man. All right. So today we thought it would be a great time to talk about "Changing strategies in a changing market." I have a feeling that's gonna be the name of this one. But, let's... So, Oscar, go.

Oscar: So "Changing strategy in a changing market." I think the big thing that people need to understand is that you need to be prepared and equipped for whatever the market brings you, right? Meaning, every market is going to shift at some point. It's always gonna be in a state of flux, it's gonna change. So you need to have the skill set and the tool belt ready to go, so that regardless what the market does, you step in and you attack the market versus sitting back trying to figure it out. So with that said, what we've taken on is a few different things. We're doing some more buy and holds. We're taking ownership of properties. We're looking at doing some building. There's a lot of things that's going on right now, right? That we wouldn't have done 5 years ago, 10 years ago. So it's a big shift for us. And, you know, we talked earlier, in other podcasts, about Airbnbs. We've talked about the short-term versus the long-term rentals. And now we're venturing into some other ideas.

Melina: Yeah. So, let's talk a little bit about that. That was a great...That was really good the way you just did that by the way. It's like you know what you're doing.

Oscar: I work best when I'm on the spot.

Melina: I know. I like it. It's awesome. Just so everybody knows, this is how we roll. We say, "What are we gonna talk about?" "I don't know." These are the real conversations that we have day in and day out. And so, you guys just get to listen to us. And there is some teasing. Yeah. Yeah. So, let's talk a little bit about... I feel like we should have maybe an update on Airbnbs. So, maybe we talk a tad bit about that. Maybe, Tim, you wanna talk about how we love Airbnbs?

Tim: Do we?

Melina: Yeah. I don't know. Do we?

Tim: I like it. I like Airbnbs. I like them mainly because it opens up opportunity for us to buy properties differently than we normally would. If we're looking at a property from straight rent, you know, you can go and... The rent for a particular property might be, you know, $1,200, $1,500, $2,000 dollars a month. But when you break it down by night,... Obviously, I mean, there's a reason why the Hiltons have all their money. So...

Melina: True.

Woman: True.

Man: True.

Tim: So it enables us to play, you know, the Hiltons, on a smaller scale. And we get to, like, really turn a property that may not make sense at all, into an opportunity that anybody can do.

Melina: Yeah. So, you have the property...well, we have the property, Downtown Riverside. And so, we've been short-term rental for, I don't know, seven or eight months, something like that, right?

Tim: Right.

Melina: Yeah. That's really funny. And so, it's turned out that it's been a wonderful opportunity for us. It's lent all kinds of awesome things for us. And we've learned a lot, right? So, and one of the best things is how we teach. We teach from what we learn, by what we...

Oscar: Actually do.

Melina: ...do. Bring it back to the club members and share, "Hey, do this. Don't do this.

Andrew: After you guinea pig it.

Melina: After I guinea pig it. Thank you very much, Andrew. So, I just was thinking... I know everybody really loves hearing the stories of the Airbnb, but there's like two specific things that have happened recently. So, we got a... Spoon sent a picture to us, of the backyard. Of 10th Street. And...

Tim: I was like, "Is that our backyard? No. Don't we have a fence?

Melina: Why don't you describe what that picture was? Of the backyard.

Tim: Some guy chilling on a couch in our backyard, that wasn't there the day before. Apparently he moved it in.

Andrew: I know he didn't, but like over the fence by himself. And let's be real, the fence isn't short, you know. It's not like it's a little knee-high fence. That dude threw the couch over the fence by himself. I'm impressed.

Melina: What else was there?

Oscar: He actually put a plank that was ground-up in an angle against the fence.

Melina: Oh, is that what he did?

Oscar: So, he actually slid stuff down the plank.

Andrew: That is so brilliant. Do you know what I'm saying?

Oscar: That's like frickin’ genius. "I don't need to throw it and damage my couch as I go in the backyard. I need to slide this puppy in so that I can still use it." But he actually set it up in a way that he had the couch... There was a rug. There was a nightstand-coffee table thing going on.

Tim: Like an outdoor…

Oscar: He had another coffee table hanging on the fence like he was just getting it over there.

Andrew: He had rigged up some sheet metal and made himself a nice little shade underneath the tree. He had a full...

Oscar: Fire pit.

Andrew: Fire pit. There was actually...there was pans also. There was pans that were sitting there.

Oscar: The only thing missing was like a rim with some charcoal briquettes on. He'd have been on it.

Andrew: I'm surprised there wasn't a TV and TV stand in there.

Melina: Right. Right. And that was like in one day?

Andrew: I think so. Yeah. It was quick.

Melina: He did that in one day. Yeah. So...

Oscar: And the interesting thing is that that picture was actually sent through...I believe it was sent to Adrianna from one of our guests.

Melina: That's right.

Andrew: Yeah. Because this was...Well, we didn't have a camera angle over there at this…

Oscar: So the guest was like, "You know, I was just worried that...I was just hoping that he was still alive.

Man: That was just one of the rules of renting your Airbnb, is paying $40 a night, right?

Andrew: Yeah…cheap.

Oscar: 40 bucks a night for the campsite.

Tim: It's a hipcamp.

Melina: A hipcamp. Oh, I like it. I like it.

Tim: It's a whole new business model.

Melina: Right. So we are getting ready to build the second house on that property. So, that has a lot to do with why maybe, you know, we have this vacant...It's a nice sized lot. So, we're getting ready to break ground. We've got everything in...

Oscar: It's in the final stages with planning at the city. The Heritage Board loves us and asked if we're gonna do more. So, obviously we did, and we bought another lot.

Melina: Yeah. So, why don't we talk about that? How did that happen?

Tim: That was an interesting one. We had been looking at the lot... There's two lots adjacent and right behind our property. And we've looked at it. And here's the truth, the truth is we dropped the ball. Because we looked at those lots and we said, "Hey, we should track down the owner." We went so far as finding the owner in Arizona, and then, for whatever reason we dropped the ball. And that was months ago. And then because we are in the market and we tell people what we do, all of a sudden I got a phone call from this guy. He says, "Hey, I got this lead on a lot. Would you mind looking at it for me and helping me decide, like, what should I offer?" And usually, you know, new changes, like, the whole purpose of this podcast is to talk about new strategies in a changing market. Because usually I'd have been like, "It's a lot. I'm not interested." But now, we're looking at things a little differently. And so I looked at it and I'm like, "Oh my God, that's our lot." So, I told him, "The homeowner doesn't want...he hasn't told you what he wanted?" He said, "Well, he wants $75,000 for it." I said, "Go back to him and tell him that we typically will buy on the tax assessed value, which was $26,000, and see where he comes back. But if you get it at $50,000, I'll give you $55,000," is what I told the whole seller. And he went back. He came back and told me, "You know, I got it at $54,000. Would you mind going to $57,000?" And I said, "Well, we'll take it at $57,000."

Melina: So, it's interesting because, you know, in general, we know that the market is beginning to correct when the builders start building. So, that isn't what we're doing, right?

Man: Right.

Melina: We wouldn't be buying an empty lot to build, just to turn around and sell the property. Unless we can just get it at exactly the right price.

Oscar: Right. And in this case it's actually two things, right? We got it at the right price, and, we're not intending to build, to actually just sell it.

There's a different strategy. And we definitely went down the path of, "Oh, maybe it's another Airbnb." And then, something that's, kind of, near and dear to my heart is being a veteran. It's the whole veteran thing. And what does that look like? So we've been looking into that whole aspect for a long time. And it just so coincidentally happens that we get a phone call...or you get a phone call, right, Tim?

Tim: Right.

Oscar: Saying, "Hey, I have this property lead that I'm interested in looking at because I want to do something for vets. Like Kerry. Which was her intention of, "I wanna get this property under contract so that I can house vets." So then, he tells me, I speak with Andrew. And then a bunch of things start happening. So that shifts the thought process now, right? Because there's the Airbnb. But, man, our core is, "How do we serve others? How do we deliver something that makes sense? That's impactful. That does things." Right? And then, coincidentally, as it would be, we have Locust, which is the lot. Frank has a property in Jurupa/Riverside, that we can build on as well. And there's other opportunities that are showing up. So now it's, "Well, what do we really do? Which direction do we take this in?"

Melina: Yeah. So, we've been throwing this around for a while. And again, this is how you know that you're in the right place at the right time. Is when you can do whatever you wanna do. It's been a very exciting time, from my perspective. Because, first of all, I love doing creative things. I love doing new things, opening up opportunities. And then, clearly, you know, vets, and being able to provide a space for them, is something that is absolutely on mission for us. Yeah. And we've talked about, if we do provide housing for veterans, how do we, you know, what do we really wanna create for them? Right? And going maybe above and beyond, and creating something that is really nice and honoring to them. And so this is opening up that opportunity for us. So, why don't you talk a little bit about the property in... Maybe you should talk about Lindsay a little bit. Or the property in Jurupa, maybe.

Tim: Choose Lindsay.

Oscar: Why are you looking at me. Well that fell.

Melina: Everybody looked around.

Oscar: So Lindsay is a property that Frank has...

Christian: Hi. This is Christian Rios. As many of you know, I have been a member of New Wealth Advisors Club for over 7 years and got started when I was 17 years old with absolutely no real estate experience. One of the biggest lessons I have learned from being in the industry is the need for authentic relationships. If you're looking for an actual team, locally, in Southern California with all the resources needed to close deals, register for one of our free workshops by visiting www.joinnwac.com. Thanks for listening to the "Flippin’ Off Podcast."

Oscar: Well that fell.

Melina: Everybody looked around.

Oscar: So Lindsay is a property that Frank has that actually is two and a half acres, right?

Frank: Mm-hmm.

Oscar: That looks like... Well, there's two houses on it currently. Total of eight bedrooms combined. So, it's a decent sized structure. But the more important thing is that we can actually build...I think it's up to 10 units. Right, Frank?

Frank: Ten. Yup.

Oscar: So, now it's a matter of, "How do we best use those 10 units." So I'll let you, kind of, talk through the whole Lindsay...

Frank: Okay. So, when we first got this property, we were looking at just flipping it, being done. And, there's some weird things that happened with title that shouldn't have happened. Which coincidentally, or not so coincidentally, put us in a position where we have this property, where we had to go through clean up title, you know, find out why they didn't include the other one and a half acres in the sale. And by the time all that was said and done, there... We have this opportunity to actually house the VA. So, it was perfect timing. I mean, what looked like just a big ol mess in the title and everything. I was like, "Hey, well Frank still is dealing with this property, getting title done. He's about to finish the rehab and make sure that..." And, you know, we were thinking of selling the lot separately and then that was gonna take time. But it just all worked out perfectly when... To me it just seemed like everything was going wrong with this property. And, you know, just perfect timing, that this opportunity came up, and we have this perfect property for, you know, it's got eight units. It's a duplex. It's got, you know, a six bedroom in the front. It's got two in the back. And it's a good thousand square feet. So, all the different scenarios of, "Do we divide the lawn and sell them separately?" We had multiple people interested into it. It was all so that we could do this.

Melina: Isn't that exciting?

Oscar: Everything that we thought fell apart, right?

Melina: Yeah. Yes.

Oscar: Every approach that we took fell apart. Every aspect of it fell apart. The title stuff, the buyers that were in the queue already, they opened up escrow. They ticked off the city. So the city said, "No, you can't do what you wanna do." And so, then we called the city, and had a conversation with them. And they were like... Well, they were fine. There was no big deal with them. So, it was just...it all fell in place. So.

Tim: It's cool that Frank says it the way he's said it which is, like, yeah, everything was falling apart from his perspective. But it's really cool, as a team, because without either one of us the opportunity is not there. Without, like, any of the five of us that are sitting at this table, plus the rest of our team. Without all of us the opportunity is not there. And, even for somebody outside of this table or outside of our core team, to be able to... Like, Oscar mentioned Kerry. When I talked to Kerry she said, "You know, I really wanna do something creative for veterans. I actually work for a company that houses veterans. And what we need, and we do not have enough of is homeowners, landlords, who are willing to rent into this program, and rent to..." You know. The opportunities are coming from every different angle to make this opportunity perfect, if that makes sense.

Melina: It makes perfect sense. And, yeah, it is interesting to think about that most landlords will not rent to disabled veterans. Because that's really what we're talking about, right?

Oscar: It is. Yeah. It is. And Kerry was telling us that Section 8 housing, which is probably where they would qualify, there's a six to seven year wait. So that's the reason we have so many homeless veterans. A lot of people wanna put the blame on the VA. The VA actually has the programs. And there's a partnership with HUD that provides a certain amount of money for them to have housing. It's just that the housing isn't available.

Melina: Yeah. Yeah. It goes back in line with the idea of us being in the middle of a housing crisis. And that is absolutely where we find ourselves, in a market that is so interesting, right? Because we have a market that is now beginning to correct in the middle of a housing crisis. Isn't that crazy?

Tim: It's kind of strange.

Melina: Yeah. It's very strange. And so... But what we know, for a fact, is that we're still going to continue to have disabled veterans who are in need of housing. That something happens, right? There's something very unique about somebody who has been in the military and then who's been injured, had had an injury, and been, you know, labelled or qualified, I guess, as disabled, and what that looks like to them. And I believe that society, in general...My fear or my feeling is that there isn't a lot of respect and honor that is given to these people. And it's not just men, it's men and women. Right. Which is an entirely new situation that we've never experienced before, or that we've known of. But we have a lot of women coming out of the military that have been qualified as disabled and aren't able to find housing. And I don't understand how we as American citizens find that to be acceptable. It's just not acceptable for us. And so, we are going to do everything we can to house as many of these folks as we can. And it's not just putting a roof over their head, right? It is so much more about giving them honor, and dignity, and beautiful living quarters, and opportunity.

Oscar: Absolutely. I'm in the point now where I want it to be an experience for them. An experience where, yeah, there's some regulations, there's some things that they have to abide by. But ultimately, they get to live their life now versus being told what to do, or not having anything to do. So it's more about opening some doors for them as well.

Melina: Right. Purpose.

Oscar: Absolutely.

Melina: Yeah. For them.

Andrew: It's a balance between freedom and structure, that everybody actually needs. Yeah. I guess for me that's the biggest thing about this or that I'm looking forward to, is that, like even places that they can go and live, I guess, the... I don't know. The consensus almost is that they can live in really crappy conditions, you know, which, I mean, don't get me wrong, that's true. I mean, we've all slept out in the middle of nowhere and not had showers and done all that. And we can do it. But, that's not what these guys need. That's not what these men and women need. I think that for me is the biggest...The coolest part about this is that we all...

Man: Not we all, you mean you military boys. It's not we all.

Andrew: I'm sorry, I'm looking at Oscar here.

Melina: It's only you and Oscar actually. The rest of us are…

Andrew: Well, I mean, that's actually my point though. Is that I want them to experience that same kind of, you know... It is respect. And it's dignity, and it's going home to a nice place and having a good place to lay your head. And they can hang out with each other and fellowship. Because that's the biggest thing too. I mean, this is gonna contribute to so much more than just the homelessness. This is gonna contribute to the mental welfare of all veterans. And this is gonna make a big impact. And that for me is like the...I think that's probably the most exciting part about it. Is that we get to create something that's really, really nice for these people. And I think that's gonna be huge for them. And I think that this is gonna grow into something that's a lot bigger too. And we're gonna make a huge, huge impact with this.

Man: Just hearing that from Andrew, and then hearing Oscar talk about how there's money available but not enough housing. For me, specifically, just, like, as a real estate investor and as somebody who's buying and selling houses all the time, I actually feel a responsibility now to veterans. That we are, like... You know, every year we should be absolutely looking at properties with that in mind. I feel like it's a responsibility that any real estate investor should pick up. Because how else is it gonna happen? If the housing isn't available, how the hell else is it gonna be available? Like, what are we gonna...You know? Something has to get done, right?

Melina: Right? We have to create it.

Oscar: Yeah. Absolutely. You know, Tim and I had the opportunity to meet a former professional athlete that really actually approached us because of a vested interest in wanting to help and support veterans, and homeless veterans specifically. That dovetailed into another business. But, nonetheless, there's things there that... I know we're gonna build some really cool relationships here because of the impact this is gonna have. And Andrew is absolutely right. This is gonna be bigger than most of us can right now imagine.

Melina: Yeah. I know that that's true. You know, I was just thinking, listening to you guys, and marveling at what we...the opportunities that we've been able to walk into as a result of who we are as a club, right? And being so...Like, isn't that just amazing? So on mission.

Andrew: Well, yeah. That's actually one thing I was gonna say to you that I want for everybody listening to take away. Is that the coolest part about this is that, I mean, this is where... Obviously there's a passion here between, I mean, if not just me and Oscar, definitely everyone here. And what's cool about it is that... I guess that's my favorite part about real estate. Is that there's so much opportunity to actually... I mean, it doesn't have to be homeless vets for anybody else, you know? It could be something completely different that real estate provides the opportunity and the vehicle for. And I think that that... I mean, just for me personally, and what we're talking about right now, that's like... Something I want as a takeaway from this is that there is so much ridiculous opportunity and different things that you can do in real estate and still live your core purpose at the same time. And we're serving people and doing everything that we wanna do. And at the same time, I mean, we're sitting here flipping houses, you know. It's fun at the same time as we're doing this. So.

Melina: Yeah. I was just thinking that. It seems to me that that is exactly it. And I just keep on in my mind, over and over, and rolling around in my mind our mission statement, right? So even the name of the podcast, right? Flipping houses and making a difference. New Wealth Advisors Club is a group of people committed to empower and encourage all people to realize their core purpose in life. With this realization we believe everyone can live an inspired life full of enthusiasm, as they in turn inspire others. That's the mission. That's what we get to do.

Man: Boom.

Melina: Boom.

Man: Boom.

Oscar: Mic drop.

Melina: Yeah. So. Anyway, stay tuned. We will continue to update you guys on the journey and on the mission. And we're gonna celebrate wins along the way. I think we need to make a commitment with each other right now, to celebrate all the wins as we go. Like, you guys had a win last week. You know. We have a win with these properties that we're acquiring. We really do.

Man: Well, we closed on Locust yesterday.

Melina: Right. We closed on that yesterday. And so, now we get to start to create something beautiful and wonderful. And I am so so excited to start experiencing that. So, yeah.

Oscar: Stay tuned. Good stuff coming down.

Melina: Yeah. All right. We are NWAC, and we are out.

I'm Melina Boswell, your host of the "Flippin’ Off Podcast." I really hope you enjoyed it. If you did, we'd love for you to subscribe. Give us a five star rating and tell your friends all about us. You can find more episodes of the "Flippin’ Off Podcast," on Apple Podcasts, Spotify, Google Podcasts, Stitcher, or wherever else you like to listen to awesome podcasts like this. If you like which you've heard, we'd really appreciate it if you'd follow us on Facebook and Instagram and tell us the stories that you'd like to hear. Tim Jackson is our senior producer. Luke Jackson is our editor. Brothers. Josh Mauldin is our producer. Sound design by Frequency Factory. Our executive producer is Mind & Mill. This was all created by Dave Boswell for New Wealth Advisors Club.