23 Years Old Doing 60+ Deals per Year in NY? Austin & Jake DeRaaff Share How to Break Through in NY

Steve Trang: Everybody. Thank you for joining us for today's episode of real estate disruptors. So today we have Austin and Jake the Raf with Raven three home buyers, and they flew in from White Plains, New York to share how they did 60 transactions in the last twelve months. If this is your first time tuning in, I'm Steve Trang, founder of the Offer Fast Homes app, the only MLS for off market wholesale properties. And I'm on a mission to create 100 millionaires.

One question I get a lot is how do I become one of 100 millionaires? Please allow me to answer it here. The information on this podcast alone is enough to make you become a millionaire in the next five to seven years. Take consistent action and you will become one. When you hear a nugget, type type into the comment section after the show, identify your biggest takeaway and focus on just that for the next seven days.

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That way we can all grow together. You guys ready?

Austin DeRaaff: Yes. Ready. Yes.

Steve: Alright. So first question, what got you guys into real estate?

Austin: So it was crazy. So we're actually only 23 years old. I know we looked younger, but we are 23. Three years ago, we dropped out of school. Parents were like, alright, guys, either going back to school or you're leaving.

So, yeah, we're out. We left the house and then we're at the library one day and I'm sitting in the library. Jay comes over to me. He's like he drops something on my desk. It's and the title of the of the the story was, how to buy real estate with no money, no credit, and no license.

I said, alright. I have none of those three. No money, no credit, no license. And I was reading about it, and it kept bringing up wholesaling. And we got you know, we started to dive digging deep.

It was actually by Cody Sperber. And then since then, we just we we dived in full, full on.

Steve: So it was three years ago.

Jake DeRaaff: Yep. Three years ago. December '17.

Steve: Okay. So you guys were living with your parents?

Austin: Yeah. We were. Yeah.

Steve: Yeah. You guys were going to college?

Jake: We dropped out of school.

Steve: You guys dropped out of school. Yeah. Where were you guys going?

Jake: I was going to Iona College in New Rochelle.

Austin: Uh-huh. And then I was going to school in the city. Yeah.

Steve: Okay. So you guys were majoring in what?

Jake: Business management, whatever that is.

Austin: Finance, but I learned nothing about finance.

Steve: Okay. So you guys were in it. You guys just weren't feeling it.

Austin: Yeah.

Jake: Yeah. We just weren't getting enough value from college.

Steve: And so you guys decided to quit college before you guys figure out what you wanted to do.

Jake: Well, we came home for the summer, and that's when we actually found that course. And, you know, we were looking to get into something because we really didn't wanna go back to school. We were trying to figure out what could we do to create some money in our pocket. You know? So that's when we came into wholesale, and we figured out that we can get into the business without putting any money down, having a license, or having any credit.

Yeah.

Austin: And

Steve: you guys found that in a library, or you guys found it online?

Jake: I bought the Cody Sperber course. $300.

Steve: Okay. So you bought the course. Yeah. And then you you went to Austin. You're like, this is what we're doing.

Jake: I dropped down his desk. I said, look at this.

Austin: We always slip in Simon. We used to flip shoes, flip flip sneaker. At least flip everything. So, like, what's real estate was just more more zeros. So we like

Steve: that. When were you guys doing that? When were you guys flipping, like, shoes and stuff?

Austin: Throughout high school, when we're 12, 13, 14.

Steve: Shoes are you flipping?

Austin: Jordan's. Buy for 100, flip it for 2. It's no difference in real estate. You know? So Yeah.

We we once we found out about this, we just went all in. You know, burn every other bridge.

Jake: You know, we've been hustling our whole lives.

Steve: So there are people that listen to this. I mean, I get people reaching out to me that are 15 years old, and I'm not suggesting this for 15 year olds. But, I mean, they they range in age, you know, as early as 15

Austin: Yep.

Steve: And, you know, as old as whatever. But it's very common to hear someone's like, you know, I'm 19. I don't know what to do. Yeah. What advice would you give that guy?

Jake: I would say first start in your mindset. You know, figure out exactly what you're looking to accomplish, and then figure out exactly who you're hanging around and who you're list listening to.

Steve: Mhmm.

Jake: And then you can kinda, you know, back yourself from that goal to figure out exactly what you're looking to do.

Steve: Well, I mean, when you guys were 20, who were you guys listening to that allowed you to take this leap? Tony Robbins, Grant Cardone. You guys are listening to Tony Robbins at 20 years old?

Austin: Yeah. Yeah.

Steve: Funny. I it's just Yeah.

Jake: That's That's not

Steve: what I was listening to when

Austin: I was

Jake: we went to his, his Unleash the Power Within, June 2017.

Steve: You say that again?

Jake: Unleash the Power Within. To?

Austin: Yeah. Yeah.

Steve: When did you go?

Jake: Yeah. The same that same summer we bought the course.

Steve: Okay. So you guys bought this Cody Sperber course, and then you guys went to Tony Robbins event?

Austin: Yeah. Yeah.

Steve: Alright. That must not have been cheap.

Jake: It was a couple $100 really, honestly. We're sitting all the

Steve: way up to five

Jake: hours. Yeah.

Steve: Also, you guys didn't get to walk through the fire.

Jake: We we did, but we just every get everybody gets to.

Steve: Man. Really?

Austin: Yeah.

Steve: Okay. I guess I gotta go to one of those. Yeah. Okay. So surrounding yourself with the right mindset, I mean, so are you encouraging then these younger guys in college to watch YouTube?

Like, what you recommend for those guys?

Austin: Well, I would say we're trying to get into real estate. The first thing you have to do I know it sounds crazy. You have to make a commitment. Because, like, a lot of people try again in this business, but they have, like, three other backup plans. You have to first burn all every backup plan you have.

And then once you have that full commitment, you kinda figure out the rest. I know it sounds crazy. You go on YouTube, you figure some stuff out, start doing deals. But the first step, I would say, fifteen, fourteen, or even 50 years old, is to first make that commitment.

Steve: Yeah. Yeah. And then, Ryan here says you guys look really young. He's I think he's younger than you guys. So, Ryan, if you're listening right now, stop by the studio.

We'll we'll we'll talk. So, let's talk about then there must have been people in your ear saying A lot. Stay in college. You're throwing your life away. What was that conversation like?

Austin: Yeah. There's a lot of noise, and that's kinda where we left. You know? Even our parents gave us noise. So, unfortunately, we had to abandon them as well.

You know? Really? It's just part of the game because

Steve: that bridge completely?

Austin: Not yet. Not yet. Not completely. Not completely. But, yeah, there's a lot of noise in the beginning.

Friends, family didn't understand. You know, they were very everyone was corporate. So they understood, go to school, get a job, nine to five, make your salary, pay your tax, and that's it. But we just knew there was another option, you know. Mhmm.

Because we grew up always trying to hustle and flip something. So we had to kind of separate ourselves to get to show results. And then once we showed them results, now our dad now works for us. Because once he saw the results, he wants everyone wants to be part of the team,

Steve: you know.

Austin: Yeah. So that's what we

Steve: had to do. Okay. So you guys found this

Austin: course online. Mhmm.

Steve: Yep. Bought it, consumed it, I imagine Oof.

Austin: Quickly.

Steve: Yes. And then what? You guys took massive action? Was there

Jake: Yeah. We took a lot of massive action for eight months. We didn't get our first deal done.

Steve: Eight months.

Jake: Eight months.

Steve: So how is that with your parents watching you saying you guys are dummies Mhmm. And you're taking eight months to do

Austin: your first deal because

Steve: that's that's common. Right? Oh, yeah. But a lot of people are going through this. They're actually trying to get their first deal.

You see some people, like, you know, like, this this is all a scam. Like, they tried. It didn't work. Yeah. So you have pressure from your parents saying, like, you guys are are are throwing your careers away.

Yeah.

Austin: Yeah. That was the toughest part because, like, every every week on the phone with them, talk to them, and not make any money. Obviously, people wanted they wanted us to go back to school. So that was the toughest part, but we just stayed very consistent. And I think the biggest also thing is we knew our goals.

You know, we weren't looking at this as a one day thing or a one year thing. We were looking at it as a five, ten year plan, and we wanted to achieve our goals. So we we we stated we continue to hustle, you know. And the thing that's most people get stuck up on, they give up too early.

Steve: So what does hustling consist of at that time?

Jake: Just, you know, putting in consistent daily efforts consistently day in and day out, and you have to exactly you have to really just figure out exactly what you want. I keep saying that. But if you don't know what you want, then then you don't know how you're gonna get there. If you don't know how you're gonna get there

Steve: What did you want at that age?

Jake: Well, we wanted to get into the fix and flipping business. So we we we we knew that we could wholesale and build up cash flow as a way to get into that business.

Steve: Mhmm.

Jake: So after that eighth month, you know, we did our first deal. We put all the money back into marketing, and, you know, we just consistently, invested in ourselves and invested in our business. Yeah.

Steve: So what were you guys doing? You know, you're talking about taking consistent action. What were you guys doing, you know, every day

Austin: Yeah.

Steve: For those eight months before your first deal?

Austin: We did the wrong consist the thing is we weren't really consistent in the beginning. We were doing so many marketing strategies, Steve, like knocking on doors, bandit signs. But we weren't consistent with each one. Like, we would put out 10 signs, go to 10 lawyers. Dude, like, nothing was really consistent.

I think that was the real reason why we didn't get deals. The moment we actually turned everything off, start with one strategy, are we gonna do beta signs? Let's scale this. Boom. Beta signs work.

Alright. Let's scale coke on. Let's scale door knock. And that's how we started to grow an actual business.

Steve: Yeah.

Austin: The problem is we're doing so many different strategies, and that that was the the moment. No experience. We

Jake: didn't

Austin: we yeah.

Steve: Was anyone coaching you through this?

Austin: In the

Jake: beginning, not really.

Austin: Not really. No.

Steve: Okay. Because I I think that's a good point. You know, for a lot of people that are listening right now is you had all these ideas. There's no shortage of marketing ideas.

Austin: Yep. That's true.

Steve: And so everyone's, like, jumping on all these different things. Mhmm. And you guys said to heck with it. We're We're gonna go all in

Austin: on one.

Steve: Yeah. Exactly. And that's when things

Austin: took off. Exactly.

Steve: Yeah. Okay. So let's talk about your very first deal.

Austin: Abandoned signs. My favorite. My favorite. So, yeah, it was abandoned sign. It was actually a follow-up, which one people who are listening to this, follow-up is really the key.

Like, you're not probably not gonna get them always the first shot. So if you continue to follow-up, I guarantee you will close more deals. With the first transaction, it came through abandoned sign. It was actually a follow-up. I was going through my Google Voice, which I don't use anymore, but I was going through it.

And I was like, hey. I haven't called this girl back. So I ended up calling her. She was actually, hey. I was actually gonna call you.

I was like, alright. Perfect. You know? So we actually ended up meeting at the property, complete hoarder, this this, you know, much of of junk in her house. And, we ended up closing the deal, making about 18,000.

And ever since then, it was, you know, it was lights day and night.

Steve: So out here, if you're putting out banded signs, generally, the kind of calls you're gonna get are from, like, enforcement. Mhmm. Right? Like, hey. You can't be doing this.

Mhmm. I gotta imagine New York, there's gotta be more regulation.

Austin: Yeah. We, we put out so many signs. I think they forgot about it. They just they don't wanna keep keep calling us. We just we won't stop.

You know? We're really consistent, but it goes right to an answering service. So they just say that that the answering service, they really can't get to us. Mhmm. Very hard.

Steve: So they call the band that signs. It goes to, they leave a voice mail, and then you return the calls that you wanna return.

Austin: Yeah. Yeah.

Steve: Okay. So that first deal you guys did, you guys locked it up Mhmm.

Jake: And

Steve: you wholesaled it?

Jake: Yeah. Correct. Who

Steve: did you wholesale it to?

Austin: We actually had a buyer fill out an online web form, like, a $5 website we made. We had no money. So we filled out the form. I call him, hey. You you you're looking to buy in this area?

He actually I had to sell him to to buy the deal because he didn't even know the area. Mhmm. He's, oh, these numbers sound good. So we had to sell him to buy the deal. So

Steve: and then I'm working out. Yeah. I guess some people are saying, you know, Queens is in the house. How far is

Jake: Queens from White Plains?

Austin: Forty

Jake: minutes. Yeah. It's too

Austin: far.

Steve: Gotcha. Alright. So the first deal you did, it was through hustle for follow-up, but it wasn't too challenging, doesn't sound like.

Austin: Wasn't too challenging. No.

Steve: So one thing that was really important to me besides the age component, right, is that I I hear all the time how hard it is to do deals in New York. Mhmm. You know, the number one complaint is that attorneys try to kill deals.

Austin: Yep.

Steve: You want you guys wanna expand on that?

Jake: I mean, we don't really have too many issues with that. We get a lot of contracts signed in person as well. Mhmm. So we do go through attorneys, but, you know, when we put 10 we put down 10% sometimes on an EMD. So the attorneys know that we're legitimate, we're looking to close, or our

Austin: buyer's looking to close. But quick point. So in the beginning, the the problem was, yes. We had some we did some transactions where we had actually had a couple deals where the attorneys tried to steal the deals from us. So

Steve: What do you what is it? Yeah. I was talking about that.

Austin: So, yeah, sometimes you get really good deals. The attorneys have they have a lot of money. They from Manhattan and they're like, hey, I'll buy it myself, you know. Or, hey, I don't recommend you doing that. Or they have another client that'll buy it, you know.

So they have it's very it's it's a little harder out there. So what we started to do was, like you guys are out here, we go right to the sellers now. We have a purchase and sale contract. We have them signed there. Mhmm.

And then if we get roadblock, then we deal with it there. But we don't let the attorneys kill our deals now because we go right to the sellers and get them assigned there.

Steve: Mhmm. What do you mean? Like because my understanding is, you know, we got here. We're we're an escrow state. Right?

Austin: Yeah.

Steve: There's no attorneys here. The fewer attorneys are involved, the better. Mhmm. Exactly. You guys over there, it's an attorney state.

Yeah. So you have to see attorneys.

Jake: You only need an attorney to close

Austin: the deal. Close the deal.

Jake: Not when you're actually signing a contract.

Austin: So once we once we understood that, we don't actually need them to sign a contract. We just run it to the seller.

Steve: So you guys just bring a contract with with you to the seller.

Austin: Yep. Yeah.

Steve: They sign it, and the attorney closes it. And that attorney doesn't screw things up.

Austin: No. Because they're they're on our team. They know.

Steve: We support them. Seems like really common sense.

Austin: Yeah.

Steve: But people still have problems with it. So am I am I missing something, or is there a complaint that maybe I'm It's

Austin: a mindset shift because they think it's a near it's just because it's an attorney state. You need them. You physically only need them at closing. Mhmm. So the sellers are comfortable signing there, which a lot of times they are.

They just want their money at. $2.50, I'll I'll take it. You know? This is,

Jake: you know, it's yeah.

Austin: So once they once you get it signed, we give it a title. Title runs it. We give a couple bucks down in EMD, and then we have a closing attorney represent them at at the closing.

Steve: Yeah. Okay. So you guys might be kinda opening the floodgates in New York, making it sound like it's not as hard as everyone thinks it is.

Austin: It does the challenges. Now we operate

Jake: in a couple different counties. So each county is a little bit different to do business in. So the lower priced homes are easier to do because some of the sales $50,000 homes. You know, it's a no it's a contract. There's no contingencies.

Austin: It's an as is deal.

Steve: They're $50,000 homes in New York.

Jake: In in Orange County. Yeah. Dutchess County. Yep. But then in Westchester County, you're looking at $2.03, $405,100,000 dollars.

Steve: Yeah.

Austin: Yeah.

Steve: And that's the other thing I've heard a lot of. The complaints are that because the price point is so high, it's just hard to to move. What are your thoughts on that?

Austin: Like, move the actual property?

Steve: Like wholesale? To to lock it up and then wholesale.

Austin: Yeah. It shows. Yeah. Sometimes you have to close on them or like you do host hotel them. Mhmm.

But, you know, if you're getting at the right price in a hot market, you can always find an end buyer. Oh, yeah. Yeah. Always wholesale.

Steve: Gotcha. Alright. So Raven three, what what what's what's the idea behind I mean, the three just kinda sticks out there. Raven three home buyers. What's the three mean?

Jake: So our last name is Duraaffe. It's actually a Dutch last name. So in English, Duraaffe means raven. So it's raven three, me, my brother, and my father.

Austin: No mom. No. Forget about the mom.

Steve: Alright. I mean, she doesn't remind you guys that over Thanksgiving or nothing. Alright. So you guys wholesale, flip, wholesale. You're a realtor, and you do short sales.

Jake: Correct.

Steve: What is I mean, you got a lot of things going on. What does that look like?

Jake: Well, we like our whole goal is we wanna monetize every lead to its full capacity. So when we find a lead that we think we can get a good deal at, we look at every deal on its own. So if we think there's not a lot of work and we can get at a good deal, we'll hold tail. We'll we'll close on it, put a little bit of work into it, and get that retail price. If we can get it at a really cheap number and it's vacant, needs a lot of work, we'll wholesale it.

And then we also actively fix and flip when the properties need, you know, $60.70, $80,000 worth of repairs.

Steve: So each property, you look at it and you just kinda examine it.

Austin: Yeah. Exactly. Because we work at two. This is another important thing. Finds, like, good realtors in your area because we have just two realtors in our area.

If a deal comes in, there's no equity. They go to shorts. They have a whole short set apartment, each one of them. And then if it's retail, they go on the retail appointment. So our our lead managers set up retail appointments for our agents.

And then if it's not retail, it goes through acquisitions. So there's always a point being set or some type of transaction be made.

Steve: But you're licensed.

Jake: Yeah. I don't like to list properties. No. I like I like the investing game. Yeah.

Steve: Okay. So how does that like, so you said you have two agents on your team?

Jake: We have yeah. They work very closely with us.

Austin: And different each each county is a different agent that we automatically give the the listings to. And since I'm

Jake: a licensed agent, I get a 50 kickback of any deal we put together with them. So they list the property. They'll kick back my, you know, my realty group 50%.

Steve: Gotcha. What about the short sales?

Austin: Short sales, same thing. So same agents in those So

Steve: the same agents.

Jake: We like to buy a couple once in a while if they're good deals.

Austin: Yeah.

Steve: Okay. Gotcha. So, you know, we talked about 60 transactions last year or in the last twelve months. Yeah. What are, like, the you know, how many wholesales, how many flips, how many hotels?

Austin: The like, majority wise, I would say 70% is gonna hose, fix and flip, and the rest are gonna be either short sales or retail listings. Yeah.

Steve: Yeah.

Austin: We just started to ramp it up. Now we have probably 50 wholesales in the pipeline, another 10 or ten, fifteen buys, and then a lot of a lot of retail listings. So it's way over 60 at at this point. Yeah.

Steve: Really? Yeah. So, yeah, that's one of the things that, you know, when you when you guys are sending over the HUDs. And, I think was I talking to you?

Austin: I think it was me. Yeah.

Steve: I think I was talking to you initially, initially, and I was like, you just I didn't know who you were. I had no idea who you guys were. Yeah.

Austin: I

Steve: was like, just send me some HUDs, and then we'll we'll we'll take it from there. And then you guys did. Yeah. And I was looking at one. It was like, you did a 135 on one of them.

Yeah. Let's let's talk about that deal.

Jake: Which Which deal specifically? I don't know.

Steve: There's one that you did a $135,000 spread on.

Austin: The good thing on New York, we do a lot of big deals. So, you know, majority of our right now, the majority of our wholesales are $3,035,000 dollars plus. Mhmm.

Steve: And then

Austin: if we're not we're not gonna take down a property, unless we're making at least 65,000. Just because, like, we're telling you, it takes time, a lot of construction budget. We just wanna make sure the numbers make sense.

Steve: Yeah.

Austin: So we have set parameters before we actually close in the properties.

Steve: So then let's talk about another way. You said your average wholesale is 30 to 35.

Austin: Yeah.

Steve: And then if you guys are gonna and then imagine different hotel, different number for flip.

Austin: Correct. Yeah.

Steve: So on your, average hotel, like, what do you guys

Jake: Nothing less than 50.

Steve: Nothing less than

Jake: We're doing 6 figure hotels right now too.

Austin: Yeah. Okay. Yeah.

Steve: And then you're gonna flip, then you're going you're going big.

Austin: Yeah. That makes sense. Yeah.

Steve: So let's talk about, you know, your average flip. What does your average flip look like as far as, like, the the the product, you know, the house?

Jake: So what's actually interesting right now is that since I don't know if everybody knows New York City, one of the biggest cities in the world, not a lot people are looking to live in these small apartments anymore. So they're looking to get out and they're looking to get into these counties, Westchester County, Putnam, Rockland, Duchess. Now when we list the property and it's fully fixed up, we're getting, like, 30 showings in one day, 40 showings in one day. We're getting we just got $75,000 over ask on a flip. So, like, at the end of the day, there's What

Steve: was asking price on that one?

Jake: $5.25.

Steve: Yeah. Yeah. 600.

Austin: Yeah.

Steve: Wow.

Jake: We bought it for $2.35. We put $80. Good good realtors.

Austin: Shout out to our realtors.

Jake: Yeah. So, like, we like to take down those big deals and, you know, yeah. So

Steve: Okay. And that's, like, your typical product or that's your

Austin: Typical buy is around 200 to $2.25. Renovation, if we do renovate it, Steve, is probably be, like, 50 to 60,000 renovation. And then the resale is $3.99 and 4 and a quarter. Mhmm. But sometimes closer to the city, you're looking at $5,200,000 resale prices.

Steve: So how close is that to the city?

Austin: Because you're That

Steve: was close. Real close. I've

Austin: been reading, like, I mean, Manhattan.

Steve: It's going through some interesting stuff

Austin: right now.

Steve: Oh,

Austin: yeah. Motivated sellers. Say that. Definitely. Yeah.

Steve: So, I mean, well, I guess, let's talk about that. Like, what are you finding right now as far as the motivated sellers?

Austin: In our market, there's a lot depending on where you are, but we're definitely seeing a lot more. A lot of people can't afford their mortgages. Mhmm. They bought at times where, you know, it wasn't even 2008, 2009, and now they're starting to see the benefits of, you know, paying buying high prices. So and

Jake: we buy a lot of vacant homes as well. So, you know, you know, when a seller has a second home and they're just it's dilapidated and they don't wanna take care of it, we come in, we provide cash, and we close real quick.

Steve: So you guys are forty minutes from Queens. Yeah. How far are you from Manhattan?

Austin: Forty five minutes. Yeah.

Steve: Okay. So it's all right right there.

Austin: Yeah. Right there.

Steve: Okay.

Jake: Yeah.

Steve: But you're not are you dealing with a lot of distressed sellers there? Are you dealing with stressed sellers?

Jake: We don't do we don't do business in the boroughs. Yeah.

Steve: We Okay.

Austin: We stay out of there. Yeah. Yeah.

Steve: Why is that?

Austin: Just a few

Jake: of our found deals. There's a lot of competition. We have a niche in where we are, and, you know, it's our backyard. We lived here our whole lives. So we just understand the market.

We understand every city, every town.

Steve: Yeah.

Austin: A lot of our a lot of our hosted is already presold. Like, we go to a house. We already know who our guy's gonna buy it. So it's like we just it's we're comfortable to have this here. Yeah.

Maybe in the future, we'll branch out there. Probably will. But for right now, we like to stick where we know because we wanna get an r around our marketing.

Steve: Mhmm. Gotcha. Gotcha. Alright. And then I saw something about apartments.

Yeah. What's that about?

Austin: So right now, we own 16 units, two different buildings, both privately financed, and then we have another tenant contract. So our goal is to get a lot of apartment units because, obviously, you know, passive income is the best income.

Steve: It is. You guys aren't worried about that at all right now?

Austin: No. Nope.

Steve: Okay. I mean, the stuff you're buying, are they distressed?

Jake: Yes.

Austin: Yeah.

Steve: And then massive cash flow?

Jake: Yes.

Steve: Gotcha.

Austin: Okay. Tax are high, though. Tax is super high.

Steve: What are taxes like?

Austin: So, like, one building we bought for $6.75, it's nine units and 36,000 in taxes. So we have to reduce those crazy.

Jake: So ARV is about 1,200,000.0, though. So

Steve: How'd you guys find that one?

Austin: It was actually through a property management company referred the the property manager to us. So it was actually through, like, a referral. I don't even know. I we we knew something for the property management company. Yeah.

Yeah. So just, you know, people know that we do we we're serious buyers.

Steve: So let's talk about your business as it stands today.

Austin: Yeah.

Steve: So you mentioned you got two realtors that they do your retail and your short sale.

Jake: Mhmm.

Steve: And you mentioned appointment setters. Yep. So what is the organization like?

Jake: So we have two lead managers, two full time acquisition, agents, one full time transactional coordinator, two full time disposition managers, a head, project manager, and then assistant project manager. And then I got, like, three about two or three full time GCs that work on all of our stuff. Yeah.

Steve: How many folks do you guys have going on right now?

Austin: Five.

Steve: Five? Yeah.

Austin: But we're gonna rent that.

Steve: Three full time GCs?

Jake: Yeah. Two right now. We're trying to buy we have 10 in contract we're buying. It's like closing on. So we wanna have each do three.

Steve: What's the mind, what's the, you know, the thought process behind, you know, like, expanding right now?

Jake: Because we just see a lot of retail activity. Buyers literally cannot buy retail. Everybody there's multiple bids on every property that's priced right. Right. And the whole thing about it is in New York, there's the fixed up inventory.

There's no there's none of it. There's not a lot of flippers. And if they are, they don't even do a great job. And we stage all of our homes. We do really fantastic work so that when people come into the prop we had 60 people on Saturday at one of our showings.

Like and we had, you know, we got that offer above asking, but we just, you know, we put out a good product for the, for the public.

Steve: Was that cash? Was that the 600? Was that cash? No.

Austin: I wish. I wish. Conventional. So

Steve: you didn't worry about the appraisal?

Jake: No. No?

Austin: Because there's so much there's the we're the cheapest in the market in that area too. So

Jake: We priced it right.

Steve: Okay. Alright. So what about marketing? What do you guys do for marketing right now?

Austin: So yeah. Good question. So marketing, our main strategies are bandit signs, cold calling. We actually have a door knocking team because they go out and door knock these properties. Direct mail, we kinda slow down, but we're starting to back up again.

And a lot of, like, you know, online Facebook ads and and SEO.

Steve: So what's your highest, like, your top two or three performing?

Austin: Door knocking, banded signs, and then targeted very targeted direct mail.

Steve: Mail. Who's knocking? You said you got one or two door knockers?

Austin: We have we used to have six. We kinda slowed it down. Now we have about three full time door knockers.

Steve: Who are they knocking?

Austin: Pre foreclosures, probates, list we list stack all our lists. So, like, people that are on, like, three or four lists. You know?

Steve: Yeah.

Austin: Because they're every list they're on. So Mhmm. What are

Steve: you guys using for that?

Austin: List stacking. Yeah. Property list manager.

Steve: Gotcha. So one thing again, I was messaging with you guys Yeah. You know, on Instagram. And then I got into Collective Genius, brought in to to help, you know, improve people's, sales processes. Yep.

And so you guys were in there?

Jake: Yes, sir.

Steve: So you guys signed up around In March. In March. Talk about that because I I told Jason Medley, you know, he's a he's he's a lousy self promoter. So I asked, say, any given anytime I can, I'm gonna, you know, push CG. Mhmm.

Talk about CG. How it's helped you guys?

Jake: It's definitely just helped us tremendously. You know, anytime we need any type of, you know, advice or expertise, there's so many people. There's so many different service providers. These guys are doing millions and millions of dollars of deals as you know. So it's just, you know, your net we love to say your network is your net worth.

Yeah. We love being in CG. We love it.

Austin: Yeah.

Steve: Yeah. Any other New Yorkers in there?

Jake: Billy Alvaro.

Steve: Billy Alvaro's in there?

Austin: Couple of guys. Yeah.

Steve: Yeah. And I think

Austin: the biggest thing is like this. Like, I have a money is time. So if I have a problem and I have to go shop around and find it, it's gonna cost me money. So if I have a problem, I call someone at TG. Hey, Leon.

Who can I help me with this? And the answer's right there.

Steve: He always great.

Austin: So that's to Leon Barnes. Yeah. That changed the game.

Steve: Yeah. Leon's great. And, actually, yeah, I forgot. Glenn's out there too.

Austin: Oh, yeah. Yeah. Yep.

Steve: Yep. Okay. So in your market, you know, like, people look at our market and and they think we're crazy. Right? There's there's a lot of guys doing really well out here.

Austin: Yeah.

Steve: In your market, how are you guys different than your peers?

Austin: Three things. Speed. So, like, if a call comes in, we're at their house the same day.

Steve: We'll be

Austin: with them for four or five hours. We really service them. We think about servicing before profits, and that's our mindset. We tell the acquisition guys, just do just service them, and we'll get it sold, and you guys will make money. So we really focus on providing services.

For example, we have a relocation department. So, like, if we need to relocate them, we'll physically go and help them relocate. We'll We'll physically give them money for a down payment. We just wired $13,000 for a homeowner to put a down payment on our house. Mhmm.

Most companies aren't doing that.

Steve: Yeah.

Austin: So we're providing down payment assistance, relocation, and, you know, at the end of the day, we're really just we're we're here to help them. So if we can help them out, great. If we can't, we provide them somebody else. A realtor, short sale, construction loan, whatever the case may be.

Steve: Yeah. So you're connecting them, helping them get whatever they need. Correct.

Jake: Yep.

Steve: Gotcha. And, so you were saying you're licensed, we don't use it at all.

Jake: Yeah. And I used to

Steve: to get paid.

Jake: I used to. In the beginning, when we do our own fix and flips and we didn't have project managers and we didn't have realtors, I'd be the one listing it, and I'd be the one managing it. But, you know, I just

Austin: I feel realtor really helps your business. I'm gonna really focus on that. It really helps the business. Exactly. Yeah.

Steve: So these guys that work for you as realtors, are they do they have other clients or is it

Jake: No. They work with us. They don't work for us. They're actually, like, big name agents like with Keller Williams and stuff like that, but they just give us they they make us a priority because we make them a priority because we provide them a lot of business. Yeah.

Steve: Gotcha. Okay. So you guys are doing a lot of different things. Right? And they're all doing really well.

If you were to say one thing you guys specialize in, what would that be?

Austin: Sales.

Steve: Sales. Sales? Yeah. Let's talk about that.

Jake: Yeah. I mean, look. He's the best acquisition manager, in my opinion.

Austin: Mhmm. And

Jake: he's taught a lot of our acquisition guys how to build rapport, how to service the clients, how to negotiate, you know, how to figure out exactly what type of situation they're in so we can help them.

Austin: Yeah. And I

Jake: feel like that's kinda, like, what really, you know, separates us. Yeah.

Steve: Okay. So are you then going on deployments, or you're training now where you're not going anymore?

Austin: I still go. I still go on them, but in the next three months, I'll probably be off of appointments. But, you know, there there's only so many of them, and there's only so many leads. So I try to capitalize on every one.

Steve: Yeah. Yeah. So do you cherry pick them at all? Or just

Austin: Cherry pick. Yeah. Yeah.

Steve: Alright. And then your your main focus then is acquisitions?

Austin: Yeah. Acquisitions marketing and then financing for buildings, getting the right financing in place.

Steve: Okay. And then what is your specialty?

Jake: Dispositions, operations, hiring hiring.

Steve: Gotcha. Very cool. And then let's see what else is there. What are some of the KPIs that are really important for you guys?

Austin: So on the acquisition side, leads, leads to appointments to contracts. Because I know sometimes some people here do it virtually. We do everything in person. So we just wanna know, okay, how many appointments do you want this week, and then how many contracts? And then, okay, there's no contracts.

Why didn't it get signed there? So So sometimes we've had some problems during corona, like, they just wouldn't wanna sign. It was it was a little bit slower. Mhmm. But now everything's picking back up.

So for acquisitions, how many appointments, contracts, dispositions? How many appointments? How many

Jake: times did the buyers go see the property? How many offers were made? Yeah.

Steve: Gotcha. So I love it. It's really clean and simple.

Jake: Super easy.

Steve: So COVID affected New York more than anywhere else. And we're kinda talking about this before the show started. Like, out here, it almost feels like COVID never happened out here. Right. You know?

So So how did that impact your guys' business?

Austin: To be honest, I know it sounds crazy, but it only sped it up because a lot of people here have the second homes that maybe they're summer homes or, you know, extra rentals that were vacant. Home the tenants left, and they don't know what to do with them. So we had a lot we actually had a lot of calls from people who had vacant properties. Those are the ones that we saw a lot of, you know, feedback from. So our business only sped up.

Jake: So

Steve: So these are people that have second homes in your area. Were they what parts of New York, Florida? Where are these other guys at?

Austin: A lot of them were, like, maybe living an hour away. Maybe from Manhattan that had it up here that weren't gonna go back back and forth. Mhmm. That way, I just wanna dump them.

Steve: Gotcha. Very interesting. Yeah. And so if you were to describe the market that you guys are in, how would you describe it? Hot.

Geographically. If you were to say, you know, from here to here as far as, you know, like, milestones or not milestones, like, markers, major, whatever. Do you guys have, like, a demographic? Like Oh, yeah.

Austin: So, basically, we we spoke on the Hudson Valley. So the city's here. We're forty between forty five minutes to an hour and a half North of Manhattan. We really don't touch anything in Manhattan.

Steve: So Right.

Austin: Basically called the Hudson Valley. Yeah. So it's between four and five counties we focus on.

Steve: Okay. So if you were to take, you know, like, across like, for us, we touch everything in Phoenix. Yeah. You know? So for us, from Downtown Phoenix, 25 miles around, that's, like, the whole market.

Austin: Yeah.

Steve: Are you guys something something something something like that? Or you guys go further?

Jake: Way way way bigger. So from, like, the bottom of Westchester County to the top of Orange County is probably about a ninety minute drive. Mhmm.

Steve: Let's

Jake: say about a 100 miles.

Steve: Yeah. Gotcha.

Austin: So you

Steve: guys have plenty?

Austin: A lot of grass.

Jake: Oh, there's a lot of opportunity.

Austin: Yeah. Yeah.

Steve: What are you guys spending right now in marketing?

Austin: About $18,000 a month.

Steve: Okay. And what is your heaviest marketing?

Austin: Direct mail. Direct mail?

Steve: Yeah. And you guys find a lot of luck with that?

Austin: Yeah. Oh, yeah.

Jake: We're looking to do some more stuff, though,

Austin: as well. One thing I forgot to mention to you is, we actually just started SMS, which has been really good because it's very cheap. So any of the list that we we get, we pull them. Instead of just cold calling them, we just started to text them. So it's been working pretty well.

What are you guys using? The Smarter Contact.

Steve: Smarter Contact? Yeah. I'm asking that because I know some other people that have reached out to me. I was like, this is what I'm using. And, like, they won't let me do it.

Like, so, like, there have been serve several providers. Yeah. Use this company. Use that company. They're always like, nope.

It shut down this area. Because New York's pretty litigious. There's a lot of attorneys out there.

Austin: Yeah.

Steve: Yeah. So I'm glad you guys are able to figure that out. What about monthly overhead all altogether?

Jake: And she just ran our number yesterday. We're at about $47,800 a month.

Steve: And that covers?

Jake: Marketing, staff, rent, expenses, miscellaneous. That doesn't cover down payments or, sometimes we put a low for our hotel deals. We put a little of our own money into the deal for renovation, so that doesn't count it as well.

Steve: Okay. So that doesn't include the GC either. Nope. That may include the rehab or no? Nope.

Does that include the rehab? That's just running the

Jake: parking running Raven three home buyers.

Austin: Yeah.

Steve: Crazy.

Austin: Because the problem is, like, sometimes that he was saying is the attorneys wants to put 10% down. So you bought a property 300,000, you gotta come out $30,000

Jake: out of your pocket. We'd like to negotiate cheapest as possible. Yeah. That's it. It's about yeah.

Yeah. In Westchester County.

Steve: Yeah. Are there any, like, tools or systems that you guys just systems that you guys just can't live without in your business?

Jake: Podio, PropStream.

Steve: You guys doing a lot from PropStream?

Jake: Yeah.

Austin: We like PropStream really good.

Steve: What do you like about PropStream?

Austin: You can filter the list. So, like, we have an avatar in each county what type of home we're buying. A three bed, two bath before 1980 year built, assessed in value under 300,000. We're so specific because we want to get an ROI.

Steve: Mhmm.

Austin: So we'll pull those lists from PropStream. They're not always updated, most updated, to be honest, but they're pretty accurate. So we utilize them a lot.

Steve: You said your dad works with you guys now. Yep. What does your dad do?

Jake: So he was actually a carpenter for himself for twenty five years. He had a small, you know, business for himself. And then he retired, became a limo driver, saw that we were getting into the real estate business.

Steve: So he became a limo driver

Austin: Yeah.

Steve: Before or after you guys started. Before. But he was still absolutely adamant about you guys staying in college.

Austin: Oh, both of our parents were.

Steve: Because he didn't want you guys guys becoming a limo driver. Yeah.

Austin: No. They didn't wanna take

Jake: us they want us to take any risk.

Austin: Yeah. They want us to

Jake: go back to school. Our mom was signing us up for, you know, junior year, first semester. We were like, no way. No way.

Steve: Alright. So, so you just say your dad was limo driver. And then?

Jake: And then once he saw that we got into the real estate business and he had, you know, carpentry experience, he said, why don't I help you guys out as a project manager? So we hired him full time.

Steve: Gotcha. Very cool. That's awesome. Yeah. Daryl Thomas says he used to flip shoes as well.

Let's go. Let's see. Jeffrey Rommelis is asking, what challenges have you guys faced in New York that you think most other investors don't face?

Austin: It's a good question. Don't face?

Steve: Yeah. Like, what what are what are challenges that are specific?

Jake: Being able to get rid of deals. We're very good at selling the deal. So I feel like a lot of investors some like, we do a lot of JV deals. Mhmm. So sometimes wholesalers can't sell their deal.

Mhmm.

Austin: And

Jake: we're able to do it every time.

Steve: Okay. What do you attribute that to?

Jake: Just, you know, our debuyer's list. Depuyer's list. Always networking, you know, using things like contract vendee, things that other investors don't really do.

Steve: What's that? Contract vendee?

Austin: Yeah. We get a property in contract. Let's say our our direct connections don't wanna buy it. We'll call Ricky or who's our agent and have them listed on the market. So now the whole entire place sees it.

Mhmm. So it's not just hundred two two hundred buyers. It's everyone around it can see it.

Steve: So you're listing it with equitable interest?

Austin: Yeah. On the market. Yeah. On the MLS. Gotcha.

Steve: Very cool. Let's see what else is there. So Ka wants to know what do your margins look like right now? We kinda talked about it. It's, like, $30.35 for wholesale, about 50 for a hotel.

Austin: Yeah.

Steve: And then 6 figures plus for a flip. Yeah.

Austin: Yeah.

Steve: What about for next year? Do you guys plan on increasing any of those specific margins, whether it's wholesale, hotel, or flip?

Jake: We definitely wanna do a lot more buying. If the economy stays where it's at right now Mhmm. Because of just the demand for retail products, it's ridiculous. So we definitely wanna do more buying.

Steve: More wholesale? I'm sorry. More wholesale or more or more wholesale?

Jake: And fix and flip.

Austin: Both. Yeah.

Steve: Gotcha. Okay. Alright. So what else is there? How Warner Caroga wants to know, how are you scheduling your closings?

Jake: So our attorneys schedule them. So we have to just consistently ask our attorneys to reach out to the other attorney and schedule a closing. So that's something that that there is a delay because you have to get everybody on the same schedule.

Steve: Mhmm. And

Jake: these attorneys are busy. They're closing deals. They have their own business. So that's one thing. Yeah.

Slows it down a little.

Steve: Any tips?

Austin: Have a good TC that can really just follow-up without annoying them. Because if you annoy them, they're not gonna do anything for you. Mhmm. So a good TC is very vital to the business. Oh, yeah.

Steve: What would make a a good TC for that?

Austin: Someone who's just, you know, kind, you know, genuine, and actually, you know, can really stay persistent without being coming off as aggressive.

Steve: Yeah. Gotcha.

Jake: Yeah.

Steve: There's not a lot of attorneys getting love

Austin: in here. Yep. Exactly.

Steve: Kristen Franklin wants to know how many deals have you guys closed in Manhattan? Zero. Zero. Zero. And then as far as spread goes or diversity, you got single family townhouses, commercial, multifamily.

What is your bread and butter?

Austin: Biggest profit spreads we've seen are two families on the wholesale side.

Steve: You know? So when you say two families, I'm I'm I'm taking that as duplexes. Is that what

Austin: you're talking about? Yeah.

Steve: Okay. We're talking about leads. How's the permit process been going during the pandemic? That's what Isaac Abalos wants to know.

Austin: We got lucky. We bought some some place in New York are really tough.

Steve: Mhmm.

Austin: We bought in the right areas that, you know, we're very, very lenient in terms of permits. To be honest, we really don't pull too many permits. But, if we deal, we we buy in the right areas that will allow us to do it quickly.

Steve: Yeah. Gotcha. Real estate solutions company. So, let's see what else is there. Second homes in New York.

That sounds backwards. And then are you guys doing so you mentioned SEO. Yeah. How much of your business is coming from SEO?

Austin: I would say about 10%. We try to do it. We run a lot of Facebook ads. We're always generating traffic to the website and stuff. So we try to get as many online clicks as possible.

Steve: And then are you guys doing any Google pay per click?

Austin: Got it really expensive to turn it off. Yeah.

Steve: Really expensive? What's expensive?

Austin: $2.50 a lead. $2.25 a lead. Yeah.

Steve: That's not expensive.

Austin: Tasha was. Yeah. Because we were so used to getting so cheap deals. You know, we're rocking. It was so cheap.

Steve: I mean, those numbers are are good even in this market. Really? Yeah. We're paying more than that for Lee for pay per click.

Austin: Wow.

Steve: Let's see what else is there. You're getting a lot of love for, you know, being young. Let's see. Someone said they sent next to you extreme freedom. Kish Arsani.

You guys are extreme freedom?

Jake: Yes. Yeah. Sean Terry.

Steve: Yeah. Is your attorney in house or outsourced?

Austin: Outsourced. Outsourced. Yeah. The goal is probably in the next six months to to get somebody that's gonna be in house. So the intention really is focused on, you know, actually closing the deal.

Steve: Yeah. And then Zolt wants to know what are the cheapest areas that you recommend for investing in New York?

Jake: Orange County.

Steve: Any part of Orange County? Or is it just

Jake: Newberg, Middletown.

Steve: So I wanna buy something in Orange County. What am I spending?

Jake: To fix and flip? Or So

Steve: it's just to buy as a rental?

Jake: $150. $101.50.

Austin: Yeah. $100,150. Really?

Steve: Yeah. I just assumed, like, a lot of New York was just really expensive.

Jake: Yeah. No. That's not the that's not the case.

Steve: Very fascinating. Because it's

Jake: up Upstate New York. You know? It's it's about an hour, an hour and a half away from the city. So

Steve: Frank Rangel wants to know how many angle. Foreclosures have you guys purchased this year?

Austin: Foreclosures? Like, preforeclosures out of all of our deals. Mhmm.

Steve: I would

Austin: say about 20% of pre foreclosure or behind their taxes.

Steve: Or behind their taxes. Talk about that. So a

Austin: lot of people obviously can't afford the New York taxes. So we we hit those pretty hard.

Steve: What, because, like, I hear we're supposed to be about 1% of assessed value. Yeah. We really like our property taxes. Probably close to, like, point 7% Yeah. Of assessed value or of the property's value.

Austin: Mhmm.

Steve: What do you guys see? And, like, what are property taxes in New York?

Austin: Yeah. Closer to the city, they get real they're outrageous. Like, they're probably over assessed. That's why homeowners are going crazy.

Steve: Over assessed as in, like, the city is saying your house is worth x, but it's way but that's way more than how properties work.

Austin: We have a deal. The home the assessment value is $4.50, and we're selling at $1.60. Because the house is just so it's a five 4,000 square feet. So that's the reason. But a lot of times, they're over assessed, and they're paying way too much in taxes.

Steve: What percentage of the properties are they paying property taxes?

Austin: I'm not too sure percentage wise. I just know they're over assessed. Yeah.

Jake: It's over, like, $1,012,000 for, like,

Austin: a $300,000 home. Yeah. Probably more. Close to 15 sometimes.

Steve: Okay. So, like, up to, like, 5%? Yeah.

Jake: Yeah. Up to 5%. And sometimes more.

Austin: I had

Steve: some rental properties in in in Texas, and there was, like, 3%. I was like, god. This is atrocious. So it was way worse.

Austin: Don't buy New York.

Steve: So the rental property in New York, is is the rental market making sellers hold long in New York? I don't know what that question means exactly. So we talked about the percentages. So it was predominantly, flips and and and and hotels. Are you guys holding anything besides the multifamily?

Austin: Nope. Just those two two buildings.

Steve: Okay. Alright. And then let's see what else is here. Seller's attorney has to provide the contract in New York. Are you guys bypassing that?

And I maybe that's the challenge I

Austin: would like. That's the that's the challenge. So yes and no. So, legally, no. But most people think yes just because it's New York because it's an attorney state.

So we had an attorney draft up, like, one blank contract, and then we go to the house and just fill out the the the, the property. Terms? Yeah. The terms, basically. So, we do everything at the property.

Steve: Okay. So you guys are not having the attorney draft the contract?

Austin: We have one blank one, and then the actual the fine details, purchase price, terms, closing date, that's all drafted at the house depending on where the sellers, you know, terms are.

Jake: There are deals, though, that our sellers our attorney will set you know, we'll be in contact with the other attorney. And they'll just draft the contracts up together.

Steve: Gotcha. And then Real Love and Real Estate wants to know, how do you deal with the gentrification issue some homeowners feel is attacking New York City right now?

Jake: We're not really in New York City. So

Steve: Okay. Alright. Michael Esposito wants to know what kind of books would you recommend? Or are there any books that you recommend?

Austin: Definitely. Never split the difference on the on the sales. Think

Jake: and Grow Rich, The Power of Now, The Secret, those are, like, you know, spiritual books, but all about your mindset. You know?

Steve: Yeah. I can see your mindset plays a really big role

Austin: Oh, yeah.

Steve: For you guys. What would you say is your why?

Austin: Our parents, we're gonna get you know, my dad's an immigrant. Came here when he was 23 years old. So And

Steve: we're everywhere.

Austin: Netherlands. Never really had money. So our parents really never had never had too much. Grew up always, you know, scarcity of my a money mindset. So we wanna first get our parents right, you know, get ourself right, and then, have other people get right.

Steve: Any difference for you or same thing?

Jake: Same thing.

Steve: Same thing. Cool. What are you guys' biggest struggle right now?

Jake: I would say probably managing people to be 100% honest, but we just hired a COO. So that's gonna be able to help us out with, you know, just putting down the lay of the land. But we're really good at buying and selling. Everything in the middle we can work on, but, you know, that's why we have people around us that are gonna be helping us out with

Steve: that. So let's talk about your your managing people. What were the challenges in managing people?

Jake: Just making people show up and making them do the do what they have to do. Some people just don't wanna do what they have to do.

Austin: Yeah. Like, knowing the numbers, like, we stood on our he used to be dispositions. I was acquisitions, one TC and one lead manager. So I would know by cheap, so high, like, it was but now it's actually knowing the actual numbers. How much for an assignment?

How much cost per lead? Like, we're not really good at that. So we had to outsource that. Yeah.

Jake: We did 35 deals last year, just me and him with one TC.

Steve: Mhmm.

Jake: No project manager. Nothing. And then this year, we started outsourcing acquisitions, you know, another TC, disposition managers, project managers, operations officers. So now we're really starting to build something.

Steve: Yeah. Gotcha. Alright. That was is that both of your guys' biggest struggle, or that was just your biggest struggle?

Jake: Yeah. It's my biggest struggle.

Austin: I think, yeah, managing. I think also just maintaining, like, you know, growing knowing the I think actually knowing the actual numbers. Like, what is that? Because if you put 5,000 abandoned signs, what is that gonna bring you? If it brings you 5,000, why do it?

You know? So physically knowing what the ROI is on the market was probably some of the biggest things.

Steve: So right now, you're you you you put 5,000 abandoned signs right now. What's coming back?

Austin: A lot more than five.

Jake: Do you

Steve: have an idea?

Austin: Probably five x. Yeah. Yeah. 25,000 minimum. Because, again, we try to monetize every lead, which if you're in places like New York, San Francisco, really should try to do that because even on the listing, you can make as much as an assignment.

So it's it's definitely worth it.

Steve: Gotcha. And then you said you hired the COO. What's he responsible for? Or he or she responsible for?

Jake: Operations. Just making sure when a transaction comes into the the business that it gets from contract to the closing. Mhmm. We want him to facilitate that completely and make sure that he's the people that are in the office are doing what they have to do on a consistent basis.

Steve: Gotcha. So he's a process manager and a people manager.

Jake: Correct.

Austin: Tracking numbers, scorecards, KPIs, doing some of the financials as well, making sure the numbers make sense. Yeah. Gotcha.

Steve: How'd you find that guy?

Jake: Wisehire.com. How do

Steve: you know he's the right guy?

Jake: Funny story. We're working with Gary Harper from CG,

Steve: and I was on the

Jake: phone with his COO, Austin McGurdy.

Steve: Mhmm. And we

Jake: were speaking. He actually helps out some other hires as well. Mhmm. And he actually said to me, he said, if you by based on his PI, so it's a personality index. He looked at it and he said, if you wanna hire this guy and you have the opportunity to, I would do it today.

Yeah. That's what he said to me. So I didn't take I took that for granted.

Steve: Yeah. Gary's a a stud.

Austin: Yeah. Yep.

Steve: Alright. So what is your superpower?

Austin: Building rapport.

Steve: Besides acquisitions.

Jake: Building rapport. It's true.

Steve: Yeah.

Austin: Yeah. Yeah. I I think I'm pretty good at just understanding people and knowing, you know, these someone's like I would say, yeah, probably building rapport and, you know, just understanding because in sales, it's people always want them to be understood, but you have to understand the other person. So I think a lot a lot of people go into houses, and they want the other person to understand them. But, you know, if you wanna see the other person, you're gonna make a lot more money.

Jake: So I'm

Austin: very good at understanding somebody and understanding where they want to go, you know. So I always ask the appointment, you know. So why even sell this thing?

Steve: Yeah. You know? Lots of empathy.

Jake: Yeah. Exactly.

Steve: What about you?

Jake: I would say communication. I think it's number one thing in business. You have to be able to communicate. And if you can't, you can't get anything done.

Steve: What are you good at communicating?

Jake: Just what needs to get done. You know, anything like scheduling, just roles, responsibilities, and just things that really just need to get done. You know? Gotcha. Priorities.

Steve: What is the greatest lesson you guys have learned?

Jake: Fail forward. Continue. We continue to fail every day. We keep learning, and we're just gonna keep growing each and every day.

Austin: Yeah. I would say the biggest lesson that I've learned is a lot of people tell you can't do something because they couldn't do it. So we've heard that a lot. You know, you can't do this. You can't do that.

So we just stay focused and, you know, stay with the end vision every day. You know, know the end goal.

Steve: Daryl Thomas wants to know, how did you transform from a scarcity mindset to an abundance mindset?

Austin: It's a good question. So, again, you know, growing up with scarcity, you know, you have to kind of envision you already have an abundance. So for me to get a six pack, I have to envision myself with a six pack. So the same thing in business. We already envisioned we had it.

So if you believe you have it, you're gonna get it.

Steve: Yeah. Your upbringing is like you already had a million dollars in the bank. Exactly. Do you guys do any creative deals in New York?

Austin: That's one thing we're actually, you know, trying to work on. We're trying

Jake: to get into it's a little

Austin: tough, because there's some there's some laws and stuff. It's a little harder. We haven't done any, but we're looking to get into it.

Steve: Gotcha.

Austin: Yep.

Steve: You should definitely talk to Pace while you're out here.

Jake: Definitely.

Austin: And I'm more closer.

Steve: Alright. How are you guys paying your COO?

Jake: Salary plus bonuses and incentives.

Steve: Very cool. Very cool. What is your favorite best or most interesting failure?

Austin: Repeat the question.

Steve: Favorite best or most interesting failure. What do you

Austin: mean favorite best?

Steve: Just a failure that just was it was a glorious failure. Something that you'll never forget. It was just a

Jake: Picking the wrong contractor. That is the number one. When we we don't have the right contract, you can't get anything done. We ended up pick for our first rehab. It was a hotel deal and I would drive every single day, forty five minutes for those six weeks for that, for that, for that timeframe for the renovation.

And one day I got to the project about two weeks in and I went to the house. No one was working. There was no music playing. There was no guys painting, nothing. So I go around the back, the guy sitting in his van, he's asleep in his car, the GC.

And I just said to myself, you know, this can never happen again ever. So after that, we really just locked in on who do we have to hire to get this job done and are they the right person?

Steve: So GCs are some of the hardest people to to to find the right one.

Austin: Oh, yeah.

Steve: And if they're, like, pretty competent not even, like, amazing. They're, like, pretty competent. They get pretty expensive.

Austin: Yes.

Jake: That's true.

Steve: Is that what you guys are finding?

Austin: Yes. Correct.

Steve: Gotcha. So what are you guys doing to find good GCs?

Jake: Multiple bids. You know, we have a lot of guys we work with. We give them a lot of business, so they understand we're providing them a lot of value so they can take off a couple bucks here and there.

Steve: Yeah. Gotcha. So Kish asked this question. How do you get paid if you're using other realtors to list retail leads?

Jake: So I work for eRealty Advisors. So we are a 100%, brokerage. So I don't pay out any, splits to my brokerage. So if I get a $5,000 referral check, I pay $200 a month, and then, you know, I just get that transferred from my e Realty account.

Steve: Yeah. So, Kish, that's something that I recommended multiple times. You gotta be licensed. Because your license, you're finding people that wanna sell their houses Correct. Which you're through with an agent.

Correct. And it's just no reason not to get paid for that legally. There's no reason not to get paid legally.

Jake: Correct.

Steve: And Farai wants to know what is a GC?

Austin: General contractors. They fix up all the work.

Steve: Yeah. There are people doing the work, make sure the house looks good, and they're the ones that are responsible to the if anything goes wrong in the house.

Austin: Yep. Yep.

Steve: Is there warranties? Alright. Is there anything else that we didn't cover here, that you guys wanted to talk about?

Jake: I don't think so.

Steve: Going through a lot of the questions. I mean, a lot you're you're motivating a lot of people. I'm not getting as many questions as I normally get, but you're definitely motivating

Jake: Appreciate that. Yeah. That's great.

Steve: A lot of people. Alright. So great deals. Yeah. Yeah.

Like a lot. REI rail versus ProStream. Have you tried REI rail?

Austin: Max Max was, Mhmm. No. I've not tried that.

Steve: Okay. Yeah. ProStream is pretty good. I think actually, I think Max is pushing ProStream now.

Austin: Yeah. ProStream is good. Yeah.

Steve: Yeah. So if you're an investor in New York, what what would you recommend people do to start? What's the first thing you would do?

Austin: So I would start, start talking to the right people. You know, networking realtors, maybe talk with some attorneys, find the right opportunities. And probably the first couple transaction is wholesale because New York has a lot of pockets. You know, there's a lot good places, bad places. Just wanted to kinda know your areas.

So farm the right areas and probably start off wholesaling and then start, you know, start buying rentals and fixing flips when you know the right markets to be in.

Steve: Yeah. So you guys started not that long ago. You said it's 35 deals last year. Yeah. And then what were some of the things?

Because, I mean, you started g c CG this year. What are some of the things that you did that helped you take a giant leap forward towards the end of last year or, you know, to make the biggest difference?

Austin: I think the biggest mindset difference was a lot of people get into wholesaling, and it's still like a hobby. So we actually made a made a commitment that it's a business. So we're we ran like a business now, hiring the right people. So we only can do so much ourselves. Mhmm.

So we wanna get to the next level. We have to hire the right people. So hiring is important. Focusing on the right sales, because you can have the best marketing, the best dispositions. But if you're not buying cheap enough, you can't sell them.

So Yeah. Getting the right sales aspect towards it, hiring. And then I would say, focusing on marketing, you know, because leads are the the lifeline of the business. So spending a lot of money on the right types of money on marketing was very, very key.

Steve: So you guys mentioned Gary Harper earlier, and he helped you figure out if the COO is the right guy.

Jake: Yeah.

Steve: How long you guys been working with Gary?

Jake: We've been working with him for two months now.

Steve: Okay.

Jake: So he helped us hire a project manager, disposition manager. The COO was a recommendation, so it didn't go through them. But, you know, I actually interviewed him myself, the COO, and hired him, but he'd actually got us to dispo and project manager.

Steve: Yeah. I mean, Gary's been around for a long, long time.

Jake: Great.

Steve: I was, beginning part of COVID. He has he has his own little group, and I was really impressed just the people that were in his group Yeah. Yeah. That he's working with.

Jake: Oh, yeah.

Steve: So anyone that's, you know, interested in traction should definitely talk to Gary Harper. Yep. Snap Realty wants to know, are you buying houses with Section 8 tenants?

Austin: Nope. Mm-mm. Okay. Away from that.

Steve: Really? Why is that?

Austin: Too many problems. Especially in New York right now, there's a moratorium you can't evict. So Yeah. We're just not we're we're looking to get paid on rentals.

Steve: So we love our Section 8 out here in Phoenix. Let's see what else is there. Have you guys invested in, Erie County?

Austin: Where?

Steve: Erie. Erie County, Buffalo, New York.

Austin: Nope. No. Too far up. Too cold.

Steve: What's your daily schedule look like? That's probably gonna be different for each one of you.

Austin: When does it start?

Jake: So I get up, you know, around 07:00. I have my morning routine, meditation,

Steve: read my books, do a little exercise, and then get to the

Jake: office around 09:30

Austin: Mhmm.

Jake: And stay there till, like, five, six every day.

Steve: Okay.

Jake: We're just looking at a lot of properties at the office all day. If you need to find him, he's at the office or he's at a house.

Steve: Nowhere else. What's your daily schedule like?

Austin: Yep. 06:00. Get up, read the book. I always read one chapter every morning. It never shows the difference just because I wanna get my mind right.

Steve: Mhmm.

Austin: Listen to John Martinez, go to the office, have a meeting with our sales guys, and, you know, have see as many properties as possible and talk to as many sellers as possible.

Steve: Yeah. I'm looking forward for Chris Voss speaking at our, quarterly event.

Austin: Yes. It's crazy. Yep.

Steve: So now we're also, can a seller ask section eight renter to vacate when they decide to sell? What was the question? Can you ask a section a renter to to to leave when you decide to sell?

Jake: Probably won't want it.

Austin: Yeah. Probably won't want it. Yeah. You you can ask them, but say no. You're stuck with them.

Steve: Carlton wants to know, have you guys ever looked at hotels?

Jake: Hotels? Mhmm. No. Not yet. That's in the future, though.

Steve: Yeah. I mean, they're gonna those prices are gonna be crashing down.

Austin: Oh, yeah.

Steve: How much data are you guys going through a month?

Austin: Debt data. Mhmm. So we always get new new list from PropStream. We do we get a lot of this from the county, so we refresh those probably every once a quarter. Like, the preforeclosure list, the probate list, we can tend to get those, you know, monthly, quarterly.

So

Steve: Yeah. And then, Francisco wants to know, how do you get your seller how do you get the seller to get his or her attorney to allow the contract to be assignable?

Jake: So we put in

Austin: we put in every contract. It has to be assigned. So they really don't even sometimes they even miss it. A lot of these attorneys are not even that's that smart, and they just don't even see

Steve: it. Mhmm.

Austin: But every contract we provide, our attorneys know it has to be assignable. And if they don't allow assignment, we have to double close, which we don't like

Jake: to do. Or we'll just close on ourselves if it's a good enough deal to hotel or fix and flip. Yeah.

Steve: Gotcha. And, one of the things that we're really lucky with out here is it's really cheap to borrow hard money. Like, hard money here is basically like private money.

Austin: Yeah. Yeah. Amazing.

Steve: What is it like for you guys out there in New York? What are you guys paying for for hard money?

Austin: We stay away from hard money now. We try to use private money or give a little bit of equity out. And the reason we do that is because the hard money that they're so expensive, it'd rather give a little bit of equity.

Steve: Yeah. So what does that mean as far as giving up a little bit of equity?

Jake: So we have one

Austin: guy that finances 95%, 5% down, one point, and then he'll be 10% interest, but then he'll get 10% equity. So it's worth it because the other guys want four points sometimes.

Steve: Yeah. 10% of the deal. Yeah. Gotcha. Cool.

Very cool. And then what points did you guys decide to get in office? That's what Warner wants to

Jake: know. We got our office, I think in January 2018. Early. We wanted to get into an office early because we wanted to separate ourselves from being at home, like, you know, hanging out versus being in the office and working. So it was a big shift.

Steve: What's the company culture like?

Austin: So, obviously, we're not very corporate. So if some you know, we we focus mainly on results. You know?

Steve: So it's like Wolf of Wall Street.

Austin: Exactly. A lot of energy. Just deals.

Steve: Gotcha. Very cool. Very cool. So I want you guys to leave listeners with a thought, each one of you guys. So I'm gonna make one quick announcement.

Guys, if you guys like today's show, please like hit the like button right now. Comment. Share this if you can. And then next week, we've got Dominic Felix and Gonzalo Coroz. They're coming back for round two.

They're gonna talk about how they did 200,000 in wholesale fees in Florida last month. And I they send me the HUDs, and it's it's kind of crazy. So definitely check us out next week. And again, guys, if you guys want to check out the, the the perfect seller appointment, go to disruptors.com/checklist. So I'm gonna start with you.

Austin: Cool. So obviously, the biggest tip is, like I said, commitment. That's the number one of my favorite word. Whatever business you're trying to start is wholesaling, gonna be an Uber driver, whatever the case may be, just make a full commitment because if you're in it halfway and out halfway, it's probably not gonna work. So as more people get so frustrated, it's not working because they're really not committed to it.

They they they are, but they're really not fully committed. So if you're trying to get into wholesaling, you know, listen to guys like Steve and just take a full commitment and results will happen. So just stay committed.

Steve: What would be how or what steps should they take to be committed? Because it's easy to say, like, you know, be committed. Yeah. What should they be doing to demonstrate they're committed?

Austin: So revenue generating activities. So, obviously, if you're by yourself, talking to sellers, getting the right data, having the right conversations, going in appointments, making offers is all you should be doing. For breakfast, lunch, dinner, forget about that. Just make offers, talk to sellers, and have quality conversations.

Steve: Sound like an acquisition manager. That's it. Literally. What about you?

Jake: I would just say, you know, you gotta surround yourself around the right people. Because if you're not gonna surround yourself around the right people, you're never gonna get to where you wanna go. I'm the prime example. I had a 2.1 GPA in college, hanging around the wrong people, got into real estate, started connecting with realtors, mortgage brokers, other investors, people that had the right mindset that I had, that we had. Obviously, we had to grow that mindset and just continuing to excel and, you know, just take consistent efforts daily on a daily basis.

Steve: So same thing. Tips for connecting yourself with the right people and then the how to, stay consistent.

Jake: Don't be afraid to get out there, go to events. We went to so many we had our own meet up a meet up group. We met a lot of people there. We were always going to real estate meet ups. We were always, you know, looking on just real estate twenty four seven.

If people had the right mindset where they're looking to grow and they're looking to take advantage of their of their life, then that's what we're looking to do too.

Steve: Yeah. I love it. And that's some I I got a couple of things that people ask about how how, the the commonalities. And I say that everyone is successful as they're obsessed with success.

Jake: That's it.

Steve: They're just this is it. Like, there's no there's nothing else to solve

Jake: with the tracks. Seven.

Austin: Yep. Yeah. There's nothing else.

Steve: So if someone somebody wants to get a hold of you, how do they get a hold of you?

Jake: I'm on Instagram at Jake dot Derraff, j a k e dot d e r a a f f.

Steve: Yeah. Don't find him on Facebook because he's we're not Facebook friends. How else someone get a hold of you?

Austin: The, t h e, Austin, a u s t I n, same last name, Derraff on Instagram. Facebook as well too.

Steve: Alright. So we can't shake hands yet. So thank you, guys.

Jake: No problem. Much for having us.

Steve: Thank you, guys, for watching.

Austin: See, we real estate disruptors. Can't nobody touch us. And yet we about to give you gains. Shout out to Steve Trane. Real estate disruptors.

It cannot touch us And yet we about to give you game Shout out to Steve Train Jump on the Steve Train We about to give you game Already eyes flowing through my veins And you don't have to lick no further See right here you gonna learn everything Yeah. See, we real estate disruptors.