How Do We Want To Get Paid? - Episode 69

Podcast Transcription

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

Melina: Well, hello everybody out there. Molina Boswell here, co-founder of New Wealth Advisors Club, and today I have special guests in the studio with me, my son, David Boswell.

David: Hello.

Melina: And my other son, Andrew Boswell.

Andrew: Hello. Hello.

Melina: And also Mr. Tim Wilkinson.

Tim: Hi.

Melina: Yeah. So, I call the boys my dragons, so got my dragons in the studio, which is awesome. So, today we thought we would share maybe just a little bit of what we're doing in our own personal real estate flipping business, in our own business, and maybe how I'm doing things that I've been telling people not to do. Tim pointed out to me how I have created rules, I guess, inside of the club, inside of our training. Not rules necessarily, but we have, I don't know, dos and don'ts, I suppose, because our training is set up to put people into action and to actually become real estate investors. And so what I teach people to do is stay in the lane that I know is going to produce fruit for them. And so, then I also say, you know, stay away from these things because there's things that are pitfalls and distractions. And one of those is...and how do I know their pitfalls and distractions? Because I've walked the walk.

And so, one of the things I've told people to stay away from is mobile homes. It's been one of my, like, "Stay...don't do this," And I've done this with lots of other strategies and things I tell people don't do them. And then, you know, as the market shifts, our strategies have to shift. And so, I will not change my training or my perspective on a specific strategy unless I've been able to prove the opposite myself. I'm a big believer in doing and then teaching. That's actually why I think our training is so powerful. It's because it's very practical. And so, going back to mobile homes, I find myself in a mobile home park, and I've...and so, Tim, why do we tell people to stay away from mobile homes?

Tim: We tell people to stay away from mobile homes for a lot of different reasons, partly I think because people tend to see the lower price point as a deal, and it doesn't necessarily mean it's a deal. On top of that, I believe buying in mobile home parks is kinda, like, buying in a homeowners' association only like on steroids because there's all kinds of different rules. You may or may not be able to have renters, things of that nature, inside of a mobile home park. So, there's a lot to mobile home parks, and if you're not "buying the mobile home park," for those of you on the radio," if you're not buying the mobile home park then. you know, buying a $10,000 trailer with a $1,200 a month space rent may not be the best option for you. So, from a newbie's perspective, we tend to tell people just kind of stay away.

Melina: Right. And in general, mobile homes depreciate in value.

Tim: Right.

Melina: That's the other thing, you know, and we've been in a market, we've been in a seller's market, a hot seller's market, which means we've had, you know, get in, get out, get paid as quickly as we can because that's the correct strategy when you are in an upticky market. And as we begin to see the market correct and we're a little flat and I believe we are headed into the downturn, I try to be ahead of the market and I'm very conservative in my own personal investing strategies, so I tend to be...you know, I put the brakes on much, much sooner. So, I've been concerned about the velocity of the market, how quickly it's been going up. It's obvious that the market is going to correct and declined because that's what it does, right? The fact that the market goes up and down is how we make money. And so, the trick is always to be ahead of the curve. And so, as I'm watching the market shift, we start, you know, rethinking and re-analyzing our strategies.

And so, one of the things that I have always wanted to do is have a beach house, right? So, I raised my kids, you know, Southern California and we spent summers at Huntington Beach, so much time down in Huntington Beach and we really love it down there. So, there was this idea that I would...Well, we just wanted to have a place to get away. So, well, I started making some moves, and I found a mobile home right on PCH, which is, you know, a great thing to do. And we've been renting there for a while, and I do what I teach people to do, which is I make sure that I introduce myself to everybody I can, and I let everybody know what I do, that I am a real estate investor and that I'm always looking for houses to buy. So, that being said, we came across an opportunity in the park to buy a mobile home. So I brought it to David and said, "Hey," And he said, "What? I thought we don't do mobile homes." So, you want to talk a little bit about what your experience was with that, David?

David: Yeah. Well, I think my first question was how much?

Melina: Yeah. Should we tell people how much?

David: Well, what did he say originally? How much?

Melina: Oh, $95,000.

David: $95,000.

Melina: Yeah.

David: Yeah. And Spoon and I were sitting there, and I think you texted us.

Melina: I did.

David: Well, we started renting originally. What was your intention renting? Like why were you comfortable just renting?

Melina: Yeah. Mainly because I wanted a place that was reasonable in price. This is gonna be a second home for us, sort of a vacation home. So, I want something...we don't need a mansion. We don't need a million dollar mansion on the beach. My thing is, I wanna be close to the ocean, and I actually said I just need a door and a bed, frankly. As long as I can be close to the ocean, I don't really care. I don't need...yeah.

David: We looked to buy something, right? That almost wasn't an option, right? Did you look around and...?

Melina: Yeah. I looked, but it's just...yeah. We could, but it just didn't make sense to do, right. Not for us in our time right now.

David: Right. Well, and also, I mean we just mentioned that the market is shifting. So, I think five years from now is probably a better time to buy a house on the beach than today.

Melina: Absolutely. Yeah. And we're planting, you know, seeds and making moves to start doing that right now.

David: Yeah. I remember you said that you were okay because when you...You basically just said you were renting a beach house, like, you pretty much texted us, you know, before we were even looking at possibly buying one, she said, "I'm getting a beach house," and actually sent pictures of paperwork and...

Melina: Yeah. I guess that is how I roll, don't I?

David: So, for me, you were renting, you know, we were renting, which renting automatically, to me, just seems like throwing money into a pot or just into the fire pit, you know. So...

Melina: Who taught you that?

David: Yeah. Right. Well, which is kind of why I was a little bit curious as to why, you know...for me it was strange, but I realized quickly I think what resonated was if you don't get down there for us, you know, we want it to be there, you wanted to be there, and we were gonna be there one way or the other. So, you know, for us to just kind of move into a renting position and you just said we'll get down there, and we'll find something, and then we'll start talking to people, we'll figure it out, and then we'll get our opportunity to buy. And when you said that, I anticipated something like, I don't know, maybe a year down the road or a couple of years down the road, we would have to build a bunch of relationships. And turns out you just have to tell a couple people around you. So, next thing we know, what was it, $95,000?

Melina: Yeah. And it was not even 30 days. Yeah. So, what happened was, I went away alone. The reason that I was sending pictures and made the decision is because I decided at the beginning of the year that I wanted to just go be alone. And so, I went to the beach by myself and I spent a few days alone, and it was during that time that I realized I really do need a place down at the beach. And so, I just made the decision that I'm gonna go find one. And so, I don't even know if I told you guys I was gonna go find one. I think maybe I said I'm gonna rent this place. And once I made the decision, I found it that same day, and it's what I do, shoot, ready, aim, and...

David: Tell them about our neighbor, about our next door neighbor.

Melina: Yeah. Yeah. So, yeah. First day, I think, I got there, met the neighbor and, you know, he flips houses. So, it was just cool to build the relationship, and I just started talking to people that are my neighbors, and within three weeks I got...Somebody showed up at my house one day and said, "Hey, this place is gonna be coming up for sale, and it's not listed, and it's not on the market." So, all the things that I had already, you know, let people know I'm looking for, I let people know I'm a cash buyer, and I will absolutely perform. It's what I do. And so, yeah.

David: If the price is right.

Melina: If the price is right, absolutely.

David: I think when you first started...What's his name? Mike? When we first started talking to Mike, and we found out how much he got his place for, I think when we started talking about the numbers, we realized quickly that just because it was a mobile home, it doesn't mean that there's not a lot of opportunity, and obviously, that has a lot to do with the location or everything to do with the location.

Melina: Everything to do with the location for sure.

David: Do we want to talk about prices? Can we say numbers on here? Do we...?

Melina: Yeah.

Tim: I don't think there's a problem with prices. People need even know that we know how to get prices of their properties at a discount I think.

Melina: Right, right.

David: So, well, the...

Christian: Hi, this is Christian Rios. As many of you know, I had 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've 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.

Tim: People need to know that we know how to get prices of their properties at a discount.

Melina: Right, right.

David: So, well, the...What do you think?

Melina: Yeah. Well, I mean, you can just tell him where we ended up. We don't need, you know, negotiation 101. It's an actual class. So, I mean, I don't want to spill all my....

David: Okay. So, when we started talking to Mike about numbers, I realized holy crap, like, there's a lot of opportunity to make money here when you can buy for, you know, these prices. So...

Melina: That's the best thing because as real estate investors, what we do is we're always on the look. You know, we're always looking for a deal always, no matter what, and I tell my students that all the time. You should never, ever, ever be around people and not tell them what you do, ever, on top of being very intentional, right, in where you, you know, choose to be. So, it's a new opening for us, something that we've never done before, so we ended up being able to buy that place for $75,000. And we know we can easily resell it after a week because it's trashed, which is great. It's what we do. Take something ugly, make it pretty. And really, we know when we're done, we could sell it for, I don't know, $160,000

David: The truth is we could...In the condition it's in right now, Andrew and I could clear it out, and we could do just basic work in there and sell it for $100,000, probably as soon as summertime hits.

Melina: Yeah. Go ahead.

Tim: There's also a lot of opportunity right now that we're seeing in...you know, to kind of back up a second, one of the things I was chuckling about over here is that I realized that, you know, recently I've been hearing a lot that the younger age group, you know, millennials that are coming through and they're coming of age to purchase houses, and most of, like, what we're hearing is, and what we're seeing is that millennials don't necessarily want to buy houses. They don't want to buy cars. They'd rather rent a car. There's a whole new business out there where you can rent a car a month to month. So, we have this mindset that is coming around for renters of people that are okay not having "the American dream" and being okay renting.

So, I was just kind of chuckling that you're just right there as far as you're renting, I mean, it just makes sense. I mean, why go buy a $5 million house on the beach that you're gonna be at a couple of days a week maybe when you can rent a place and have your getaway and have everything you want? And on top of that, maybe forge a whole new opportunity inside of what we do, which is educate people on different ways to make money and different ways to be involved in real estate. So, I think about that.

And then when we talk about a $75,000 beach house that we're in the business of making ugly things beautiful, that place is gonna be a beautiful beach house by the time we're done with it. And we're in a perfect market, in a perfect location, like, literally right on the beach for renters. And this particular trailer park allows for...it allows for renters. It allows for potentially short-term renters, Airbnb, things of that nature that we've already talked about as far as, you know, we're doing Airbnb in other locations. Different business models in this market open up the possibility to purchase real estate in a lot of different creative ways in ways that weren't...they didn't really make sense five years ago, at least not for us.

Melina: Totally, that is exactly right. That's the most exciting thing I think for me right now is that's where we're headed. And there is something...you know, it may sound silly, but there is...you do get into a rut, right, of buying a house, you know, and you start fixing it, you know, and then you flip it, and it all starts to just look the same, right? It can become very monotonous. And so, when there's an opportunity for something new like this, it's very exciting. I find myself really reinvigorated and really excited about moving forward with this, which is awesome. So, yeah. So, the beauty is...you asked, well, so what are we gonna do with it, right?

Tim: I did because we don't have an exit strategy.

Melina: We don't even...do we have an exit strategy yet? Nope. Which is brilliant, right? What does that mean, Tim?

Tim: What does it mean that...?

Melina: Yeah, that we don't have to have an exit strategy yet?

Tim: Oh, it means we bought it right. At the end of the day, if we can do whatever we want with it, we're in a position right now where, you know, it could replace the rental you're in, and be a better investment than renting, like, from David's perspective of feeling, like...obviously, David isn't at the same millennial mindset of renting but, you know, just getting rid of that rent and putting yourself in one that you own is a different conversation entirely. So, it works from every angle based on the purchase price, based on the network that we have, based on the...just based on our market as it is right now.

Melina: Yeah. Something that we always teach, you know, you make your money on your buy, right, and you get paid on your exit. So, the question is how do we want to get paid? That's really the only question that's left for us to answer, which is an awesome question to have to answer, which kind of leads into the next podcast that we are gonna record, which is the idea of, you know, changing strategies in a changing market and opportunities inside of a changing market. So, maybe we'll do a follow-up podcast to the Huntington Beach scenario, right?

Tim: In 10 years when we have stopped living there or stop using it.

Melina: Once we've acquired the entire park.

Tim: Yeah. Once we own the park.

Melina: There is something to mobile home parks, obviously, and especially when we find ourselves in a housing crisis like we do right now. And then, of course, whether that's a perceived crisis or it's a real crisis is up for grabs. But there is definitely conversation about a housing crisis that we find ourselves in right now. So mobile homes are something that we've been talking a lot about and considering, right? So...

David: Yeah, that's exciting.

Melina: It is exciting.

David: I'm more excited about this probably than anything else that we're doing, and that's for just the simple fact that...I mean, the situation is we're in a rental right now down, I mean, just a few hundred feet from our newest flip. And so, my brother and I, we're gonna be able to hang out on the beach, longboard over to our flip and, you know, work until we get sick of working, you know, and then have a place to lay our heads right next door, and meanwhile, we're on the beach. It's just, like, incredible. And so, I'm really excited. And the cool thing about this rehab is, you know, we're beachfront, and so it's like anything goes, and. you know, you can get as creative and Pinteresty, and, you know, we're gonna do so much crazy stuff. If I'm being honest, what I think gonna end up happening is, I don't think we'll ever get rid of it.

Tim: That's what I meant when I said 10 years. I think you guys are gonna fall in love with it.

David: Yeah. But at the same time, I think there's a really good opportunity that we'll have it up for short-term rentals so maybe everyone else can experience how cool it's gonna be too, you know.

Melina: He said Pinteresty.

David: Thanks to Spoon. That's a...

Melina: Is that a Spoonism?

David: She always says that. And it's true, there's a lot of cool stuff on Pinterest, actually.

Melina: Interesting. Spoon built a...

David: DIY? Some DIY…

Melina: She built a table. She built a table she saw on Pinterest, which is cool.

David: Pretty cool.

Melina: Andrew, what are you the most excited about? Like, what excites you the most about this Huntington Beach thing?

Andrew: I just think that there's just a lot of opportunity and it's really cool. We get to pick and choose whatever we want to do with it. It is something that can be long-term or, I mean, who knows? The market might...we might have something crazy happen and we sell it for a huge profit too. I don't know where… That's the coolest thing about it.

David: Yeah. It is a beachfront property for 75 grand.

Melina: Yeah. And, you know, it's funny, I was just thinking about this, about it's kind of like the river, right? It's like the river house. This is actually exactly what we did with the river house. I was just now thinking about that, how we bought a mobile home down at the river for...Do you guys know how...? Do you know how much we bought that for?

David: Yeah, 10K.

Melina: Ten grand, yeah. Yeah. We bought that house for $10,000 because I happened to be, you know, out doing what I do in the late afternoon and walked up on a couple having a fight.

Andrew: Snooping.

Melina: Well, they were like outside yelling, and so I just...you know, and then I literally heard him say, you know, "We're gonna sell this place," And he put the for sale by owner sign in the window. So, I was like, "Hi," opportunity knocks. That's what actually happened. And that turned out to be a great investment. So, other people, when they heard that I got that property like I did, so many people came around and we're trying to, you know, "I'll give you 20 grand right now." And I was like, "Bye. No thanks."

David: Ten grand, and then what, put how much into it?

Melina: We kept that place for, let's see, I think we kept it for four or five years and over the time, you know, we completely redid the whole thing. Yeah. And I don't know, I want to guess, and we did all the work ourselves.

David: Thirty grand, maybe?

Melina: Maybe. Yeah, maybe that. And then we...yeah. And then we sold it for, I think, $180,000.

Andrew: Five years later…

Melina: After we used it for five years.

Tim: Enjoying it. I was gonna say plus all the money you saved by not renting somebody else's lake house.

Melina: And actually, you know what? It was in a mobile home park, and we rented it out to snowbirds from New Year's until Easter every year. And the amount they paid us in the rent covered the space rent for the entire year. So, it actually cost us no money. It was a smart deal. So, I'm looking to do something like that again, although I don't know that we'll ever outgrow the beach house like we did the river house. Yeah, we did outgrow the river house. Well. we outgrew it just because we didn't go as often. So, yeah. All right, well, I think we should start talking about changing acquisitions in a changing market next. And for those of you out there, we're gonna give you the TV magic or the show business magic. What do you call it?

Tim: The illusion of Hollywood.

Melina: Which is that we're going to do another podcast another day, but we're not, we're gonna do another podcast in just a few minutes. Don't give away secrets.

Tim: I will have to change my shirt.

Melina: Exactly. Until then, we are the Boswells. We are NWAC. We are out.

Andrew: Bye.

Tim: Bye.

Melina: 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 what 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.