Beau Belmont: There's something going on with Kanye right now. Everybody was talking about this Ondo, Kanye destroyed it, and then on the pillars, he wrote some stuff. I mean, it was it was crazy. And then I saw the headlines where he dropped it from 54 to 39, and it was once for sale for 75,000,000. Bonnie bought it for 57.
I said, oh, man. He needs some cash. I reached out to Jason. I said, hey, my offer is gonna be considerably less. Jason's like, just throw in an offer, man.
It it doesn't matter. He's liquidating a whole bunch of assets. Just just throw in an offer. I said, okay, I'm gonna throw in an offer. So that offer was 21,000,000.
And he was like, he's like, there's no way. There's no way. And this contract was slid in there. And
Steve Trang: Welcome, and thank you for joining us for today's episode of Disruptors where millionaires are made. Today, we have Beau Belmont with Bellwood Investments, and Beau flew in from Huntington Beach talk about his secret to managing a $157,000,000 in assets. Now, guys, I'm on a mission to create a 100 millionaires. The information on this show alone is enough to help you become a millionaire in the next five to seven years. If you'll take consistent action, you will become one.
Guys, if you're already a millionaire, we wanna recognize you here. Please scan that QR code on the screen. If you want more help becoming a millionaire, you can also scan that same QR code as well. And before we jump in, if you're here to learn how real entrepreneurs are building real empires, hit that subscribe button because every week we're dropping lessons that can help you create your first or next million. And, guys, right now, you have a 100,000, 250,000, or even more sitting in your CRM, and you can resurrect all your old and dead leads with our objection proof AI calling agent.
Text cash to 33777. Now to unlock the money that's hanging out in your CRM, that's cash 33777.
Beau: You ready? I'm ready.
Steve: Alright. So thanks for jumping on. We just met not that long ago, at LA Tech Week. Right? And, I heard some crazy stories, like flipping Kanye West's properties.
So I wanna talk about that. Before we get into all that Sure. What was your life like before you got into real estate?
Beau: Before real estate.
Steve: Before real estate.
Beau: So before real estate was, you know, high school and college. Mhmm.
Steve: And
Beau: then it was mostly I I thought I was gonna go pro NFL. That was, like, my dream.
Steve: For sure.
Beau: And, of course, like most, you know, young men. But that didn't, wasn't in my cards. Mhmm. So, I was at junior college, and then I was offered a job at a place called Ameriquest Mortgage.
Steve: Ameriquest?
Beau: Yeah. Ameriquest back then.
Steve: I think they were huge.
Beau: They were huge. Yeah. They were huge. Yeah. Subprime lender.
Mhmm. And it was the Wild West back then, and I was in my early twenties and making $30 a month.
Steve: Mhmm.
Beau: And I said, NFL what? You know, like, I was I was sold. Right? So I got into real estate at the age of 20 and started selling subprime loans. Before you
Steve: even graduated college?
Beau: Yes. Exactly. Well, I actually stopped. I put a pause on college and went full time, mortgage industry.
Steve: 30,000 a month at 20 years old.
Beau: Oh, it was it was a no brainer at the time. Yeah. There was there was no other alternative.
Steve: So this is when everyone was just making crazy money. So this is, like, 06/00/2005?
Beau: Yeah. This was before then. This was, 02/1945.
Steve: Mhmm.
Beau: Yeah. '6. Mhmm.
Steve: Got it. Okay. So it was easy.
Beau: It was easy money. Life is easy. Mhmm. Alright.
Steve: And it's just a happy ending right there.
Beau: Yeah. Yeah. It was it was perfect. Yeah. I was it was doing I was doing tremendous deals.
I mean, we would do something called a one zero five five. We're making five and a half points on a loan and bringing
Steve: somebody five five?
Beau: Yeah. We would one zero five five them, and that was what we, you know, phrased it out at Ameriquest. You know? So you would get five and a half points on a deal. And, you know, it's a, you know, $500,000 deal.
You're, you know, bringing in $25. You're making a split of that and doing ten, fifteen deals a month. And, yeah, it was it was easy money. Basically, half a house. Yes.
Exactly. Yeah. You're getting
Steve: half a house worth of revenue, not to your bottom line, but to the company. Half a house every month you are producing.
Beau: Oh, yeah. Our portfolio was doing half 1,000,000,000 a month. Yeah. And just dropping people from 9% to seven and a quarter in, maybe high sixes, but it was all dropping from nine to sevens. And they were happy getting cash out.
Negams, you know, that was that was the, creator of
Steve: the crowd. Negams?
Beau: Yeah. Exactly. Do you wanna elaborate what that is? Yes. Absolutely.
Yeah. So we did Negams for, oh, jeez, probably about three years. And we would have I mean, that's was our biggest return right there. Mhmm. It was the neg am.
So
Steve: But, like, it's a negative amortization. Yeah. What does that mean for the listeners?
Beau: So so that was it was we also called it the option arm, which was
Steve: Which is much much more palatable.
Beau: Yeah. Yeah. Exactly. So negam is negative amortization. So amortization is the the death of the mortgage.
Right? You're paying it off over time. Now negative am is where it's not dying. It's actually growing. So that loan is getting larger than getting smaller.
And that would happen because there would be options of payments. You would have a 1% option payment, then you would have an interest only, and then you would have your actual PITI interest or or payment. And so, you know, your middle payment wouldn't move the needle. Your your third payment would actually drop it a little bit. You'd pay some interest or, you know, principal and interest.
And then your 1% neg am option, which was what everybody decided to pay, would be you know, let's say your mortgage payment was $2,500, but you had this 1% payment option, and now it was $1,500. Where does that extra $1,000 go? Well, it gets added onto your loan. Mhmm. And so you know?
And we would have to disclose this. People would ignore it, and they would call back and say, well, my mortgage just went from $3.50 to 400 in a year. Why? And, you know, now my home isn't worth this much, and I owe more. And and that's, you know, that's kinda what what caused a bit of the, the downfall.
Steve: I remember when those loans were becoming popular, option arms. And we didn't have ChatGPT at this time. Right?
Beau: Good day.
Steve: We had Google, but even then, it wasn't even that great. And we're just looking at these things. I was like, why is anyone buying a house with an option option arm? Yeah. Right?
It was insane. And, of course, what we thought would happen with those happened. Mhmm.
Beau: Yeah. Yeah. Exactly. Well, I mean, for, like, a business owner and they have a a slow month and they're responsible fiscally responsible, then it it did make sense. Right?
You know, if you had, you know, low sales, then you can take that 1% option and make up for it with the following months.
Steve: The stated income people made sense.
Beau: Yep. Stated docs. You're
Steve: actually self employed. Yeah. Not so much for the w two employee.
Beau: No. That stated doc got a lot of people in trouble too. Yeah. You know, you're working at, Taco Bell saying that you make a half million dollars a year, and and the underwriters are put putting those through.
Steve: Mhmm.
Beau: And, you know, we had appraisers, you know, just overvaluing everything. I mean, it was it was the wild west. People were just kinda doing what they wanted to. There wasn't a tremendous amount of oversight. But now there is.
Right? Now A lot of oversight. Now there is. There's a lot of residue.
Steve: Oversight, probably.
Beau: Exactly.
Steve: So alright. So you're you're partying it up, doing really well Yeah. And then the music stops. Dead silent. So what happens then?
Beau: Yeah. So, I had a friend of mine, Dan. He was, actually my neighbor. Mhmm. And he was doing something called flipping homes.
And, actually, it wasn't he wasn't calling it flipping homes. He was buying and selling distressed real estate REOs at the time because now there were plenty of them.
Steve: Mhmm.
Beau: And so he was going in and fixing them and and selling them even in a downturn market. You know? He was he was turning these things. I was interested because I always had a bit of an interest in real estate, construction and architecture. And so this was a way for me to not leave the industry because subprime lending was a bad word at that time.
You know, nobody was doing subprime lending, so I needed to pivot. And so Dan kinda took me under his wing, took me to a couple job sites, and showed me what he was doing. And it was it was relatively simple stuff. I mean, if these contractors whom, you know, I grew up with, you know, tons of them, you know, in school, and and they were no smarter than I or and didn't have any special abilities to do this construction work.
Steve: Mhmm.
Beau: So I'm like, well, they do it all the time. You know, why couldn't I do this? Why can't I figure out, you know, the what's the secret sauce in in construction? And there is none. It's very simple stuff.
As long as you have the right tools and, you know, read the right book and have the right mentor, you can get it done. Yeah. So I took his, you know, advice, and and I ended up buying an REO. I had saved up some cash.
Steve: Oh, before we get into that Sure. There was a I I mean, it wasn't, I imagine as simple as just switching gears. Like, alright. I no longer do some prime. I now flip houses.
Like Yeah. There must have been, like, a, like, holy crap moment.
Beau: Yeah. When every bank I worked with was going out of business and every title company was going out of business, you know, there was a lot of red flags there. And so I was able to kinda just pivot from doing subprime loans to loan mods.
Steve: Mhmm.
Beau: I did those for a very short period of time. And while I was doing loan mods, which wasn't very fruitful, that was kind of a shaky industry right there.
Steve: Bang your head against the wall.
Beau: Oh, it was it was a mess.
Steve: Yeah.
Beau: But it was during that time of pivoting that I was incorporating, you know, the the learning aspect of flipping homes.
Steve: And So you didn't have, like, this kind of, like, crash moment. Like, you saw this, like, alright. We're changing directions.
Beau: Oh, I had to. Yeah. No. I mean, the the thing was, it we were seeing that some of our wholesale lenders were dropping off. Greenpoint, ABC, everybody was dropping off, and we all knew that it was only a certain period of time before we were next.
Steve: Yeah.
Beau: So we were able to, you know, kind of plan. You you just didn't just wait until you got kicked off the ledge.
Steve: I mean, I think most people did,
Beau: Oh, no. That's not me. You know? I I I was concerned about my next paycheck.
Steve: Mhmm.
Beau: So it was when they shut our doors, I had already identified working with a loan mod company. Mhmm. And so I immediately stepped over there and started doing loan mods and, you know, closed a few deals. But in the meantime, I was learning about flipping houses. I was learning about the construction.
Steve: Very quick pivot for you.
Beau: It it was. I didn't just sit on my couch, you know, you know, rolling my thumbs, figuring out, you know, what's next. I I had to make moves.
Steve: Okay.
Beau: And that's what I did.
Steve: Alright. So then you figure out the ARIO. Or you you so you got some money in the bank.
Beau: I did have some money left
Steve: over there.
Beau: Start buying
Steve: and you buy your first ARIO.
Beau: Yeah. Mhmm.
Steve: So what'd you do then?
Beau: So, I actually did all the work myself. So I Literally. Literally. Physically.
Steve: You did the work.
Beau: Physically did all the work. Okay. There was one thing that I didn't do. I didn't fabricate the granite. Okay?
But I did the flooring. I did the paint. I did electrical. I did the stucco. And I started incorporating some some friends, you know, that were contractors and getting their advice, and they did help me out occasionally.
But this is something that I needed to learn myself.
Steve: So like quality work?
Beau: It well, it passed all the inspections, and it sold relatively quickly. Yeah.
Steve: I mean,
Beau: when I flipped on the lights, it did buzz a little bit inside that home.
Steve: Well, I'm just asking because, like, I know myself. If I were to go even today with what I know Yeah. I would probably still die. Like, I would either, like, get electrocuted or
Beau: Oh, I got electrocuted for sure. Yeah. Absolutely. And that's just part of the process. But what I needed to identify was the cost and time associated with each trade.
Steve: Mhmm.
Beau: Because with contractors, as you know, you'll get a bid for 5,000, and then doing the same job, you'll get a bid for 50,000. Mhmm. And you're like, where is the truth here? You know? And and these contractors, there's no set rules on how much they can charge.
Yeah. And so I needed to identify the time and resources associated with everything, with installing cabinetry. How much were the cabinets? What was involved? Mhmm.
Right? The whole what's behind the wall. Right? You know, you get a contractor in there. Oh, well, we opened up the wall and we found now I was like, hey.
There's not anything back there other than a copper or a pipe.
Steve: Anything that's like a lie?
Beau: No. They're so honest. I mean, I've never met such an honest person.
Steve: That one. I have fallen for the, hey. We went up the
Beau: the wall, and, like, there's some things here. I was like, I don't wanna hear about it. Let's fix it. Well, the thing is, now I know what's behind that wall. Right?
You know, there's some Romex. There might be some PEX or some copper piping or whatever. You know? But you can't pull the wool over my eyes because I've I've done it so many times, over 2,500 transactions now. But before, you know, I needed to learn, and so I did.
And and it wasn't like I learned everything within the first three houses because that's what I did is I physically was hands on the first three, and then I started hiring out and and getting a team to do it. Yeah. But then I I just knew what to expect. I knew how much they should be charging me. I was able to calculate.
Okay. You're gonna spend ten hours on this, but you're charging me $3,000. Like, tell me where you're worth $300 an hour or more and because the materials are $50. Yeah. Like, you're you're an attorney here?
Like, what where is this cost coming from?
Steve: Mhmm.
Beau: And so then I was able to negotiate, which is one of my strong suits, not only in acquisitions, but working with contractors and and reasoning with their pricing. That was that was probably the most important aspect of of learning.
Steve: Okay. So 2,500 houses. Yeah. But the first three, you did on your own.
Beau: Did, 90% of it on my own. There were some things I wasn't able to do, like the the granite fabrication. I just you know, I tried to do it. My my seams were awful. And Oh,
Steve: so you did try it?
Beau: I did try. Yeah. But then I quickly you know, I ruined one slab, and I said, alright. We gotta get somebody else in here.
Steve: Alright. So then how long do you continue down this road where you're exclusively flipping?
Beau: Oh, I think, after the first flip, I made a $175,000, and I said in a downturn market.
Steve: $175.
Beau: Yeah. On that one property. On your first flip. On my first flip.
Steve: In a bad market. Yeah. That's pretty remarkable.
Beau: It was. It was great. Yeah. So I I How do
Steve: you attribute that to
Beau: you? Buying well, buying at the right price. Right? Because it literally, this was in the same neighborhood that I was doing loans on these homes for over half 1,000,000. And here, this house was for sale for 130,000.
So I was able to buy, renovate, and sell this for far under what these homes were selling for previous to the to the downturn. Mhmm. So people were saying, oh, well, I'm getting good deal on a home that's already done. So even the market was declining and it was in a recession and there was tons of REOs, people were still able to see the value associated with buying this fully renovated home under what the market was calling for just months before.
Steve: Right. Yeah.
Beau: Got
Steve: it. When did you add an adjustment to your strategy? Or, like, how many years or houses were you flipping just flipping and not doing anything else?
Beau: So that's all I did. I mean, I mean, literally, I flipped my first house, and that's all I was focused on was creating relationships, maintaining relationships, you know, and and starting to flip homes.
Steve: So I guess where I'm going with this is that you have a you use a different mechanism.
Beau: Oh, yeah.
Steve: For lending.
Beau: Oh, yeah. So so this is what happened. Mhmm. I started getting the attention of friends. Right?
Because real estate investing and and flipping homes is I mean, everybody likes it. That's why there's 50 different HGTV channels showing people something that they can't afford to do. Right? But yet people still watch it. Mhmm.
People still are engaged in this. This is popular. A real estate expert. Everybody is, but, no, not many people participate in it. Right.
It's just too expensive. Mhmm. So my friends, when I started doing this, I said, Beau, what are you doing? Like, this is amazing. This is awesome.
Okay. I said, alright. Well, if you wanna do it, quit your job, cash in your four zero one k, roll the dice, and let's see how you do. And they're like, there's no way. There's no way.
I'm, you know, I'm a doctor. I'm an attorney. I'm, you know, I'm auto mechanic. You know, I have to do this. I have to maintain this income for my family, so on and so forth, but I would love to do this.
And I said, okay. Well, how about you do it with me?
Steve: Mhmm.
Beau: At the time, I was getting hard money loans for, like, half the purchase price. I was having to come up with the other half plus the construction and so on and so forth. I said, you come in with that cash. I'll come in with the first, half of the house. I'll handle everything.
I've learned how to do it. I I I have the special sauce here. Mhmm. Let's let's do it together. And they agreed, and we did it several together.
And and pretty soon, I had more friends, and they were making more money. And now I have 6,000 friends. Right? Mhmm. And I needed to implement some technology behind this because pretty soon, you know, after, you know, let's say, a 100 friends, you know, wanting to participate, they're asking me, what's the status of the house?
What's next? When's it gonna be listed? And I had all of the answers, but I was spending most of my time answering emails rather than being on the job sites or looking for inventory. So I had to create some sort of technology to keep everybody on on par, everybody up to speed on everything that's going on. So I created an app that showcased some of our flip opportunities for my friends to participate in.
So it would be showcased on the app. They would have the opportunity to say, hey, Beau. I wanna invest in this property. They would list how much they wanna invest, and we would flip the home together.
Steve: Mhmm.
Beau: Now this was before I started fractionalizing it with many people.
Steve: So the app came first before finding other ways to create a creatively fund your deals.
Beau: So the app well, no. The app came after because it was it wasn't functional to to operate with all of these investors.
Steve: So then let's talk about when you realized there was another way to fund your deals. Right? So so you started off with, friends and family. Yep. Right?
They're they're funding half is what I'm hearing.
Beau: Yeah. Exactly. Yep.
Steve: What were the terms you were negotiating or offering at that time? Hey. You fund half my deal.
Beau: You get half the profit. $50.50. It was a Straight $50.50. Straight Extremely higher. All the all the bills were paid.
I take half. You take half. And and that was it.
Steve: But they were funding half of it?
Beau: They were funding half of it.
Steve: They're getting half the profit. You're very generous.
Beau: Yeah. I I know. I know. But that that's the thing, and that's what became so attractive. And and we continued that model even though the the hard money loan I was getting became more like 80%.
They're funding 80% of the project cost than 90%, yet my relationship with the investor stayed fifty fifty.
Steve: Mhmm.
Beau: And I call this a hyper leverage where we're utilizing, you know, institutional funds to cover the majority of the cost. Yet my relationship with the investors stayed the same. Because, really, for me, it wasn't an adjustment in cost. It was actually saving me money. But I was still making 50%, and they now were coming to the table with less but still making 50%.
We call this the b 52 method where Bellwood makes 50% of the profit or Bellwood's investors make 50% of the profit, yet they're only coming in with 20% of the cost.
Steve: Mhmm.
Beau: Because I'm getting 80% LTC from the bank. Right? So that remaining 20% my investor would come in with, yet still getting 50% of the profit. And it was that leverage that gave us the higher than normal or average ROI, 25%, 50%, 60%, 100.
Steve: So by this point, you're no longer coming up with a 50%?
Beau: Yeah. Yeah. The the lender's coming in with 80%.
Steve: With a 20%. The hard money lender
Beau: comes in with 80%. Mhmm.
Steve: And then everyone's taking care of the money side, but you still split everything fifty fifty. Yes. So at least now your money's off the table. Yes. So still very generous.
I don't know a lot of people that offer those terms.
Beau: It it is very generous. And and sometimes, you know, a project will go over, you know, time frame or go over budget. Because we give 50% and we take 50%, we're actually able to, shift to that in the investor's favor. So if we do go over time and budget, we could say, well, now our investors are gonna take home 70% and we're gonna take home 30. Our whole goal here is to empower the investor and create a model for them to win.
Because you don't have a very successful real estate investment company, especially one that's new and fractional like we do if your investors are losing.
Steve: Oh, of course.
Beau: So that's that's what we wanted to do. It's our number one goal is for the investor to win.
Steve: Yeah. But, I'm just looking at this, like, it's above and beyond. Right? Like, I think, because when I was, early on my career, I did have to use friends and family. Right?
Money. And it was $50.50. Yep. Right? But over time, I was like, hey.
Look. Like, I'm finding the property. Mhmm. I'm dealing with the the contractors. Right?
I'm marketing the property. Like, I'm the realtor listing these properties. Yeah. Right? So not only did I find it, negotiate it, but I took care of it, and then I listed it.
And for all that, I'm keeping 70. You're keeping 30. And that's kinda where we were until later on. I just got someone to fund a 100% of the deal and, even better terms for myself. Right?
Not not for the investors. And so I went with the private money route where they were just funding everything in extremely favorable terms, and they were good making, 10% interest. Sure. Right? Your complete opposite end is, like, how can I help you make as much as possible?
And I'm guessing for you, this is volume play.
Beau: Exactly. 100%. Yeah. We're trying to democratize real estate investments. We want Bellwood to be the number one platform in the world for people to invest in real estate.
Mhmm. That's it. Not just boat, become rich, and be on a boat in The Bahamas and, you know, sail off into the sunset. No.
Steve: Boat on a boat does sound good,
Beau: though. That does sound great. And and that is a part of the plan, but the plan along the way is to democratize this. Mhmm. So it's ubiquitous when it comes to real estate investments.
You know, when people are looking up values, Zillow the home. When you're when you're trying to make copies of a paper, get it Xeroxed. Right? When it comes to, investing in real estate, oh, that's a Bellwood home. We should we should put that in Bellwood.
Right? When you're identifying inventory for us, because we have another aspect to our app, which is allowing people to find property, put it on the app, we skip trace, find the owner, they make money for finding it. But not only that, let's just say they're in their neighborhood and, you know, the the neighbor down the way is their home is in disrepair. Neighbors can identify that, oh, that's a Bellwood home. Let's, as a community, get together, put it on the Bellwood app, renovate that home, all participate in that ROI, and improve the community at the same time.
Steve: So you're trying to turn your company name to a verb. Yes. I love that. That's an awesome, awesome vision. Yeah.
Okay. So, so you're you're you're flipping houses. You're I mean, along the way, I mean, how many houses are we flipping at a point? Hey. My name is Brian.
I'm a real estate investor. Ian's sales training has helped me buy more houses at a deeper discount. Most recently, Ian helped me reframe a question which resulted in me buying a house for less money than other offers the seller had on the table. If you're considering sales training, I don't think you can go wrong with Ian's. If you like what you just heard and would like similar types of success, text close to 33777, and we'll see if you qualify to join objection proof selling.
We're taking good sales reps, and we're making them objection proof.
Beau: Jeez. A highest point. Mhmm. So 2022, we were flipping about 75 at a time.
Steve: 75 houses.
Beau: At a time.
Steve: At a time.
Beau: Mhmm. Yeah.
Steve: Freaking a lot of houses.
Beau: It's so much. Yeah. It's so much.
Steve: And and across what, Across The US, 13 states. 13 states.
Beau: Yeah. We're international now. We're in Greece as well. So we've we've proven that we can take this across state lines. We can take it, you know, out of the country.
It's international. Mhmm. And we found that we have a plenty of investors from Australia, The UK, Italy, They all love real estate. Some wanna invest in Beverly Hills, and they may be in The UK. And Mhmm.
People in Beverly Hills wanna invest in Greece. Right? So it's it's it there's no borders there.
Steve: 75 houses at a time.
Beau: Yes.
Steve: How in the world do you manage that? Particularly across multiple state lines.
Beau: Well, I did have a full head of hair before I started this. Okay. So, so what we do is we call on, contractors in that area. So we're partnered with Home Depot, and we've had this relationship for a long time Mhmm. Where we're able to use their contractors.
Okay? So when you go to Home Depot and they say, well, we'll install your flooring, we'll install your HVAC, we'll do all of these things. They're using local vetted contractors.
Steve: Mhmm.
Beau: So what we have access to are those contractors. Mhmm. So we can, you know, create a relationship, establish, you know, a system with them, and and it actually can be financed through Home Depot. We've stepped back from that because there's a little bit of a price tag adjustment with with when you stamp Home Depot's name on there.
Steve: Sure.
Beau: But we still have access to those contractors. So wherever you see Home Depot, we have access to those folks. Now they have their own set of, management that they, you know, use. Right? They're managing subs.
They're managing the the everybody associated with flipping that home. So it's not really us that have to manage every step of that property. What we created is GC management.
Steve: Mhmm.
Beau: So we use different CRMs and builder trend and whatnot to manage the contractors, not necessarily manage the subs. Mhmm. So that's a lot easier to manage than than just, you know, did we get the drywall guy in there? Did they do their job right? Are we ordering all the materials?
Right? That that just becomes too much. Yeah. So it's the management of the GCs that allows us to scale and and do a lot of homes at once.
Steve: Does Home Depot then source the general contractor? Yep. And then they've got to manage their own subs?
Beau: Yeah. The GC manages their own subs.
Steve: But you're finding the the the GCs from Home Depot?
Beau: Either through Home Depot or, you know, some of our other resources. Got it. We work with realtors, tons of realtors nationwide. And so we'll be able to call on them. Hey.
Who's a good GC in this area? I mean, they're not hard to find. We we have a vetting process. But at the end of the day, it's managing GCs rather than we're not a construction company. We we don't want to be a construction company.
We would just much rather identify opportunities and manage the GCs.
Steve: So then you're saying that hard to find the GCs, and then you have a vetting process. What is the vetting process?
Beau: So making sure that they're above board. Right? All of their license and bonding and everything like that. And then we also reach out to, realtors who have worked with them in the past. So if they're doing new construction, we're we're asking the realtors, hey.
Do you guys have, buyers of these homes reaching back out to you? Is there, you know, lawsuits filed against these people? I mean, it's it's not it's not like recreating the wheel. It's a basic vetting process just to make sure that they're
Steve: That might be basic for you.
Beau: Yeah. Yeah.
Steve: Because you hear nightmare stories all the time, people getting taken advantage of.
Beau: Oh, absolutely. That's part of the reason why I needed to learn what it took to build a home in the first place.
Steve: Yeah.
Beau: Right? And so I'm able to teach our construction management or was able to teach our construction management, and now they know it well, the the cost associated with different, jobs. And so we'll give this out to 15 different contractors, one job, and let them bid it. Right? Now these are all vetted contractors that have shown that they're licensed and and bonded and insured, but each one is going to have a different price.
So we'll send it out to them just same way that we send out our properties to different lenders to see who's gonna give us the best rate. We do that with contractors as well.
Steve: Yeah. Got it. And then you're saying that they're not, hard to find. So then, I think that a lot of people when they're starting to flip, they are hard to find. At least, how how to find one that's, vetted?
Beau: Yeah. Yeah. So so, again, call on your local realtors.
Steve: Mhmm. You
Beau: know, the people that are selling these fix and flip homes because it's easy to go online and identify a fix and flip. Okay? So go online, look at a property that's in a mature neighborhood that looks brand new. Okay? It's obviously not a brand new home Right.
But it's fully renovated. Call on that realtor and say, hey. I love the renovation. Who's the contractor that did this work? Because I'm thinking about buying a property in this area.
I would love your help, by the way, because realtors don't just give up information freely. Mhmm. They want some something in return. So if you're able to put that carrot out in front of them and say, hey. Maybe you can help me find houses, but in the meantime, I'm also looking for contractors.
Now realtors are so resourceful. You know? In the day and age where everybody's trying to circumvent the realtor
Steve: Mhmm.
Beau: We call on them for their resources. Yeah. So and and that is identifying contractors that they've worked with. So they'll say, oh, yeah. This was, so and so.
They do a bunch of flips in the area. I've worked with them for many years. Great. We would like their information, and you find the house. They'll do the work, and we'll create this great relationship.
Steve: Right.
Beau: So that's that's it. Find a mature neighborhood, homes built in the, you know, twenties through the nineties, you know, anything over the nineties, you know, early well, I'm kinda dating myself right now. So I would say before, when I started flipping the homes, flipping homes, anything in the nineties, I would say that's too new. Right? That that's not ready to be flipped.
Now the nineties, that's a 30 year old home almost. So so anything, you know, in these communities, Lennar or KB, you know, built, you know, post 2000, that's not really a flipping neighborhood quite yet. But anything nineties and less, go into these neighborhoods, identify the homes that look perfect, that look really well done, and then call on those realtors for their resources. And and don't recreate the wheel. Right?
There's people that are flipping homes. We're not the only ones. There's people that have perfected the art or do really well. Mhmm. We wanna call on their resources.
We wanna see what they're doing right. And the source to do that is by going through that realtor.
Steve: Got it. Another thing you're talking about is you're you basically became GC management
Beau: or Yeah.
Steve: GC managing organization. Yeah. What is entailed in managing GC? Because, again, that many houses, that many states, international now. Mhmm.
There's gotta be some processes that you figure out along the way as best practices in managing GCs.
Beau: Yeah. Yeah. So so it's all about accountability. And so we have our app that also showcases our investors, the progress of the home. So they have to send in videos.
They have to send in pictures. They have to send in a a summary of what's been going on. We also geofence them too when they're when they are on the job site. Right? So we know if there's people there, we have cameras on the job site.
We we set up ring cameras. So we know when people are there, we know what they're doing. We have everything. And then we also have our lenders who send out inspectors as well. Right?
Because we work in a draw fashion with some of these lenders. We do the work first. It's inspected by the bank, and then they'll reimburse us. So we have so many different eyes on these job sites to make sure that they're moving forward, not just us, but the lender. So it's accountability.
It's it's video, camera, pictures, summary, geofence. It's all uploaded into our app. So once we, verify all this information, then it goes right to the investor, and they can see what's going on.
Steve: How are you geofencing?
Beau: So we use it through our through our app. So they have to So
Steve: all the contractors have to install the Belmont app.
Beau: Belwood app. Yeah.
Steve: Belwood app. Yeah. Yeah. And then that is how we know they're actually on-site
Beau: working. Site. Yeah. Exactly. Because I've been fooled before.
Okay? We had a job site in North Carolina where we were getting great pictures, a lot of feedback, but it was of a different house. Right? And so, and our lender at the time wasn't doing inspections. He was just saying, send us pictures, send us videos, and we'll approve your draw.
So we're going through it. We thought the house was done, turned out.
Steve: Looked great.
Beau: Yeah. No. It was wonderful. And then, we had the realtor go out there to, you know, pre list. And he's like, what are you doing?
You know, this house is not even near ready to be done or to be listed. And we said, what are you talking about? We have all these great pictures and we've had and the guy was a scam artist. And it took us for about 200,000.
Steve: Really?
Beau: Yeah. Wow. Yeah.
Steve: For that property?
Beau: For that property.
Steve: One property.
Beau: One property.
Steve: Alright. So did you find the guy?
Beau: Yeah. I mean, he he can't squeeze blood from a turnip. He was just a bad character. He ended up getting arrested and stuff, but, you know, just a lesson learned, a valuable lesson learned. Yeah.
Steve: Yeah. Expensive. So is that when geofencing started?
Beau: Yeah. So that that was you know, you you encounter these these, hurdles. Right? And you have to find a way around them. You know?
You have to found find a way to overcome. And so that was one thing. We're like, well, how do we know that they're there? And our app developers are like, oh, you can geofence them. What is this?
You know? They're like, well, you know, it it identifies where the phone is. You can put a fence around it. You can set the parameters. And if they leave, you're notified.
I'm like, this is amazing.
Steve: Yeah. And so It's absolutely amazing. Yeah. I haven't heard anyone use geofencing. I I could just be behind the times.
I haven't heard anyone using geofencing to ensure work is being done. Like, we have the photos. We got the videos. You got a guy driving by every day to make sure. Yeah.
Geofencing is a new wrinkle, which is absolutely brilliant.
Beau: Yeah. Yeah. We wanna make sure they're there. Right? Yeah.
And and not just hanging out. Right? So we have the the cameras ensuring that they're actually moving around doing the work, the pictures, the videos, and then that they're there.
Steve: Mhmm.
Beau: You know, that they're they're not leaving, going seen by the camera and then leaving the job site going to a different job site, you know, because that's a lot you know, some other contractors, they'll do three or four projects at a time, and they'll go show face, do a little bit of work, and then go to their other job sites. Yeah. We wanna ensure that they're spending all the time there.
Steve: Who is monitoring this activity in your company?
Beau: Construction managers. Yeah. Yeah. How
Steve: many of those do you have?
Beau: Jeez. Right now, we have about six.
Steve: Six. Mhmm. And they're kinda like watching the cameras, checking the notifications.
Beau: Yeah. So our field manager, you know, he has it on his phone. So he's constantly going through and making sure that people are on-site, and there's notifications. So, we'll get notified if there's movement, right, at the job site, you know, what time that movement started. So we'll say, okay.
Great. You know, 759, there was movement at 1855 Loma Vista. People are there. Mhmm. Okay.
The Eric, one of our field managers, will go online. Yep. Yep. People are there. Great.
You know? Yep. He's on job site. You know? And we can kinda gauge how many people are there, do our morning phone call with them, making sure that that they have everything they need.
But, yeah, there's several layers of Yeah. Of security there.
Steve: I imagine you've gotten really good in dealing with squatters, though.
Beau: Oh my gosh. Yeah. So that's another thing. I mean and that's just part of the business. We had we had one property in Sacramento.
It was a lot of lessons learned. It was it was on the news, actually. It was called, the debacle on Delma Way or something like that. But, anyways, we finished construction, listed the home, sold it really quickly, closed on Friday. We moved all the staging stuff out on Saturday.
Sunday, squatter moved in. Monday, buyer, own new owner came with their moving truck and said, what are you doing in our home? We just bought this.
Steve: Mhmm.
Beau: And the guy is like, what are you doing in my home? Mhmm. And so we immediately called the police. We're like, this this is not the guy. He he didn't buy the home.
And he's like, well, I have this lease agreement here
Steve: Mhmm.
Beau: Saying that it is mine. Had my signature on there and everything.
Steve: Your signature?
Beau: Yeah. Yeah. I mean, you know, these guys are really creative. So he had a fake, lease agreement. Anyways, there was a standoff.
You know, the cops were like, you need to get out of there. And the guy's like, no. The guy had his child, like, hostage. It was crazy. All the way up until 01:00 in the morning, there was a helicopter.
There was SWAT. Everybody they're like, you know you know, it's going down. And the captain came up to me and goes, hey, mister Belmont. We're gonna have to pull out of here because, you know, this guy's gonna end up getting killed. This is a this is a civil issue.
I said, shoot him. Go ahead. Go ahead. And they're like, no. We can't.
You know, I know you like that. I'm like, you know, I'm, you know, Christian. I wouldn't like him to be killed, but
Steve: but he
Beau: was shoot him in the knee. Right? Get him out of there. But, they said, you know, it's a civil issue now, Beau. You cannot, you're gonna have to handle this through the courts, you know, through an eviction process because we we just can't do anything.
We tried our best. And so then I was stuck with a tenant whom I had never met.
Steve: Was it your tenant or their tenant?
Beau: No. It's my tenant now. The the the new owner had their loan rescinded and, like, backed out. Like
Steve: They undid the sale.
Beau: They yeah. They undid the sale. Like, they called their lender and said, we're not we can't buy this home. Somebody else moved in. Like, so the it was all reversed.
I was stuck.
Steve: I've heard of that happening before.
Beau: It happened. Yeah.
Steve: But when it had to do with, like, fraud.
Beau: Yeah. No. It happened. Yeah. No.
It definitely happened.
Steve: Okay. So this is your tenant now?
Beau: So now it's my tenant. And so I had to serve them a three day pay or quit, then a thirty day eviction notice. Right? And and I had to literally treat this guy as if he was my tenant and abide by certain laws. Like, oh, this is broken.
Oh, the HVAC isn't working. It's so hot in here. Like, this guy was, like, taking it the full stretch. Like, he was, like, my real tenant. And The nerve.
Steve: Freaking nerve.
Beau: Oh my gosh. I was I was umming. Right? And, in any event, obviously, this guy's unstable. He ended up running over the neighbor in his vehicle, got in a dispute, and, like, hit the neighbor.
The neighbor was fine. Thank god. But he got arrested. And we we were told by the other neighbor, hey. The guy's out of there.
Because we told all neighbors what was going. Everybody knew. Right? There was a whole standoff.
Steve: Yeah. The helicopter was
Beau: probably a big clue. That was a giveaway over there. So, they called me and said, Beau, he's out of there. We rushed down there just in time to keep his dad from entering. His dad was part of the scheme too.
They do this. So they would bounce from house to house doing this fake lease agreement. So the dad showed up while we're dumping the stuff out of his
Steve: house.
Beau: He's like, you can't dump all that stuff. We're like, you can pick it up at the landfill. We dumped everything in the in the truck. I mean, this guy fully moved in. Pictures on the wall.
I mean, everything. It was a it was a he really trashed the house. But we got it all out of there. We called the police, got had the dad removed, you know, from trying to enter in the home, called the old buyer back.
Steve: So
Beau: we got it back. You know, you wanna move in? The guy's like, no way. He was like, we're we're done. We've moved on.
Repaired the home, got it back on the market, and ended up selling it. Mhmm. But it was, you know, and I this was during COVID. This was in in the street. The home address was on 2020 Delma Way.
And that was such a crazy year. I should've known before I bought that house. It was 2020. I'm like, there are too many red flags here. But it was a learning experience.
Steve: Well, what did you learn? Like, what what do you modify Yeah. In your process?
Beau: Yeah. So I one, I have cameras. Always cameras.
Steve: You didn't have cameras prior to that?
Beau: I didn't have cameras in there.
Steve: So that was what brought cameras on
Beau: That was what the job site. Yeah. Yeah. Well, that brought cameras on for just security purposes. Right?
You know, we had lock boxes on there. We kept everything tight. But now we needed to ensure that after construction, people still stayed away Mhmm. Didn't go in those homes. So we we had, that implemented, and and and that was smart.
We we didn't you know? Now we don't ever go without cameras. Like, that is very important. But then on top of that, we actually have people stay in these houses. So, you know, there's always a contractor who's willing to stay or has a worker that's willing to stay.
Depends on the neighborhood. Mhmm. Right? You know, some neighborhoods are better than others, but we'll have them stay. We'll pay them a little bit, and they'll they'll be if it's in a sketchy area of town, if it's not in the best area, we'll have them you know, some guy, like, stay in the driveway and, you know, so our appliances don't get stolen.
I mean, we've had it all happen. I mean, it's it's
Steve: been rough. The craziest story you've you've dealt with then?
Beau: As far as a squatter is concerned? Yeah. No. No. I have had death on the job sites several times.
So a neighbor we this one was in Corte Madera. And, unfortunately I mean, kind of a sad story. The neighbor was terminally ill and, older gentleman and, just couldn't take it anymore. And, I actually had workers staying at the home because they were traveling to to to work on it, and they were doing miscellaneous things. And and the gentleman from next door decided to take his own life.
And so he went into our garage because he didn't wanna do it over there at his house and did it in our garage. And so my the workers woke up to a gunshot.
Steve: Oh, because they were there?
Beau: They were inside the house. It was, like, 02:00 in the morning. Right? And, you know, they're staying there. Another security, you know, measure.
You know, I had them staying there, and it was twofold. They they would stay there, get some work done. You know? So it was it was built in security. They woke up to a gunshot.
They go out into the garage. They're scared as heck. Yeah. And there's a a guy that's passed away in the garage. So police called, ambulance called, and so they pulled all the workers out of the house, put them all brought them all down to the to the police station, you know, interrogated them all, and, they ended up getting released.
And, you know, some of these some of these guys, you know, their their maybe their documentation wasn't they were just so worried. Right? You know, I I don't I don't hire them directly, but, you know, there was there was some concern there. Yeah. And they were just so worried.
And, but the the gentleman's wife came over and and told the the police, hey. He was terminally ill. This is that's his gun. He did this himself. You know?
And so they let everybody go and go back to the house. And but the guys wouldn't stay there anymore. They're like, nope. We are done. Like, the they they tried to do some, like, religious, like, ceremony, like, you know, and they, you know, they're some religious, you know, Catholic guys.
And they're just like, no. We can't we can't stay here anymore. Yeah. Like, this is too much bad juju.
Steve: What's the craziest thing you caught on camera?
Beau: Oh, caught on camera? Just, you know, a lot of, break ins and drug use. We've had prostitutes, use some of our properties. So Sacramento, we had, a new construction. And dealing with red tape in the city and everything, we were going from septic to city, and it was just this project was held up.
In the meantime, this is not the most, pleasant area of town. Mhmm. And so we would have, you know, transients and prostitution show up, and and they would go through the house. And we would have these cameras kinda hidden, right, so they can just be torn down. And, we we caught some people working, you know.
So there was working, drug use.
Steve: Mhmm.
Beau: And that was always an interesting, you know, video to see, you know, not the most pleasant. Yeah.
Steve: Yeah. So up to 75 at a time.
Beau: Mhmm.
Steve: At some point, it became challenging having one person, one lender or property. Yes. When did that occur?
Beau: So I've always been I've always liked competition. Right? I want people to compete for my business.
Steve: I mean, 15 contractors and, like, however many lenders. It sounds like it.
Beau: Yeah. Absolutely. So so when we, you know, present not only this offer to our investors, we present it to contractors and lenders. Right? And everybody the same way contractors all come up with different pricing, same thing with lenders.
I mean, I might be getting a 10 and a half, and some other lender might be offering me eight on a fix and flip. So it just depends on the relationship and and what the what we've done with them in the past. Mhmm. Right? So and then some lenders really want our business.
So they're willing to go above and beyond, cut all their junk fees out, no points, and, you know, and so we want to explore all those options. Right? And so so we work with with probably 20 different lenders, and we send it out to them. And you who comes in with the best pricing gets the deal.
Steve: Mhmm.
Beau: You know, it's that competitive nature
Steve: Yeah.
Beau: That that gets the deal.
Steve: But I'm talking about even just like the private lenders. Right? The friends and family.
Beau: Oh, yeah.
Steve: At some point, it didn't make sense to have one person per deal.
Beau: Oh, yeah. Yeah. So so we were getting so much attention. Right? So one friend lend to 10 to 20 to 50.
I mean, we had so many people wanting to flip homes.
Steve: Mhmm. But
Beau: we were only doing one property with one person. So we would have so many people on the sidelines saying, when's your next property? I'm like, well, we have a 100 of you right now, probably in three years. Like, I don't I mean, I can't tell you. And so I was like, well, what are we gonna do about this?
And it just so happened to me, I was going into my escrow officer's office, and I saw a stack of, files on her desk. And I said, hey. You're really busy. I mean, that that that's a lot of files. You know?
She she goes, well, that's just one house or one apartment. And I said, why are there so many? She goes, well, those those are all different investors. Those are all different lenders. And I said, you know, they're all on the deal shows.
Yeah. They all have a deed of trust. And there's 17 of them. I said there were 17 deeds of trust. She goes, yeah.
I said, how many can you have on a property? She goes, as many as you want. It's just gonna cause me hell. It's gonna be a lot of paperwork, but you can have as many as you want. I said, so I could have a house and have 20 different investors on there all secured with a deed of trust.
She goes, yeah, theoretically. I said, unlocked. So now I was able to take this 20% cost, right, that down payment, the lender's covering 80%. That 20% was somebody coming in with a $100 or somebody coming in with $50. Now it's taking that 100 or $50,000 investment and then saying, hey.
10 people that have been sitting on the sideline rather than one of you coming in with 50, how how about each of you come in with five? All 10 of you? Now you all get to participate in this flip. You all get a deed of trust, and you don't have to stand on the sidelines anymore, and you get to participate. Yeah.
And they loved it. It was now affordable. It was a security. Right? They had that deed of trust.
And
Steve: It was not security. Right? Secured.
Beau: It was secured. Right. Yeah. So, yeah, don't wanna get in trouble with the SEC.
Steve: That's right. Mess around with SEC.
Beau: Yeah. It was secured. Right? So it was secured to the property. I meant security as well as as far as, like, securing their their investment.
Right? Yeah.
Steve: Safety and security.
Beau: That's what we're talking about. Exactly. Yes. Yeah. Yeah.
Just for clarification here. So so they would get that instrument. Right? Mhmm. And and that made them feel good.
Right? Okay. Now, you know, this property can't be sold or traded without this being satisfied. So they were happy about that. Then, I was able to just capture more folks.
Right? Now instead of a 100 people sitting on the sidelines, I had nobody sitting on the sidelines. I was able to implement this across our portfolio. Mhmm. So now we've gotten up to, like, 500 people on one property.
The the Kanye West House has almost 500 people invested in it.
Steve: So you got all these people
Beau: Mhmm.
Steve: And you have to keep them all when when did you figure this out?
Beau: To fractionalize it. So when I literally had that paradigm shift, when I saw that stack of When
Steve: was this?
Beau: Oh, this what year was this? This was 2021.
Steve: So after that, it was off to the races. Like, every house.
Beau: Every house had multiple people on there, yeah, instead of just one. And it became affordable now. Because having 50,000 or a 100,000 or $200,000 is a lot of money for anybody in The United States. So how is this fully gonna become democratized when it calls for a $50,000 investment? Not everybody has that.
I mean, there's, like, very few people. But there's a lot of people with $500 or a thousand dollars or $5,000. Now we've brought this to the masses. Yeah. And so that fell in line with my overall vision of Bellwood to bring this to everybody.
Steve: Mhmm.
Beau: Not just those with $50 in the bank account.
Steve: Yeah. So at which point then did this become a nightmare
Beau: Mhmm. For you? Mhmm. Well, it became a nightmare. So I deal with a lot of investors, and it's always the investors that have the smallest investment with the biggest voice.
Yeah. Right? You know, if if the project is taking longer or or over budget or, you know, any multitude of things that can happen, especially in a market that's slow.
Steve: Yes.
Beau: You know, I'm getting a lot of pushback. You know? I'm like, they're like, why isn't this home sold? I'm like, well, it's, basically every home right now is going, longer than, you know, it's I don't control the real estate market. Mhmm.
You know? So it's frustrating right now with the market in its current condition. I have just an investor today who's, rather animated. And it's like, you know, I want my money back and I wanted this. And I'm like, okay.
Well, you know, we get our money back when we sell these properties. It's in the paperwork. It's in the guidelines. You know, it's not an ATM machine. This is real estate.
And they're accredited investor, but they just couldn't can't wrap their head around a slow market.
Steve: Mhmm.
Beau: So, you know, this is part of the process of owning a a real estate investment company or managing one. You're gonna deal with investors that are a headache. You're gonna deal with investors that understand market conditions. So it's just part of the animal. Right?
You know, it's like it's it is what it is.
Steve: When did it become overwhelming to update everybody?
Beau: So, when I started doing, you know, like, four or five projects at once, you know, when I and it was just with one person. So I was doing five, six houses at a time, and I would just have one investor on there. And they were constantly, like, asking good questions. It wasn't like they were pointless questions, you know. What's the status?
What's the budget like? You know you know, can I go visit the house? All of these things. I started seeing myself answering more questions and that that were a similar question across the board. They want transparency.
They wanted to see what was going on. So I was like, what's more transparent than pictures and videos? Right? So they can physically see what's going on with the project. They can ask questions on the app.
So it was when I started getting inundated with emails that I finally reached out to, a friend of mine who is also an investor. I said, is there any way that I can create an app that automatically shows people what's going on with these properties? So they don't just email me all the time.
Steve: Mhmm.
Beau: They can just log in to this app, and it shows them what's going on. And on top of that, when I have an opportunity, it goes on the app, and they don't have to ask me all the time, Bo, when's the next house coming up? Bo, do you have any opportunity? No. It's on the app.
There it is. You can offer on it. And by the way, once you do that, it gives you consistent updates. Mhmm. So that was, like, the inception of the Bellwood Investor app was me getting inundated in, you know, 2021, you know, with with
Steve: two saying with six, six properties with one investor, I'm thinking, like, five properties with 30 investors each. I would have definitely hit my breaking point.
Beau: Well yeah. So but I was hitting my breaking point with just six. Like, I mean, I wasn't able to focus on anything else other than answering these people all the time. Mhmm. So then, you know, as we fractionalized it and got, you know, ten, fifteen people on a property, then it just, you know, reemphasized the need for the app and how quality it was to have that.
Because now I didn't have to worry about even one investor reaching out to me all the time. All of their answers were were already on the app, and nobody was reaching out to me. So it wasn't ease it was it was actually really easy to scale having that implemented when in adding more people to to the app.
Steve: At which point you say, hey. It'd be a good idea to flip Kanye's house. If you're a real estate investor with a sales team and you're stuck babysitting reps instead of growing your business, this is for you. Right now, your reps are burning through your expensive leads like their practice numbers. They're making costly mistakes you won't catch for weeks, and seventy percent of your potential revenue is walking to competitors because of inconsistent follow-up.
That's why over a 130 operators are now using objectionproof.ai to automatically review every single call within minutes, train reps with AI role play sessions, and never miss another follow-up. Stop watching your competitors pull ahead while you're trapped doing manager work. Click the link in the description and book a call with my team to see how we can help you install a self managing sales team this week.
Beau: I'm still asking myself to help. So, you know, one of the things that I identify are are good opportunities. Mhmm. Okay? And one just fell off my plate.
It was the Woolworth Mansion in, in Manhattan. Mhmm. Michael Schwoe got it. Mhmm. But I was in negotiations with it, but but that was a really good one.
That was at 1,900,000.00. My offer was 35. They were at 37. I thought we were gonna be able to get it down to my 35 mark, but Michael Schvoe came in there and stole it. But whatever.
We we can't win them all. Right?
Steve: Right.
Beau: So, I identified this property, on the Internet. Right? Everybody was talking about this Ondo, and Kanye destroyed it, and I saw it on on, on the market for sale. And and I'm friends with Jason Oppenheim, so I'm like, you know, here's an opportunity here. It was once for sale for $75,000,000 by, his name was, he's a financier, Richard.
I forget what his last name is. But he was sold it to Kanye, and it was once for sale for 75,000,000. Kanye bought it for 57. And then here I saw it on the market for $54,000,000. And I'm like, what's so important about this house?
Like, why is it so expensive? Then I did some homework on on who Ondo was. Mhmm. And then I saw the headlines where he dropped it from 54 to 39. And I said, oh, man.
He needs some cash. There's something going on with Kanye right now. And at the time, he was having some financial difficulties. He was
Steve: This is what the whole Adidas thing backing out? This was before then.
Beau: The I mean, this was, actually, right around that time, actually. You know, he was dealing with some some stuff. He was breaking up with, Kim, and, you know, he was having difficulties with his new wife, Bianca. And so it was just there was a lot going on in his world.
Steve: Phase where he went, like, really antisemitic.
Beau: Yeah. Absolutely. 100%. And and a lot of it was written in the house.
Steve: Oh, really?
Beau: Yeah. On the pillars, he wrote some stuff. I mean, it was it was crazy.
Steve: Yeah.
Beau: So, but I saw one of the factors that we look at are are drastic price reductions. Okay? It's it's one of the signals that we get when we want to offer on a home. When, you know, if it's for sale for 500 and they do a quick drop to $3.90, there's a need for cash there. It doesn't matter the the size of the home.
I mean, there's always a need. So he dropped from 54 to 39. And I said, what about the forties? Like, why didn't you try 45? Like, you went from 54 to 39.
You need some cash. Yeah. And so I I reached out to Jason. I said, hey. My offer is gonna be considerably less than than 39, but I think that there's some movement here.
Something needs to happen. Jason's like, just throw in an offer, man. And it it doesn't matter. He's liquidating a whole bunch of assets. Just just throw in an offer.
I said, okay. I'm gonna throw in an offer. So the offer was 21,000,000. And and and he was like, he's like, there's no way. There's no way.
And I'm 21.
Steve: So $54.39, 21.
Beau: Yeah.
Steve: Alright. Makes sense.
Beau: Yeah. Well, 75 initially. Right? Right. Yeah.
So so I said, okay. Well, it's gonna be 21. He goes, well, he's liquidating a bunch of stuff. He's got a ton of contracts he's signing. Bianca's gonna be signing on top, on behalf of the LLC.
We'll see what happens. He was in Italy. He was liquidating cars and jewelry and and art and a whole bunch of stuff and real estate, and this contract was slid in there. And Bianca signed it Mhmm. On behalf of the LLC.
Steve: At 21.
Beau: At $21,000,000. And so we were all amazed. We're like, no way. I'm like, jeez. I gotta start, you know, you know, raising some capital here.
Mhmm. And so, you know, and it was a no brainer. Right? You know, this is an ondo. There's only one ondo for sale in the world.
Steve: So let's explain what an ondo is. Yeah. Because I didn't know what it was till you educated me.
Beau: Yeah. Yeah. So probably the most the most famous art living architect today is a gentleman by the name of Tadao Ando from Japan. And what he creates is a brutalistic, very simple, but strong structure. And they're all concrete.
And just for reference, he was the designer, or the architect behind, Jay z and Beyonce's home that they bought from the Bell family for 200,000,000 Mhmm. In Malibu. Tom Ford had an ondo in New Mexico, and he sold that one for $40,000,000. If you're selling anything in New Mexico for $40,000,000, like, that's pretty amazing. Right?
Yeah. You know, that's, like, the most that you can buy all the houses in New Mexico for that much. Pretty much. You know, that's that you know, to sell one property for that much and it being Ondo in New Mexico. So so there's just a huge calling for, for his property in the art world.
So it's not considered just a home. It's considered an art piece. A lot of people say it's like a Picasso.
Steve: Mhmm. Yeah. There's a stasher to it. It's not the house. It's the name on the house.
Beau: It's the name on the house. Just because it is I mean, every architect that I've ever worked with that's had the opportunity to visit the home, they're like, thank you. Thank you for letting me see this. Thank you for letting me walk through this property. I'm like, what after this.
Oh, it's it's amazing. Yeah. Anytime you wanna go through it. It's it's it's really great. It is it is a it is an architect that they studied in college.
A lot of them wrote their papers on it because he's living in these he's I don't I don't think he's creating anything
Steve: else now. How many houses is built?
Beau: Oh, I it's not very many. As far as residential, I think it's, like, 40 or something like that. But it's he's done commercial. He's done, not commercial, like, mixed use, libraries, museums, and stuff like that. And, it's it he's he's alive, so people are are able to study him and, you know, just I mean, they feel, like, more attached to Ondo because this is somebody it's like if Frank Lloyd Wright was living right now, people would be able to, you know, just there's it's still producing some stuff.
Like, you know, he's still making statements. He's still making comments. If people are still able to ask him questions Mhmm. Even though he's built some of the most extraordinary structures in the world. Mhmm.
So if there were architects that could ask Frank Lloyd Wright questions right now, then he would probably be the most popular architect, but he's not. Yeah. Ondo is still alive. And so people are just like, this is some of the most amazing architecture, and he's still reachable. Even though he's kind of a recluse from what I hear, he's still here.
So a lot of architects value that.
Steve: Got it. And I think one of the things that you shared with me was that we just went through, not we, but, like, LA. Just went through, like, the whole Palisades fire. Yeah. Who knows what other fire is gonna be happening there?
Yeah. You were saying this house would do just fine.
Beau: Tsunami, fire, I mean, nothing can happen to this house. It it is literally built as if it was going to hold up a a high rise. Mhmm. Like, the the caissons that go down to the bedrock, I mean, they're so overbuilt. I mean, the neighbors, the you know, they're like a 20 inch diameter or 30 inch.
These are, like, four foot by four foot, and there's 16 of them. I mean, this thing is not going anywhere. The only way you could take this property down is by, like, explosives. There's not an earthquake that could mess with it, not a tsunami, not a fire, nothing.
Steve: Well, I think you were you were sharing with me that Tanya was planning on this being his end times home.
Beau: End of days bunker.
Steve: End of days.
Beau: Yeah. Smart move. I mean, it's literally there's nothing that could happen to this. I mean, it I just not a natural disaster that we've ever encountered in this lifetime that could mess with this home. So but all the neighbors would be gone.
Look at what happened to the rest of Malibu. Yeah. There was one other concrete home where the homes on either side were were burnt down, but this concrete home lasted. Now that is, like, one eighth of the strength of the Ondo, and yet that one survived. And it was all over the headlines as this concrete home is the new wave of of building in Malibu in this area because it's not, you know, it's you can't burn it down.
Steve: Yeah.
Beau: We already have the strongest one in Malibu or, I mean, in Southern California for that matter.
Steve: Yeah.
Beau: That you know, it's impermeable. It's there's nothing that can happen to this house.
Steve: Except Kanye.
Beau: He tried his best. He tried well, see, what he wanted to do was remove it from its dependency on public utilities, electricity, water, plumbing. Right? Because in the end of days time or when when everything is removed, you're not gonna have water. You're not gonna have power.
So he wanted to completely, you know, jump the gun and say, well, you know, for heat, we have a bonfire. For water, we have the ocean. Right? You know, put in a filtration system. Like, he he just he was ahead of his time.
You know? I mean, I hope the end of days don't happen anytime soon, but he was he was ready for it.
Steve: He was ready for it.
Beau: He was ready for it.
Steve: It. So you take it down for 21 mil. Yeah. You put this on the Bellwood
Beau: app. Mhmm.
Steve: So how many, like, investors jump? Like, how like, walk me through this experience, like, using the app. Because you had this app for a while now. Mhmm. This is now your biggest project.
Mhmm. You put on an app, like, easy easy raise.
Beau: Yeah. We raised it in, like, two weeks. Okay. Yeah. 7 and a half million.
Steve: 7 and a half million. Like, investors saw this. I'm in. Two weeks later, you got Yeah.
Beau: We were on Wall Street Journal. I mean, yeah. It was it was you know, off to the races. We raised it really quickly. And, we had was a down payment?
So what was that?
Steve: Was a down payment for the hard part?
Beau: Exactly. So we had the the Nezier family come in with the first, mortgage at $18.05. And that and then we had to come in with the remaining, funds and then plus, sick interest reserves and the start of construction.
Steve: Mhmm.
Beau: So we raised all of that, bought the home, and, started construction. And now we're in the process of refinancing out that family.
Steve: Mhmm.
Beau: We're closing with, with a firm out of New York right now who gives us another twelve months worth of IR and interest reserves for our payments because our mortgage payment right now is $300,000 a month.
Steve: $600,000
Beau: a month for one property. For one mortgage. That's that's not taxes and insurance either. That's just that's just interest. Right?
You know? So, now we're refiing out of that, getting twelve more additional months of interest reserves so we don't have to make that payment.
Steve: Mhmm.
Beau: And then, it pays for half of the remaining construction, which there's about 6 and a half million left in construction. Mhmm. And then, and then we'll raise the other half. But what's cool though is I met some amazing guys at the LA Tech Week
Steve: Mhmm.
Beau: Where we're actually gonna put the Kanye property on the chain. Mhmm. So we are bringing blockchain investment to Bellwood where we're actually tokenizing this, right, where people can can invest with crypto and be a part of this property. So that's it's, you know, membership only. It's, like, right in the beginning.
It's invite only type thing. But that's where we're headed to right now is is, is putting it on the chain. So Is
Steve: that with Matthew or is that with someone else?
Beau: That's with Matthew. Yeah. Yeah. Smart needs.
Steve: Really smart dude. Yeah. Someone that he's gonna be on the show soon enough because it's crazy what's happening with putting real estate on blockchain.
Beau: Yeah. And, you know, we're gonna be ahead of it. We started fractional real estate investing. There was no arrived homes. There was Picasa was just getting started, but that was for vacation homes.
There was nobody in this space, and I bootstrapped this entire company. Mhmm. Okay? This was not like I had a seed round, series a, or anything like that. This was me solving problems.
Solving the problem of people wanting to invest in real estate that didn't have the time, money, or resources, and then arriving now to where it's one of the most popular methods of investing. So staying ahead of the curve is really important now that we've created this. And I I like to say we're we're the pioneers of fractional real estate investments when it comes to, single family homes and and multifamily. Like, we started this.
Steve: Mhmm.
Beau: Now we have to stay we have to keep up with the momentum and implement blockchain because that's where everything's going right now. Yeah. So we'll do that. We will have pioneered the fractional real estate investment, democratized it, and then implemented blockchain.
Steve: Yeah. Matthew Hintz, again, he'll be on, show soon enough, and he's the one that's pushing this of, allowing anyone to invest in real estate. You don't have to go through you don't have to be a credit investor. As long as you're interested in investing real estate, you don't have to invest in the whole thing. You can just invest in a piece of it.
Yep. You've already been doing it. Yep. He's been doing it on the blockchain Yep. Not nowhere near this scale.
Yep. And this is, like, the perfect
Beau: Perfect merge. Yeah. Absolutely. Yep. This is this will be the number one platform for investing in real estate in the world.
I I strongly feel that way because it's the masses that we're dealing with. It's not just the people with a ton of money that have have this
Steve: BlackRock and Vanguard and teachers' unions. Exactly. Anybody can do this.
Beau: Anybody can do this. And, yes, there's gonna be that attraction for some of these institutional funds and and big time investment groups. Yes. They're gonna wanna participate, but that's not our focus. Our focus is to bring this to the world.
The people that are watching HGTV, elbowing their spouse saying, hey, honey. I wanna do that. And then the spouse can say, yeah. Let's let's call Bellwood. That's a Bellwood home.
Versus, yeah. I would too. You know? Maybe one day.
Steve: Maybe one day. So I wanna talk, about why you wanna do this. But before I do that, where are we right now with Kanye's house? So you're you bought it for 21. Yeah.
Put money into it. How much are you into it at the moment? It's 300,000
Beau: on a free account. Man, it's rough. Yeah. So, we're into it right now. My payoff for the first is 20,000,000.
I'm I'm right at about 28,000,000.
Steve: So you're 28 into this?
Beau: Mhmm.
Steve: And then this is obviously a project. To to have twelve months reserves ready tells me it's gonna be another twelve months until it's ready.
Beau: Oh, yeah. Ten months.
Steve: Ten months.
Beau: We already have buyers lined up. Okay. So we have people that are interested. I was just told, not too long ago that Adam Levine is interested in it. We have some Saudi royal families that are interested in it.
We have a Russian, group, a finance group that are interested in it. They just don't wanna pick up anything that's, like, halfway done.
Steve: Right.
Beau: I did have a buyer. Well, called himself a buyer. He was really a straw buyer. He just didn't he was kinda looking for some publicity and but, anyways, gave some fake financials to us. We finally vetted him, and and he took up about two months of our time, honestly.
But he was going to buy it from us. You know, we were gonna make a quick, you know, 20% ROI in a few months and and walk away from it, but that never came to fruition. So we just said, hey. You know, we're not even gonna entertain this anymore. We're just gonna finish it ourselves.
Steve: So you're into it right now for 28?
Beau: So we we have 28, raised. Mhmm. So we we raised about seven and a half million. We've deployed, 2 and a half to construction in about, I think, we're about 2 and a half million in in payments.
Steve: Mhmm.
Beau: So we've we've raised that much debt to it. Yeah. It's all deployed, though.
Steve: But when it's all said and done, what
Beau: will we
Steve: be into it for?
Beau: We'll be into it less than 35.
Steve: Less than 35?
Beau: Mhmm.
Steve: And then what is the you
Beau: know, you
Steve: got a couple of people that are interested. Yeah. What is the plan?
Beau: 55 to 57.
Steve: We're looking at 20,000,000
Beau: Mhmm.
Steve: Delta. Yeah. Like, a $20,000,000 spread.
Beau: Yes.
Steve: I don't hear a lot of that in the houses.
Beau: No. No. Yeah. Well, see, that's, you know, that's you know, all deals are made in the acquisition. Right?
You know, that's that's where it was. And this was such an aggressive purchase that that was yeah. We were able to do that. So, yeah, that's you know? And and I wouldn't have bought it if there wasn't that that huge aggressive, you know, margin right there.
Because there's nothing that I would hate more than to sit on a home that I can't sell and still pay $300,000 a month in a mortgage.
Steve: Sure.
Beau: That would be rough. Right? Yeah. Yeah.
Steve: Yeah. So in in this interesting market, to still, be able to move it is at that, margin is is absolutely unbelievable. So, I see here at deeds.ai. That's SmartDeeds. SmartDeeds.
Yeah. So what's SmartDeeds?
Beau: Smart Deeds is Matt Hintz, his company. Yeah.
Steve: So I didn't know he renamed it to Smart Deeds. We were looking at something else.
Beau: Yeah. Soul Soul Slot. Yeah. Yeah. Yeah.
Yeah. So so this is, where we are merging right now Mhmm. To create this method of investing. So, we just launched it yesterday.
Steve: Mhmm.
Beau: We have, like, the first round of invite only investors that are that are already part we already had 43, and we just launched it last night.
Steve: Yeah.
Beau: So this is this is the inception of it right now. This is where it begins. This is, this is it.
Steve: And we'd be remiss to not mention how we all got connected.
Beau: Yes.
Steve: Right? So Vax Sand Bath, at with Bestia or Bestia
Beau: Bestia.
Steve: Yeah. Dot ai. He LA Tech Week is this just kinda crazy thing.
Beau: Yes. Still
Steve: kinda really wrap my head around what really what really LA Tech Week is. But, Vak put an event together, and he honored myself. He honored you, and he honored, Matthew Hintz. Like, hey. Like, we're we're we're gonna AI real estate.
Let's get three thought leaders in here. Right? Mhmm. And then let's just talk about it. And so that's how I met you.
I was already working with Matt before. Mhmm. And now you guys are working together. So, like, you know, just shout out to VAC for creating this opportunity. Yeah.
And now you're, like, partnering with Matthew. That's freaking awesome.
Beau: And yeah. And VAC. You know? So this is you know, he's creating this amazing platform for inventory. Right?
So, you know, if we're scaling with the implementation of blockchain and, you know, scaling our investors, we have to have inventory. Right?
Steve: Mhmm.
Beau: And so everybody's, you know, implementing AI right now with with sourcing inventory, and we have to stay ahead. Mhmm. You know, the whole, you know, having a boiler room with a bunch of sales guys in there is great. That is now those are now underwriters. That is the last step.
So the AI brings that product all the way up to where you have to implement a human.
Steve: Mhmm.
Beau: And that's where where we have to have those guys, those underwriters that that say, yep. Everything is good. Because, ultimately, real estate is real. You you you can't take it the full stretch and not have somebody walk that property. Okay?
Because AI can bring it all the way to the point where it's like, okay. The numbers make sense. It's in the right neighborhood. It's not next to commercial, so on and so forth. It checks all these boxes.
But what AI cannot do is determine whether or not there was a water leak underneath that house that was underneath one of the footings, and now that house leans one inch slope from the front to the back. And if you take a marble, it slides all the way down. There's no way to detect that unless you get somebody, a contractor there, to walk the property and confirm all of the numbers that AI has, provided. Right? So Bestia can bring it all the way up to the finish line, then it's a much more affordable process to just have somebody take it right across that one human Yeah.
Rather than human all the way along the the process.
Steve: Exactly. Yeah. And Vak is one of the smartest guys.
Beau: He's so smart. Yeah.
Steve: Yeah. When I met with when when we were talking, it's like, you look at the world in a completely different lens.
Beau: Yeah.
Steve: Yeah. So alright. You're clearly passionate about democratizing real estate investing. Yes. Why are you so passionate about democratizing real estate investing?
Beau: Because I see I well, one, I want legacy. I do want legacy. Okay? I I have, I want to leave the world a better place than when I came. Right?
And so that's really, really, a strong sentiment that I I feel. In doing so, I need to create something that that changes the world and makes it a better place. And this happened to to fall in my plate. Like, I I didn't grow up saying, I wanna flip houses. I wanna create this democratization of real estate investing.
I I want to do this. No. It was a perfect set of circumstances that brought it to this point right now where I'm sitting across from you and and there's thousands of people listening to us. Like, there's a reason for that. Right?
And I have a lot of faith in that. And so with that being said, I'm going to understand the opportunity that's been presented to me and work my hardest to bring it to fruition, which is going to change the world. It's going to bring power back to the people to to invest in real estate. Again, I always fall back on this is the most popular investment in the world. Yes.
You know, crypto is amazing. Right? There's a lot of fun things out there.
Steve: Yeah.
Beau: But it's a flash in the pan compared to real estate. Real estate's been number one since day one. This is where our families are raised. This is where our crops are grown. This is where our businesses are.
Everybody is interested. Even when I spent some time in Africa doing some mission work, you know, people valued the land that they were on. Even though they would be nomadic, they would still set up an area and it it would have certain value to them. Home. It's home.
And so bringing this opportunity of of democratizing the the investment aspect of it is is absolutely something that's revolutionizing the the investment world. And so that's that's my whole to change the world Mhmm. And then make it a better spot.
Steve: So where do you see this going? Because you said this is gonna be, like, the place to invest. Yeah. Yeah. I mean, where do you see this three years from now?
Beau: So, you know, there's for a long time, I wanted to go IPO. Right? Ring that bell and, you know, be on the markets. But with blockchain, you know, the opportunity to stay private is is much more attractive. Right?
Being able to really steer this in the direction that we want it to go. Last thing we want is to merge with a big corporation that turns it into an insurance company or says, oh, you have a a portfolio of thousands of people. We're gonna start marketing them something else.
Steve: Right?
Beau: So when we can when we can guide this to what we want it to be, that that's really what our goal is is is to maintain that vision and and that clarity.
Steve: Yeah.
Beau: So in three years, I see this as a household name. Remember I was I was telling you ubiquitous with with, Zillow. Zillow or just real estate in general. Mhmm. Right?
This is a Bellwood home. Yeah. You look at a a rundown property. Oh, that's a Bellwood home. Put it in the app.
Steve: Mhmm.
Beau: Okay. You put it in the app. Now you're a part of it. Whether or not we're able to buy it, but if we are able to buy it, not only are were you able to make some money off of finding it, but now you're able to invest in it, improve the community, put a new family there. Like, overall improvement rather than the new car smell, which people like with new houses.
They want that new car smell. They want the new house smell. But these new cars, these new houses are stacked up next to each other, built with with much less quality material in in areas that are less attractive Mhmm. Than really focusing on what we have in our own communities right now, taking what we have in these mature neighborhoods with quarter acre lots and, you know, fruit trees and neighbors that have been there and established this community. Rather than focusing on those and having a a process for improving the community from within, These developers are just building out in prairie lands and and and and much less attractive area so people can have that new car smell.
We can create that within our own communities with Bellwood. So it's it's environmental impact. It's a financial impact. It's it's a quality of living impact. So many positive things can be found through the democratization of real estate in the Bellwood app.
Steve: So if someone want or listening to this and they wanna get involved, wanna work with you. Yeah. What is the best way for them to do that?
Beau: So the best way would be to download the Bellwood Investor app and Bellwood with one l. And you go on our website, check us out, bellwoodinvestments.com. And, you know, we encourage everybody to to get educated in real estate. We provide access to, you know, Zillow. When we have an opportunity on the app, one of our first things that we offer is the link.
Check out the property yourself. Look at the comps yourself. Don't just take our word for it. Mhmm. Do some homework.
That way, you're educating yourself in real estate because it's not just about making money. It's about education. So people can eventually invest if they want by themselves. We've had tremendous amount of investors start investing with Bellwood and then go off and do their own thing. Yeah.
And I love that. They they're able to learn from us and and make money.
Steve: Yeah. So and this is the time that whole loop together. Right? Because the the promise was the secret to how you got a 157,000,000
Beau: Yeah.
Steve: Assets in our management. Use the app to find your investors. Yeah. Right? Like, you're sourcing or not sourcing or you're sourcing some.
You're also funding your deals. You're posting your deals on the app. Yeah. Who wants to invest? And that you've got this whole ecosystem.
And the the thing that's still the funniest to me is is the fact that you're using it on your contractors to geofence them.
Beau: Yeah. Right?
Steve: Yeah. But you got one app that basically encapsulates everything you're doing in your business. Yes. It's absolutely remarkable.
Beau: Mhmm.
Steve: I haven't heard a lot of people doing it. We try. We have these ideas. We wanna do this and that. But you actually how is it all in one app?
Beau: Yes. Yeah. Yeah. Yep. So from the realtor, contractor, investor, all in one app.
Yeah.
Steve: That's absolutely remarkable. And then are there any last thoughts as we're wrapping up that you'd like to leave all the listeners with?
Beau: So I would say that, you know, if if real estate is something that you are interested in and and something that you've always wanted to participate in, and are just unsure, Bellwood is the answer to bringing it to you in an affordable and transparent way. Mhmm. So, we want this to be a safe process. We want it to be a successful process. And our process of vetting these properties and vetting these contractors is thorough.
Mhmm. And so, you know, if this is something that you've wanted to do, then download the Bellwood app and and and let's get going.
Steve: Yeah. Awesome. Well, appreciate it. Thank you for coming in. My pleasure.
The show.
Beau: Thank you
Steve: guys for watching. See you guys next time.
Beau: Steve train. Jump on the Steve train. Disrupt us.
