Steve Trang interviews Damon Lyons of Sellers Advantage, who shares his journey from losing everything in the 2008 financial crisis to building a $30 million assignment fee business. Lyons discusses his evolution from loan officer to foreclosure auction specialist with Posted Properties, then to direct-to-consumer house buying, revealing the systems and massive marketing spend that enabled his California operation to dominate the market.
Maintain speed to lead with a three-minute response policy and live call answering to maximize conversion rates from marketing investments
Build a variable cost structure with commission-based compensation and minimal fixed overhead to survive at lower profit margins than competitors
Focus on customer reviews and seller satisfaction rather than just money when building company culture - profits follow naturally when you do right by customers
1:55:06Josh Stech, founder of LendingHome and Sundae, shares how he built a billion-dollar real estate lending company in just five years, scaling to 14% market share. He discusses the venture capital playbook, hiring at scale, maintaining culture with 500+ employees, and his transition to solving the property sourcing problem for investors through Sundae's marketplace model.
1:47:49Tommy Mello, founder of A1 Garage Door Service, shares his journey from massive debt to building a billion-dollar company. He discusses critical business lessons including the importance of systems, hiring for attitude over experience, and how he scaled from a local garage door business to a nationwide operation that sold for $570 million.
Get a free AI-powered review of your sales calls. See exactly where you're losing deals and how to fix it.
Get notified when new episodes drop, plus a free AI call review.
Test new marketing channels aggressively with $250,000-300,000 budgets if they show potential, but be prepared to outspend competitors to maintain market dominance
Learn from the 2008 crisis: avoid relying on credit lines as backup plans and consider cash-heavy strategies to maintain control during market downturns
”“We all win together. So it can't just be me getting rich. It can't be just them getting rich or the seller. Like, the seller has to win. The company has to win. All the employees have to win.”
”“We intentionally make it very difficult for the next person to come in. And I think any big business does that.”
”“We've built a company to thrive at a two x ROAS where other people go out of business at three.”
”“I now I'm my backup plan. I have the money. I don't rely on line of credits. And it's because of that PTSD.”
23020 words
Damon Lyons: Called a meeting in Newport, and we came in, and I just said, Doug, I'm tired, man. I'm working my tail off. I'm discouraged. I'll go back to Arizona. I'm using my Arizona money to fund California that's just breaking even.
Yeah. It gets expensive out here. You don't get it. It's death by a thousand cuts from groceries to gas to milk. Like, everything is just more expensive.
And we sat in our conference room in Newport Beach there, and he leans back and he holds his arms, and a tear rolls down his face. Do it, man. Beg you. I'm like, it's easy easy for you to say. You're not spending any money.
Like, you're keeping your Arizona money. I'm having to fund this. And at the end of that conversation, my business partner in the LLC is like, I don't want it. I don't care. I don't want it.
I said, you know what, Doug? If if we're in this, let's let's do it. I'll I'll commit to another year. And so I I stayed there.
Steve Trang: And Welcome. Thank you for joining us for today's episode of disruptors where millionaires are made. Today, we've got my good friend Damon Lyons with sellers advantage, and Damon drove in here from Mesa, to share how his company made $30,000,000 last year after losing everything in 2008. Guys, I wanna mention you create 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. 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 could create your first or your next million. And right now, you've got a 100,000 quarter mil or maybe more sitting right now in your CRM. Resurrect all your old and dead leads with the objection proof AI calling agent. Text cash to the phone number 33777 to unlock the money that's just hanging out in your CRM.
Ready? Ready. Alright. There's been, like, a long time coming.
Damon: Yeah. We we threatened it for a while.
Steve: I keep asking you. Like, can you do it? It's like, no. I'm not here. No.
I can't do it. We're finally here. Got you cornered.
Damon: Got me cornered.
Steve: Alright. Here we go. So, obviously, we go back many, many years now. But before we get into all of that, let's talk about early, early beginnings. What were you doing before you got into real estate?
Damon: Well, I came from a real estate family. So my dad owned a mortgage company out in Mesa, Arizona pretty much my whole life called Venture Financial. So I started going to college. I was gonna be a dentist, and I was doing college full time, and then I was working as a loan officer full time. This was in the late nineties.
Really great time to be in mortgages. The late nineties all the way through the mid 2 thousands was awesome. So I get through two years of community college, and I get my w two, and I've made couple $100,000 part time while going to school full time. And I'm like, you know what? I'm gonna put a pause on this college stuff, and I'm just gonna start to this real estate full time.
Steve: Yeah.
Damon: So I just jumped in with both feet for or both feet and did real estate full time or as a loan officer.
Steve: Alright. So you're a loan officer. This is, mid nineties.
Damon: Or late nineties.
Steve: Late nineties.
Damon: Started in '98.
Steve: Started in '98. So you do mortgages. You can make that kind of money back then?
Damon: Or just Yeah. Dude, I was just a grinder. Like, it's funny. In late is ninety nine. I was like, I'm gonna do a radio ad.
And I went to power 92 of all places Mhmm. And spent, like, $900 a month because there was this Maricopa County bond program at
Steve: the time. Yeah.
Damon: So I went out to all the, like, lower in or first time home buyer, I should say, not low income. Everybody that wanted first time home buyer, they gave you a loan for your down payment. Mhmm. So it was the second mortgage. So I went to Power ninety two and all these realtors, and I just grinded, and I made a bunch of money off
Steve: of that. Okay. Yeah. So, you did that. You quit school.
Damon: Quit school. Yep. Community college drop out here.
Steve: Community college. Didn't make didn't even finish community college?
Damon: No. Mason Community College. It's harder than it sounds, Chris. I'm telling you.
Steve: I don't think anyone's ever said that before. So you go all in, and then you continue just continue doing mortgages?
Damon: Yep. Continue doing mortgages, working for my dad, until I, like, I was stuck. I was working for my dad making couple $100,000 a year, but also, like, fixing the printers when they broke Mhmm. And the copiers when they broke, and I came and come fix this. I'm like so I had to talk with my dad.
I'm like, hey. I wanna go open my own branch with a
Steve: a buddy of mine. That was what was the the needle that broke the camel's back.
Damon: That was it.
Steve: Straw. That was the straw. It was fixing printers.
Damon: It was fixing printers. I'm like, I'm a 100% commission. I'm fixing printers.
Steve: Like, it wasn't a conversation like, hey. We should hire somebody. It was like, this isn't working.
Damon: Yeah. Well, it was I just kinda felt stuck. You know? I'm at my dad's company, and I wanted to show I was my own man. And there was zero animosity.
In fact, when I told him, hey. I I wanna do this. Like, he was my number one cheerleader. Like, yeah, man. Go get it.
Go chase your dreams.
Steve: And this is a very personal question just because, you know, like, I I know your background. No missions?
Damon: I did. I went on a mission. Yeah. I went at, 19 years old. I went to Detroit, Michigan for two years.
Steve: Okay. Yeah. They need it.
Damon: Yeah. All of us do, buddy. We all need it.
Steve: So this was before dropping out. I I I'm asking this because, like, my understanding is typically you go to college two years, you go to your mission, and you do the two, or you've graduated
Damon: Yeah. So I was old for my grade. Like, I turned 18 right when our senior year started.
Steve: Okay.
Damon: So back then, you'd go on your mission at 19 years old. So I graduated, and, like, three months later, I turned 19.
Steve: Okay. So I
Damon: didn't do any school. I basically got out of high school, and I went straight out to to serve an LDS mission.
Steve: Because you served, and then you came back to college.
Damon: And then I came back. So I got back in '98, started working for my dad, started college.
Steve: Alright. Yeah. Just kinda trying to plug that, hole. Because I was wondering, like, where does this fit in typically? Right?
Yeah. So alright. You go to your own thing. When did you go do your own thing?
Damon: That was around 2002.
Steve: 2002? Yeah. Alright. And then how was that?
Damon: It was awesome. So I went out with a a great friend of mine. He actually worked for my dad's company for a long time, and he was a a really high end loan officer. So we teamed up. He ended up opening his own net branch.
If you remember Great Southwest Mortgage Oh, yeah. That was running around everywhere. So he had a net branch of Great Southwest Mortgage, and me and him were teamed up. He was really the manager running the branch, and I was running all the the mortgages for our team. So all that, was happening.
So we did that incredibly well. I was in my late twenties when everything imploded, but it's, yeah, I I think my best year in my twenties, I'd made close to $700,000 as a loan officer Yeah. On that team. It was wild.
Steve: It was crazy times. Crazy times. The things that I think people today probably aren't aware of. I'm not accusing you of this by any stretch of imagination. But there were some horrific loans that were generated.
Damon: Oh, yeah.
Steve: And that just so I wanna talk about two different types of loans. First, loans that no one should ever qualify for. But other ones, the worst loans I saw because, like, I was helping people with short sales and, unfortunately, with foreclosures. Like, family members were issuing just the worst loans to other family members. Like, I saw loans where there were, like, six points to their siblings.
Right? So I don't know how much you saw that.
Damon: Oh, yeah. Well, I mean, we had a couple of people in the office. It it's it's never been our like, even Doug and I today, our model is not to get rich off of one person. You treat people right and they keep coming. Yeah.
But there was a couple people in the office that would do a couple transactions a month, and they would rip six, seven, 8% per deal. And it's like, holy smokes. It was just but it wasn't only only that. It was also that secondary mortgage market and the pickup payment loan and the negative amortization alone and the no income, no asset. In fact, Kevin, who I just mentioned earlier Mhmm.
Literally sent me a text earlier today saying it's back, and there's a company that has no ratios, no qualifying, no down payment. It's like, what are you guys doing? What do you think? I know how this ends.
Steve: Every time I hear these things, like, man, like, you know, they they clearly didn't watch The Big Short. They don't remember what it was like in it's the wave overnight. And maybe we're just traumatized. I don't know.
Damon: Oh, I'm traumatized. I I've got PTSD for sure. Yeah. It's changed my decision making for the rest of my life.
Steve: Yeah. Because we had, again, just when when I'm top top of six points, I mean, like, legitimately, like, 6% loan origination. So, like, a loan for, 200,000 would be a $12,000 commission to the loan officer. And, again, it's not out it's bad enough to do it with the strangers. But I was watching to their siblings.
Like, what is happening here? Yeah. And then you talk about, state income, and then, you know, the favorite, for me was always, you know, ninja loans. Yeah. Right?
You wanna speak on those?
Damon: Well, they just got so wild, everything. Like, you didn't have to prove your income. You didn't have to prove your job. You didn't have to prove your assets. You would just say what you had.
And if your credit score was high enough Mhmm. You got it. Here's your house. Because the market's just inevitably gonna keep going up, and we're gonna be safe. Yeah.
Steve: We're gonna be fine. Yeah. I remember helping a client buy a house. This is back when I was a realtor, and I remember cleaning out the house, a, finding Coke vials. Right?
Like, that was fun. Right? Because it was in Scottsdale. But then, like, I was seeing the underwriting guidelines, and it's all common sense after the foreclosure crisis. Yeah.
Right? But Bank of America slash countrywide
Damon: Countrywide home loans.
Steve: Their criteria for loans was you had to be at least two days out of bankruptcy.
Damon: Smart. Yeah. Smart.
Steve: It wasn't because, like, one day, you're not gonna learn your lesson.
Damon: Right.
Steve: Right? So if you file the b k, you had to wait two full days before you can get approved for a mortgage with country.
Damon: What a trash. It should have been day of. Day of. Right?
Steve: Like Should
Damon: have been day of.
Steve: I mean, it's been three hours. Like, I filed at 10:00 this morning. What do you mean I can't qualify
Damon: for you? Official stamp. It's filed.
Steve: Okay. So so you went through all that. So you went from 200,000 to 700,000 your best year. Yep. And then something happened.
Damon: Yep. And I was being pretty smart with my money, I thought. I was buying some rental properties, minimal down payments, like 10% down. Mhmm. But then I bought my own primary, and I built a house out in Queen Creek.
And this is in 2008. I was big balling. I spent 1,250,000.00 on the house. I put half $1,000,000 down payment. I'm like, I'm good.
Right? Like, I did what I'm supposed to.
Steve: And At the time, that would make sense.
Damon: At the time, that made all sorts of sense. I've got an escape plan. I can get out of here and get my money back.
Steve: That's Queen Creek.
Damon: Queen it was Queen Creek in 2008, and the infrastructure was not there at all. I was next to a dairy.
Steve: Like, the
Damon: I was Queen Creek dairy.
Steve: Mhmm.
Damon: And all of a sudden, that money spigot turned off when the secondary market stopped buying and when the whole big short happened Mhmm. And I got caught with my pants around my ankles, honestly. It was just I couldn't make a buck. Everything I would would bring in loans, we'd send it to underwriting. The guidelines would have changed by the time that it was put into underwriting, and then it came out.
It's like, oh, that program doesn't exist. That program doesn't exist.
Steve: And underwriting for context. Two or three days. Right?
Damon: Oh, yeah. On on the best days. You know? You got up to when the programs were moving that quick, it turned into a week or two. And in that time frame, all the programs were closing.
Like, I bought that house and my mortgage payment was just under 5,000. And because of how fortunate I've been, I'm like, oh, who can't make a $5,000 a month payment? Until everything turned off, and I'm like, oh my gosh. Who can make a $5,000 a month payment? Yeah.
Right? Just that switch in my head went off of, what have I gotten myself into? Mhmm. And the market crashed. And Queen Creek was one of the worst of it.
Right? All the outskirts in Maricopa County here, but Queen Creek, that house that I built for $1,250,000 went to foreclosure auction for $326,000, and that's what it sold at.
Steve: Wow. You look at what that was worth today?
Damon: Yeah. It's it's, like, 1,000,001 half, I think. It barely got back up to
Steve: Yeah.
Damon: What I built it for.
Steve: And, not to make it too much for myself, but just going back to, like, when I saw on Queen Creek, it's like, I was showing houses, right, you know, back when I was wearing my realtor hat. And Queen Creek was the city where, like, every house had a for sale sign.
Damon: Oh, yeah.
Steve: Right. It wasn't like, hey. Maybe a tenth of the houses have a for sale sign, maybe a third. It was like when we were driving, it was, like, either on way foreclosure, been foreclosed upon, has a sign in the yard, under escrow to be sold to a first time home buyer
Damon: Yeah.
Steve: Or someone recently moved in. Like, it was at one stage of distress or another every house in Queens. It
Damon: yeah. It was nasty. And it was like, I tried to ride it out, tried to figure it out. I had a line of credit on the house that got shut off immediately. So I was like, oh, well, there goes my backup plan.
In hindsight, I'm glad I they turned it off. I would've spent it all and then that much more in debt. But because it was a purchase money first that made it easier on the foreclosure process. It was dark days, man. I remember having to go to my kids, and, my oldest son was eight years old, and my youngest daughter was just born, so she didn't realize it.
I'm like, hey, guys. We gotta move out of this house. We gotta pick a new one. And my eyes are teared up, and my oldest son and second son, they're eight and six at the time. They look at me like, will the new house have a tree we can climb?
And I just lost it. Yeah. Like, I thought the big house was important. Right? I thought the awesome pool in the yard, and all they cared about was a tree to climb.
Steve: Mhmm.
Damon: And it, we moved into a rental. The cheapest possible rental was the direction I gave my wife, like, find a rental, the lowest payment you can find, period. Let's move into it. So, you know, we lost that house, moved into a rental property. But and I guess I'll add this.
And then I went into a, bankruptcy attorney's office because I'm like, man, I'm bankrupt.
Steve: Mhmm.
Damon: I've lost it all. I went to the bankruptcy attorney's office and I'm like, hey, I'm I'm I'm bankrupt. I need to file bankruptcy. And he looks through everything. He goes, not bankrupt.
Like, yeah. I've lost it all. I because mentally, I had this, and now I'm here. He's like, you're not quite bankrupt. When this number here gets to zero, come back and talk to me.
Mhmm. But right now, you still have assets. You're you're not bankrupt. But that was the huge turning point for me because I was mentally Yeah. I had lost so much and kept getting kicked and kicked and kicked that I thought it was over.
But from that day forward was, alright. How do we get out of this? I'm not bankrupt. I never had to file bankruptcy. I was able to climb out of the hole, but, yeah, that was the big learning point and a big part of my PTSD, honestly.
Steve: Yeah. Let's talk about the high life. Right? So Yeah. 700, $1,300,000 house.
Or you put 1.3 into into a house. Cars. Right?
Damon: Not really. Like, I didn't go crazy. I was really smart. I I had a pickup truck. My wife had a Suburban.
That's all we had. They were both paid for. So we didn't do the, you know, luxury goods or watches. Like, I put all my money in real estate.
Steve: Yeah.
Damon: Unfortunately, I put it into Queen Creek real estate.
Steve: How many rentals did you have?
Damon: At that point, I had three of them. I kept one all the way through it even though at one point I was a $150 upside down on it. Okay. It's still cash flowed, so I was able to still maintain that. And then I was also building three spec houses at the time that the whole market went sideways, and those oh, that was a bloodbath.
Steve: Yeah. Did you put any money into this?
Damon: Oh, yeah. All of it. All of it. All of the money I had.
Steve: Oh. Yeah. So you aren't just doing so the the trick was I mean, you wanna share what the trick was with spec homes back then? Like, put five you put, like, a thousand hours.
Damon: You you could build a spec home for nothing. Mhmm. They were doing build owner builder houses, and you could put 5% down or or almost nothing. Mhmm. So I was doing them, and I was putting, like, 20% down on them.
And I I about broke even on all of them, but I was building 700 to million dollar houses and, you know, at 200, 202 like, it took everything I had.
Steve: Right.
Damon: Sucked me dry.
Steve: So you lose basically everything.
Damon: Yeah.
Steve: What did you do after that? So you said, like, you know, you're I mean, I I guess the other thing too, like, so, you know, you tell your wife, like, hey. We we find the cheapest rental. You have three kids at this point, you said? Four.
Four.
Damon: Three sons and a daughter.
Steve: Three sons and a daughter. So you start over. Like, what was your wife saying, like, this whole time?
Damon: She's my biggest cheerleader, man. Yeah. Like, the whole time, she's just like, I don't care. She grew up she had a pretty rough upbringing. She went through a lot with her.
Her dad struggled with some addictions and gambling. He's a really successful chiropractor, but he just lost everything, a true gambling addiction. So while we were dating and before we got married, she's like, I just ask you one thing, don't ever because it I might have it wrong, but during high school, she lived in, like, seven or eight different rental properties in the same area because they kept getting evicted. Oh, man. Yeah.
So she sat there and was just like, I know who you are. I I know what you're capable of. Don't worry about it. You'll get up from this. And she was right.
Like, she that that push and that cheerleader behind me was was something I definitely
Steve: Alright. So then what did you do?
Damon: So I didn't know how to make money in mortgages anymore.
Steve: My friends No one did.
Damon: Yeah. My friends that stayed in it were just struggling. So my w two for the following year was, like, $50,000. Mhmm. And when you're used to a $700,000 income to $50,000, your mortgage payment's $5,000 a month, and your electric bill and what like, do the math.
It just it disappears. So I couldn't afford that, and all my money was in those rentals. So Kevin, who I was partners with in mortgages, was best friends growing up with a guy named Doug Hopkins. Oh. So they went to high school together.
They graduated together, and Doug was always coming into our office. And since the late nineties, Doug got into the foreclosures here in Arizona. Mhmm. So he was going down to the courthouse steps. He was working with some other people, and he was buying the foreclosures and then assigning them
Steve: out. Yeah.
Damon: You know Doug well. Yeah. Doug is an amazing salesperson. Doug is an amazing, he's just he's got a lot of great traits. One of his less great traits is systems and processes.
Steve: Shocker. Yeah. For those of you who don't know. Right? Kind of a big deal.
Like, the guy in Phoenix.
Damon: Yeah. Doug is yeah. He's he's the man, and he was killing it. This is not to say I made Doug Hopkins. Like, oh, no.
Doug was in great shape.
Steve: Yeah.
Damon: But I came to Doug and said, hey, Doug, I think we can really put some systems and processes in place. Because he was just shooting from the hip and making millions of dollars a year. Yeah. Like, I think we could put some systems and process in place. We can really wrap this up.
And he said, okay. What do you want? Like, I wanna I'm part of the company. He's like, yeah. Right.
Not happening. So literally me and two other partners, we created a little LLC, and we created an agreement with them that said, hey. We're gonna get 50% of whatever we help bring in for you.
Steve: Mhmm.
Damon: You still get all your old traditional stuff. We get 50% of what we bring to you. So we took him from buying 10 houses a month to 25 to 75, a 125 houses a month, to eventually 250 houses a month at a company called posted properties at the time.
Steve: Yeah. And I remember posted properties because you guys were the ones that the courthouse steps. Yes. This is this I think we're past the statute of limitations. Right?
So, the things that the stories I've shared was the amount of breaking and entering back in the day.
Damon: I cannot confirm nor deny what you're talking about.
Steve: But you don't get due diligence in a foreclosure property. No. Right? So you're buying a property, and you just hope that they did not pour concrete down the plumbing. Right.
They did not, enjoy, using a hammer to all the walls because you we've seen those.
Damon: We've seen them. Or or
Steve: cabinets. They
Damon: were rare, but they were there.
Steve: Cabinets nonexistent in the home. Totally.
Damon: We talked to homeowners. It's like they're like, oh, yeah. You can have it. We're out of here. I'm like, where the cabinets go?
They're like, well, they're worth money, so we just took them. Yeah. Where are you putting them? I don't know.
Steve: Yeah. And so, you know, part of our due diligence is having a driver Yep. Evaluate the properties, and we would just have photos, and we don't ask questions.
Damon: Yeah. Yep. Yeah.
Steve: So you guys Yeah.
Damon: Magically, a lot of those doors were left unlocked.
Steve: Right. Magically.
Damon: Mhmm.
Steve: So posted property. So you guys you started that.
Damon: Well, no. So at the same time, Doug so posted property is always Doug's company.
Steve: Okay.
Damon: Doug started it, but at the exact same time, we started with Doug.
Steve: Got it.
Damon: So to say we started it isn't accurate, but we're a big part of its starting and its growth.
Steve: Yeah. Okay. And then so walk me through again. Because my understanding posted properties, it was just foreclosure properties.
Damon: But That's it. It was just foreclosure properties, and we just so back then, you couldn't get the list. Mhmm. The foreclosure list was like the secret recipe. It was hush-hush.
Nobody knew about it. Nobody knew how to get it. Yeah. So people got really ticked because our idea was, let's give the list to everybody. But when you buy through us, we automatically had title searched through Fidelity National Title at the time.
We had drivers drive all the properties, so we knew what lien position it was. We knew the condition of the property. And then we had our bidders down there at the courthouse, which we had five to seven every single day at every single auction that was going on with money in hand ready to buy anything that you wanted. Mhmm. So that was really our exploding moment.
And a lot of the old school people at foreclosure were
Steve: Oh, yeah. You ruined the old boys network.
Damon: We ruined it because they would allegedly talk before auction and say, Steve, you take this one Mhmm. And you get an opening bid. I'm taking this one. I'm taking this.
Steve: And we're gonna divvy it up.
Damon: We're gonna divvy it up. Mhmm. And we showed up buying everything.
Steve: Yeah.
Damon: And not only that, we only marked it up $3,000. Yeah. And they were used to making $30.40, $50,000 rips on each one. Mhmm. So there was some I don't wanna say death threats, but there were several
Steve: Oh, really?
Damon: Very mean phone calls and you better I better not see you on a dark alley. And those were mainly to Doug. I was always the guy behind the scenes. Like, my life was safe.
Steve: Yeah.
Damon: But, people were not happy at all saying, what are you doing? Mhmm. You you just ruined everything. Doug Hopkins single handedly ruined the foreclosure option. Yeah.
It was inevitable. We were just first to market.
Steve: Yeah. Well, he definitely did. But you're right. Someone's gonna do it.
Damon: Someone's gonna do it.
Steve: Okay. So just to recap. Yeah. So foreclosures, hard to come across. There's a list.
Right? Because for me, it was just Tiffany and Bosco. Right? Like, that's
Damon: Oh, yeah. There was way more options than that. Yeah.
Steve: So that's all I had. Right? So it's Tiffany and Bosco. But so you you you pulled all the lists, and then you would, you had an arrangement with Fidelity National Title where they would do the title search on every single one with very little notice. Because my understanding, like, 3PM is about one is what time these lists came out?
Damon: They had a full back office Yeah. That did nothing but work on title searches for us.
Steve: Right. Which, again
Damon: because we then guaranteed them we would open title with them or get title policies.
Steve: But this is also where Phoenix is extraordinary because we can do title searches in less than 24. Right. Whereas most states
Damon: Yeah. They're attorney states and other stuff.
Steve: Yeah. So you pull the list day before foreclosure, really the afternoon before foreclosure, do the title search, have drivers inspect the properties. And so and I'm only speaking on my side. Right? Like, I would click the link, and I could see the I I click the address.
I can see the photos. I could see the learn the lien history, all the other information. You get this to everybody. So you have basically the entire buyer list in all of Phoenix, Arizona.
Damon: Yep. We prevented them, and we made them put a deposit up with us to make sure they were serious.
Steve: Right.
Damon: And we held it in an escrow account.
Steve: That's right. I remember that. I had to put money in Yeah. In order to get the list.
Damon: Yep. Because we didn't want our competitors getting all our information. Like, you had to be vetted. And if we found out you bought around us, you were gone. Yeah.
Steve: Yeah. That's something Doug would do for sure.
Damon: Yeah. Smart.
Steve: And then minimal markup. $3,000. $3,000.
Damon: So, for example, where people loved it is they would say, hey. I'll pay $300,000 for this house. If we won the bid at $2.50, they paid $2.53.
Steve: Yeah.
Damon: The old school way was you said, I'll pay 300. If we bought for $2.50, we made 50. Right. So now you got the benefit of the great deal, because there was only a $3,000 markup on whatever the winning bid was. And that fee was because we showed up with our $10,000 check at the auction, and we did the title search, and we drove it.
And because of the volume we're dealing with Fidelity, they guaranteed title position. So if somebody bought a property through us, they would say we're putting our stamp on it. This is a first. Mhmm. Oh,
Steve: so even though there's a mistake, they were gonna need it.
Damon: Yeah. They ate, a handful of mistakes between California and Arizona. Yeah. I haven't got to California. That's coming.
Steve: Yeah. And then, again, just it's funny because I didn't put you with posted properties. Like, you guys were advertising on, like, freaking Fox Business Yeah. CNN.
Damon: Yeah. And the most controversial one is right when you logged into the MLS Mhmm. There was a splash page.
Steve: There was.
Damon: And we said, posted properties have your buyers buy through we're trying to market to realtors to say, hey. We wanna help you. Help me help you.
Steve: That didn't go well?
Damon: Oh, man. There was an uproar
Steve: in the realtor community.
Damon: The the commissioner started getting called. It just they just dragged everything through the mud, and we just backed away. And because we had signed, like, a I think it was a six month contract. Mhmm. And yeah.
They just no. We did it through the tax.
Steve: Monsoon.
Damon: Yeah. Monsoon. Yeah. We did it through Monsoon. And so we had a contract with Monsoon, and then they came to us.
They're like, this is a problem. We're like, yeah. Make it disappear. So I think that lasted for, like, a week or two before we just ran for the hills.
Steve: But it made total sense because, like, one of the ways you know, we don't talk about this enough, but, you know, you got the wholesalers, and you got, like, all these different lease sources. So you got Batch, you got PropStream, you know, DealMachine, like, all all these different sources. But, like, one of the most underrated is the actual MLS data as a realtor. Right? So, like, I could pull up a lot of information.
Just log in as a realtor, click on the tax records, and it's all so cleanly compiled. Right. Right? And so, like, I could see, all all the foreclosure information right there in one spot. So it makes total sense
Damon: Right.
Steve: To advertise on the tax part portion of the MLS. Right. But I guess I was Yeah. We thought
Damon: it was genius, but, yeah, realtors.
Steve: Genius, but realtors are they're they're interesting.
Damon: Oh, yeah. They didn't like it.
Steve: So you went from, like, loan officer where you had to, like, be friends with them Yeah. To the other like, right to the opposite side where they hated you.
Damon: Well, we were still friends with the consumers. Right? Yeah. So the people bidding through us like, that was my first job as my part of the there's three of us that made up that LLC, and my part was the salesman. So I met with the people.
I explained the auction to them. If they want me to take them to auction, I would show them how the process works. So I was onboarding all the new people Mhmm. Onto the platform. Another one of my friends was, like, an IT guy, and then the other guy was down there bidding.
Mhmm. So that's what the three of us did to bring value to the table to get our 50% of whatever we brought into the to the posted properties funnel.
Steve: So, 250 properties a month, you said?
Damon: Yeah. That at our peak, we got to 250,000 or 250 properties a month here in Arizona.
Steve: The 3,000 up. Yeah. Pretty good.
Damon: It was good. Our overhead was about $100 a month.
Steve: So better than when you were at mortgages?
Damon: Better than when we were at mortgages. But I somebody put this pea brain idea into our brains, like, man, we're killing in Arizona. We're buying a ton of them. Why don't we go to another state that was hit? So Florida, Nevada, California.
Steve: Yeah.
Damon: Florida, it's like, that's a six hour flight, man. We can't go to Florida.
Steve: Well, not just not just six hours, but it's like a year. It was Oh, yeah.
Damon: It was crazy. But this was in 2009. So then Doug's like Vegas. Doug should be the one telling this story. But we went to Vegas.
He lost a lot a lot of money. We never even made it to the foreclosure auction before we got a flight and flew home because he said I can't own a business in Vegas. Why? Because he lost money at the casino. And he's like, if I show up to Vegas Oh.
I'm gonna lose money.
Steve: Doug can't personally go to Vegas.
Damon: Correct. He can now. Doug doesn't gamble anymore like that. But there was a time in his life where he he loved to play. Mhmm.
And it was just one of those it was just a bad night that he went and he lost some money. He learned a big lesson. He's like, yeah. I'm not there. Let's go to California.
Steve: It's a business decision. No more Vegas.
Damon: No more Vegas. Yeah. Because anything I make, I'll probably lose.
Steve: Fair. Alright.
Damon: So California. We said let's go to California. We started looking at all the markets, and we ended up in Newport Beach. And we did that because there was Orange County, Riverside County, San Bernardino County, and LA County. And all of them were an hour drive from Newport.
Mhmm. So we set up an office in Newport Beach. I started flying out there January 2010. And for six months, I commuted, and I lived in a trailer actually. Well, not too bad.
I was on the PCH, but we had a, like, a toy hauler that I driven out there. So I lived in this trailer while we tried to get California up and running Mhmm. And really mimicking what we did in Arizona. Yeah. And that was tough.
People didn't believe us. They didn't trust us. Who are these little Arizonans? Like, California's got a little bit of a chip on their shoulder that they think they're better than everybody else.
Steve: I mean, they call us zonies.
Damon: Yeah. Right. Like Every summer in Newport Beach, because I lived right there, for the last fifteen years, I just barely moved back to Mesa. But the Utah and Arizona crowd that would take over Newport Mhmm. It's like, oh, here's the Zonis.
Yep. Here they are. They're all coming in. Yeah. They
Steve: don't care for the Arizona plates.
Damon: Yeah. But in hindsight, Arizona plates are a lot smarter. California's a great place to visit. Yeah. I don't live there if you if you can avoid it.
Steve: Yeah. Alright. So new kid in town. Yep. Didn't like you.
Damon: Didn't like us. We were getting calls from the old timers at auction saying, what are you doing?
Steve: Same same conversation again.
Damon: You're paying too much for these properties. Who are you? Where you come from? Well, we had Fidelity roll out the red carpet for us. And Fidelity, Arizona talked to Fidelity California.
It's like, you wanna work with these guys. Mhmm. Like, what they're doing in Arizona is insane. So Fidelity really helped us launch by taking us to all these different offices, introducing us to the right people. And so it helped our learning curve, but it was still a year process to, like Really?
Breakeven.
Steve: Really?
Damon: The difference about California is we had to show up with 100% of the money the day you quote or at auction. So if you buy a million dollar house, you're handing over a million dollars.
Steve: Oh, that's the way it is in California.
Damon: That's the way it is in California.
Steve: Oh, I didn't know that.
Damon: So that $10,000 check?
Steve: No. Let's real quick then, let's just take a step back here, explain how it happens in Arizona because that's how I know it.
Damon: Yeah. I
Steve: didn't know about this in California. So how do you buy in Arizona?
Damon: So in Arizona at auction, you just have to have a $10,000 cashier's check that you sign over to the trustee Mhmm. When you have a winning bid.
Steve: Right.
Damon: That $10,000 buys you twenty four hours to pay for the rest of the proceeds.
Steve: Right.
Damon: So if you bought a house for a 100,000, you hand over 10, tomorrow, I have to wire in or bring $90,000 cashier's tech to the trustee's office.
Steve: Right.
Damon: In California, at the time I say $100,000, I have to hand over all 100,000. Mhmm. So we were having to show up at auction with millions of dollars Wow. Which was a shocker. In Arizona, we'd show up with $250, and we could buy 25 houses a day.
Mhmm. In California, we'd show up with 250, and we couldn't afford one. Yeah. So we had to just increase the cash, and we were terrified. Right?
One bad buy, your money's already gone.
Steve: Yeah.
Damon: If it's a second, if it's wrong, it's gone. So it was this learning curve. We kept just pounding the pavement. We were going out there with Fidelity rolling out the carpet until we finally got just that that push. It's like, okay.
These guys are are real. Mhmm. And then we just started ratcheting that up, and we started buying 250 a month out there too.
Steve: Really?
Damon: Yeah. So it's at our peak. Same model. We charge more. We're charging 5,000 a piece out there because we were having to front all the money.
Mhmm. And so we wanted interest on the money that we were fronting. But, yeah, we got up to buying just a huge number of properties. So at our peak, I don't know the exact number, but it was right around 500 properties between Arizona and California at foreclosure auction. And I would say that was probably right around 2012.
Steve: Yeah. And so I'm thinking, you know, two fifty, and there's five k pop here.
Damon: So Three k there, five k there. Yeah.
Steve: Yeah. So, you're at 1 and a quarter mil monthly, California.
Damon: Yeah. They did pretty good.
Steve: Yeah. And it was you said there's three of you?
Damon: Hold on. Let me correct that. For us to get up to the $2.50 in California, we landed a huge account, and that was Invitational. Yeah. So Invitational Homes started buying through us in California because of the connections we had in Arizona out here.
Steve: Yeah. I won't name
Damon: the names, but we knew, high up people at Imitation Homes. Mhmm. So they came out there and started buying through
Steve: us. Yeah.
Damon: They got a sweetheart deal because they buy 20 houses a day. Right? Yeah. So they were only paying well, I won't say. They paid a lot less than the 5,000, because the volume and what they're buying.
Steve: Yeah. I mean, Invitation Homes was a big deal for us because this is when I started buying houses cash. Right? So, like, 2011, 2012. And Invitation Homes was the first call.
If I had a motivated homeowner Yeah. Right? Like, Damon fills out a web form. I book an appointment with Damon. I'm gonna see you this afternoon.
My first call always, invitation homes. Yeah. Hey. What will you pay for this house? Perfect.
Damon: Yeah. Yeah. Working for them, like, we landed that account, and, obviously, it was Wall Street money.
Steve: Yeah.
Damon: I've never been more miserable in my life and made more money at the same time.
Steve: Really?
Damon: I had to show up to their office at, like, five every morning. They kept me there till about 10:00 every single night. Mhmm. This was in, Corona, California. So I I was living in Irvine.
So
Steve: that ain't the nicest part?
Damon: Yeah. It was a decent part of yeah. But not the nicest part. They
Steve: I'm just saying compared to Newport Beach.
Damon: Yeah. Compared to Newport. So I had to drive about 45 each way to get there. Mhmm. So I'm leaving my house at, like, 04:15 in the morning, and I'm getting home at 10:45 at night.
And I've got four young kids at home.
Steve: Yeah.
Damon: And I'm making crazy money that I needed to make and and stockpile away. But, man, I was tired. Fourth of July, I was in their office working. Like, every holiday, there there was no breaks.
Steve: Why were you working so many hours?
Damon: You you wanna be part of this team? This is what you do. Like, they had stories of people leaving there with IV bags because they didn't care this is what we're doing. We're we're working.
Steve: And it's that Wall Street culture?
Damon: It's that Wall Street culture. They were really good to us. They like, this isn't a hit piece on invitation homes. It was just look. We had that success because I I'm talking about me going to the office.
I had a whole team behind me that worked out of our office in Newport Beach that was doing the same stuff. Mhmm. They were there just grinding. Because of that time, frankly, if you didn't have one of those big iBuyers,
Steve: It's a bad time.
Damon: You weren't buying. So very few of our buy like, our buy people that were buying, all of a sudden, Invitation Homes came in, and they're calling us just yapping. Like, this stinks. Where's who's buying all these? And we didn't wanna tell them, but they were getting beat on everything.
I mean, at one point, Invitation Homes basically said, whatever the value is today, we'll pay a 115%. Yeah. How do you lose? You don't.
Steve: Oh, you don't. They're they're great, great buyers. The problem was, again, if you weren't them, it was a problem because, I know that there were a lot of houses before. I was like, who are these funds paying this much? Like and, like, even when I was doing short sales.
Right? I was like, we got this short sale approved at, like, 114,000, and Invitation Homes were like, no. We don't want it. And then they just buy it at the courthouse for, like, 130,000. Right.
And it was like, well, you could have cheaper here than it's cheaper. It's not cheaper. Our process is buying at the foreclosure. It's easier for us. Like, man, this sucks.
Right. Because now I'm not I'm not getting the commission, and I can't even compete with you at the courthouse steps. Like, this is just battle around. Right.
Damon: Yeah. And it was, yeah, it was a good run. It it was a great run, but when they ended up stopping buying from us Mhmm. Man, it was a relief. Like, I slept in, and I didn't have much to do.
And and by that time, my other two partners had both wanted to be bought out because they stayed back in Arizona. I was the only one that came out there. So all that was resolved. So now it was just me and Doug. Me and Doug
Steve: Why we bought out after it winded down?
Damon: No. No. Before before it ratcheted it up.
Steve: Oh, before invitation?
Damon: Yeah. Okay. So before
Steve: Because it wasn't worth the grind.
Damon: It wasn't worth the grind. All our money was coming from Arizona. I'm basically breaking even or losing a couple bucks in California, and they're like, I don't wanna be a part of this California run.
Steve: So very fortuitous. Great.
Damon: Yeah. For
Steve: you. What did you see that they didn't?
Damon: Doug's gonna kill me for this one. I told we called a meeting in Newport. So this part, there was me and one other person because one of the other guys was gone, and then Doug. So we had 50% of it. Doug had the other 50.
And we came in and I just said I said, Doug, I'm tired, man. I'm working my tail off. I'm discouraged. I'll go back to Arizona. I was still making great money out of Arizona because of what our team was doing.
So I'm using my Arizona money to fund California that's just breaking even.
Steve: Yeah. Or robbing Peter to pay Paul.
Damon: Right. And I'm like, it's expensive out here. You don't get it. It's death by a thousand cuts from groceries to gas to milk. Like, everything is just more expensive.
And we sat in our conference room at our our office in Newport Beach there, and he leans back and he folds his arms, and a tear rolls down his face. And he's just like, I'll do it, man. There's something here. There's something here. Let's don't do it.
I beg you. And I'm like, it's easy easy for you to say. Mhmm. You're not spending any money. Like, you're keeping your Arizona money.
I'm having to fund this. And at the end of that conversation, my business partner in the LLC is like, and I I don't wanna do it. I don't care. I don't wanna do it. And I said, you know what, Doug?
If if we're in this, let's let's do it. I'll I'll commit to another year. And so I I stayed there, and, you know, it worked out awesome. So I paid out my partner for pennies because there really wasn't anything there.
Steve: Yeah.
Damon: And, yeah, within three months, we got a call from Invitation Home saying, hey. You guys are running an auction. Right? Yeah. We know who you are, and, yeah, we'd like to start, tomorrow.
So, literally, the next day, I showed up in their office. I'm like, hey. And they're like, who are you? What are you doing here? I'm like, they called me and told me you're buying today.
Let's go. So somebody else had a desk just like this. I I came to the back of their desk, and we're both on computers, and all day, I'm feeding them properties. This is coming up next. This is coming up next.
Here's what's coming. We had a software system that tracked everything live, and so I I would help them use that and help them buy properties through our platform. So Doug's tier. That's that's what I saw, Doug's tier.
Steve: Doug. So his faith, not yours. Not mine. Oh, he dragged you.
Damon: Yeah. I was already beaten. I was like, I I'm can't fail a second time in in a few years.
Steve: Oh, so I wanna so there's a couple different directions I'll go with this. So, I guess the first direction I'll go with this is I miss I I didn't, touch on this point. Your HELOC got closed in your in Creek House. Yep. I think that's an important point because there are some people who this might be their backup plan today.
So, what lesson did you learn? Or you wanna share, like
Damon: People think I'm an idiot. Mhmm. And I am. They got a point. But I own all my real estate with cash.
I just bought a nice new house out here. I just paid cash. There's a ton of money in there, but I've learned that I can't depend on the banking system. Before this whole crash happened, there was kind of this moral, hey. You took out that loan.
You've gotta pay it. That's the right thing to do. And I believe that. And then when I saw I have friends that were halfway done with the construction of their houses and the banks cutting off the whole construction loan. Mhmm.
They they stabbed him in the heart and buried him right there in the ground. I'm like, banks making business decisions, but they want us to make moral decisions.
Steve: They're relying on it.
Damon: Yeah. They're relying on us to make those. And and so to me, I now I'm my backup plan. I have the money. I don't rely on line of credits.
I and it's because of that PTSD. And a lot of people would say, man, you are so silly. You could go get a mortgage at x percent, reinvest it in the market, and get this. I don't I don't want it. I've been there, done that.
Nobody could take anything I got. I don't have a loan on cars. I don't have a loan on houses. And I'm not saying that's the right way. It's the right way for me Yeah.
Because I don't wanna deal with that again.
Steve: Well, and, and I appreciate you sharing that because, like, I've made this, you know, this same decisions. Because prior, right, to o seven, you know, you read the books about leverage.
Damon: Leverage. Leverage. Leverage.
Steve: All this stuff. Right? And you see all the people that get crushed in o seven and o eight. Like, I said this before, you know, all my everyone I know in real estate not everyone, but a lot of people in real estate got divorced. Some took their own lives.
Right? And then the contractors that were making all this bank during this time yeah. More of them got divorced, and then the same thing. Like, some of them took their own lives. And so, like, witnessing this, I also had this thing.
It's like, you know what? We're gonna own everything cash. Like, the I went from, like, max leverage to, like, I don't want any part of this. And the and also, like, I didn't get to enjoy what you did with posted properties. I was just a realtor.
But, you know, working with these wealthy individuals and the way they bought properties, it's like, oh, like, yeah, everyone could talk about wealth, but, like, in the good times for them, not for us, in the good times, they just open up their pocketbooks, and they just buy everything. So we had people come in from Utah. Yeah. Right? We had money coming in from Australia.
Right. Everyone's just buying everything cash. It's like, okay. The book say, here's how you buy real estate. Yeah.
But the real life is, like, here's how, like, the wealthy buy real estate.
Damon: We had one guy at posted properties. This had to be o nine because I was still here. He rolled up and he's like, alright. I got $10,000,000. I wanna go buy rentals.
And he was buying stuff for $60.70, 80. Just paid cash forever. Yeah. And five years later, he's later, he sold it all and four x'd his money. I wanna do that.
Steve: Yeah. I keep waiting for this to happen again. Right. So, so the a follow-up question to that is you're making all this bank now with posted properties. How were you buying real estate for yourself at this time?
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Damon: I was, sporadically. I I was still hoarding a lot. Mhmm. And the thing nobody really tells you is, like, when you start making a lot of money, it takes, like, three to five years for you to actually see that money. Because you make the money, but the the tax leverage is huge.
And I kept having this conversation with Doug. I'm like, what the heck? It says I'm making this. Where the heck's my money? Mhmm.
And he would just laugh. He's like, man, I I know exactly what you're going through. I felt the same thing. So it wasn't until you get, like, this critical mass Mhmm. That it really starts taking off.
So I would buy a rental property here or there, but we were buying a lot at the auction time, but I was buying it with my three partners. Mhmm. So when we did that split up, we sold everything and split the money up and took it out. But a lot of that money was used to buy a house out in Southern California. Mhmm.
Right? What I could have bought here for 300,000 was 1,000,001 half out there, and it just all adds up.
Steve: Yeah. So things start winding down, posted. What'd you do after that?
Damon: So we we say we sold posted properties. So, anyways, there was another company in town that was sick of competing with us, and we thought posted properties was a horse that we're gonna ride until it fell over dead
Steve: Mhmm.
Damon: Because it would not maintain this level of, houses being foreclosed on. So they made us an offer for a a buyout, which was kind of this payout. We'll pay you some money, but then keep paying you on your buyers for you guys to disappear. So we sold the company, and that's when we started Doug started doughopkins.com here in Arizona. I started sellers advantage out in Gallup.
Steve: Got it. Okay. So this was when?
Damon: 2014.
Steve: 2014. Seller's advantage begins.
Damon: Seller's advantage begins.
Steve: Alright. Okay. So then what was that transition like starting a new house buying business or different different way of buying houses?
Damon: Yeah. So it was the direct to consumer. At that point, really, nobody was doing mass marketing direct to consumer. There was mailer people. Mhmm.
But for so long, there was so much inventory at auction. The direct marketing kinda disappeared. Nobody needed to. Right. You get free stuff off MLS all day.
Steve: Yeah.
Damon: So Doug got this and I will blame Doug, or give credit to Doug, whatever way you wanna see it. He got this idea. He's like, hey. Let's do a TV commercial. Mhmm.
Because we had some money in the bank, and we had some free time. At that point, we were just going to agents, and agents were sending us deals, and we were because we had a non compete clause at the auction. So agents were bringing us deals. We'd fix them and flip them and, you know, do twenty, twenty five a year. It's like, hey.
Let's let's run a TV. Mhmm. It's gonna cost us $50,000 out here in California. I'm like, you're out of your mind. No way.
He's like, come on, man. We gotta do it. We gotta do it. So we make a TV commercial, and to before I even tell you that so we had a phone number on the TV commercial. It ran to a Google Voice number.
The Google Voice had a voice mail of Doug saying, hi. You've reached, sellers Doug Hopkins with sellers advantage. We live answered nothing. I was the phone call answer. I was the appointment goer tour.
I was the construction manager, and I was the realtor selling the properties or over oversaw the realtors on our team that sold the properties. Realtors on our team. We had one. Yeah. We were a mess.
Steve: Sounds like a perfect system.
Damon: Sounds like a perfect system. But when we had no competition on TV, the leads poured in. And even though we were horrifically bad and did everything wrong, we were still able to be like, well, we spent 50, but we made one fifty. Oh, let's hire a person to answer their phone calls and do live answers. That was six months later.
Right? Oh, now let's and then we just kept on growing. There hasn't been a a year since 2014 that that really in Southern California, we haven't grown. Yeah.
Steve: So, obviously, disaster of a system to begin with. Disaster. But it sounds like a good run from day one.
Damon: From day one, it was a profitable model. Model. Not highly profitable Mhmm. But it was fun. Yeah.
Like, we had a lot of fun doing a and even running those commercials, we maybe we did 70 to a 100 deals a year Mhmm. For that, like, first year. It wasn't like this, boom, we're doing 500 deals a year. It was
Steve: Yeah.
Damon: It was much lower volume and we were flipping everything. We we weren't So
Steve: you guys were flipping? Yeah. So you, I guess you sold your list, so that list was gone? Like, you couldn't reuse that list? Well,
Damon: so those buyers, we found out like, the auction buyers in California, they'd weigh less because of the huge amounts of risk in California. Mhmm. And and Arizona and California are completely different. When we showed up in Arizona, 90% of the houses going to auction were vacant. Mhmm.
When you showed up in California, 90% were occupied, and they say, we know our rights and you owe us money. Whole different culture and mindset. Yeah. So we we could still use that list, but those people were paying such small numbers. We would rather just keep it ourselves.
We had the money to do it Mhmm. And we were funding our own deals. So it's like, let's just flip it. We're doing, you know, so few of these a year. Yeah.
Let's just take it on.
Steve: Okay. So Doug sounded like the genius here,
Damon: by the way. I know.
Steve: I know. So
Damon: Yeah. The idea is I had to implement it.
Steve: So you go to TV, knock it out of the park, obviously, you know, challenging systems, but, like, you know, fourteenth and fifteenth and '16. Like, you guys just grown consistently every single year.
Damon: Yeah. An important part of the story. So we met some amazing guys out in Newport Beach. And and the different mindset I learned out there was people weren't interested in a business that made a money. They wanted to grow business and sell a business.
Mhmm.
Steve: So
Damon: we met these guys that had a $180,000,000 exit, $50,000,000 exit. You know, they were, to us, a a really big deal. We never had any exits, period. Yeah. And our post property exit, like, was our guy.
Wasn't Katie Mill. Yeah. No. No. So we allowed them to, join.
We had a board of directors at that time. So one of them ran a home national home building company. The other one was, way high up at ADP and had his own payroll company and other stuff. So we got them on the board, and both Doug and I, we're very eager to listen.
Steve: Yeah.
Damon: And they had much different scale goals than us. Like, no. Let me take that back. We all wanted to scale. They made it sound so easy.
Mhmm. So we were in California. There's just sellers advantage. Right. Let's go to Chicago.
We go get up and running Chicago and start making money. It's like, let's go to Philadelphia. We get up and running in Philadelphia and never really made money. But we started growing this before we had great system systems and processes. This is about 2016.
Yeah. And finally, we come to a a spot where the dust settles. We bought all this product. We thought it was good. Construction problems, contractors running off with money.
Like, we didn't have our finger on the pulse in these other markets.
Steve: Yeah.
Damon: And the dust settled, and we lost just over under $2,000,000 in these other two markets. Like, $1,800,000.
Steve: Wow.
Damon: Yeah. Because we're, like, we wanna scale, we wanna grow. So Doug and I have a private meeting outside of the other board members, and Doug's like, I'm sick of this. We're not doing this. Yes.
They have big brains. They've taught me a lot. Mhmm. Like, I learned a lot from those guys, but they oversimplified, resale real estate renovation, sell stuff. And and we didn't put up a big enough fight of how difficult.
Mhmm. So we then decided to go our separate ways. We shut shut down Chicago. We shut down Philadelphia. California, excuse me, was our cash cow.
Arizona was always a cash cow, but that was always held under the Doug Hopkins entity. And that's when we joined CG. And we went to CG, making money.
Steve: Before CG. Oh, yeah. They underestimated the rental component, the remodeling component.
Damon: At one point, we had a 100 properties in construction at the same time, and we had a 20,000,000, line of credit that we had borrowed on.
Steve: Yeah. And
Damon: we were up to our eyeballs, and Doug and I were funneling money into the company just to fund the construction.
Steve: Well, I think there's a lesson here potentially for Opendoor and Redfin and Zillow. Because, like because those guys just did what those two were saying at an even grander scale. Right? Like, what was it? Like, Zillow lost, like, $9,000,000,000 in one year?
It was something crazy.
Damon: Oh, crazy.
Steve: Right. Because you take these Wall Street ideas. Like, how about just just flip all the houses. Right. Not taking into account the amount of management required to actually flip houses.
Damon: And every house is a custom house. Yeah. Every house needs custom decisions. So we were always successful when I touched every house because I was good at making those decisions. Doug is good at making those decisions.
When we hired people, they made really silly decisions sometimes.
Steve: Okay. So we decide part ways there and then you join CG.
Damon: Yep. So now yeah. Doug and I owned a 100% of fifty fifty of sellers advantage, 100% of it. And we we think we did, like, 40,000,000 that year in, like, fix and flip volume. This is, like, full retail sales volume in California.
So we're like, oh, we're we're pretty big.
Steve: Mhmm.
Damon: And we showed up and, realized we had a lot of things.
Steve: Well, but still looking back, even then, like, that's still really significant. Right? Like, you you might have felt like you weren't there yet, but still pretty significant numbers.
Damon: Yeah. I mean, that was gross profit numbers on I mean, our net profit was it was good. Still, they were significant. When we told people what we did, they were shocked. But then behind closed doors, we're like, oh, crap.
We did this by sheer we're will power. Mhmm. Because it's not our systems and processes that we
Steve: thought we
Damon: were doing right.
Steve: No. Okay. So you you realize there's a lot of opportunities for improvement. Yep. So you join as you join CGs, you you recognize this.
So then what happened after that?
Damon: Well, this is the funny part where Doug doesn't look so good. He's like, okay. We need to fire our whole intake team, and we're gonna hire VAs from The Philippines, and we're going all in. And we're like, woah. Woah.
Woah. Woah. Woah. Woah. Woah.
Woah. No. No. No. I don't like that idea.
Yeah. So we kept teasing Doug, and he got really mad at us. But we took a handful of good ideas away. Yeah. Speed to lead was something we started tracking well.
Live answering and having a three minute response policy was something. How quick we could get out to appointment. Like, the things that today are absolute no brainers
Steve: Mhmm.
Damon: Because we were making money, we kinda just painted over those.
Steve: Profit covers a lot of problems.
Damon: Exactly. What and the market was going up that whole time.
Steve: Yeah. So
Damon: we had a huge eraser that was take wiping out our mistakes. If we were in a stagnant market, I I think we would have found out really quickly how poorly we operate.
Steve: Yeah. I mean, in 2014 to 2020, there's never been a bad year in real estate.
Damon: Right. And there's a little speed bump in 2018. October 18, the rates jumped a little bit. And in California, it they went wild. Like, oh, the sky is falling.
So for October to December 2018, oh, and we couldn't sell anything.
Steve: Really? Yeah. Yeah. But still pretty good.
Damon: Yeah. Probably not good.
Steve: Cover up a lot of your problems. Every problem.
Damon: Okay.
Steve: So then you start implementing systems. Who's running this?
Damon: Me. So I'm in charge of all of California. So sellers advantage is is my baby. Doug Doug put in more time when we were starting off. Nowadays, to be generous, maybe five minutes a month, he puts on it.
So sellers have managed really my baby. He's a 100% Doug Hopkins. Yeah. Obviously, we we conversate. We, you know, we make sure that we're on the same page, but we're kind of not.
Mhmm. I want to bury Doug every month, and he wants to bury me every month. That's how our competitive juices keep going, and we keep trying to one up each other.
Steve: Yeah. So then are you running just sellers advantage, and you're not doing anything on the Doug Hopkins side? Correct. So Doug is running his own operations, own CRM, all those decisions.
Damon: Yep. Whole different CRM and everything.
Steve: So you're legitimately, like, you are you guys are competitors.
Damon: Yeah. We're two separate companies that we both own have ownership. Mhmm. But I I want to in Mike Tyson's words, I wanna eat his children. Like
Steve: Well, Well and this is news to me. I always thought that, you know, there was a lot of cross pollination. None. None.
Damon: None of our employees work for each other. There is like, all the efficiencies we should use, we don't.
Steve: Yeah. Because I remember I came in one to Doug's office one time, and he's like, yeah. Here's our our Arizona team. Yeah. Here's our California.
And I'm, like, I'm running, like, a sales training. Right? Yeah. For the companies. And in my mind, I never asked Doug this.
Yeah. I was like, why are there two teams? Yeah. Because, legitimately, they are two separate entities. Like, there's
Damon: not Two
Steve: totally separate entities. Resources?
Damon: None. None. Every time we try and share it, it explodes. So we stop
Steve: sharing. Example.
Damon: So we had a sales manager, a lead manager manager. Mhmm. And he was running both of our organizations. And if Doug ever saw his numbers slipping a little bit, he would blow his top and say, he's spending all his time on seller's advantage. He's not that good.
That's
Steve: a pretty good impression.
Damon: Yeah. I I can I can do a better one? But he would blow his top and say this he's not working. He's working for you. He's your friend.
He's whatever, and and vice versa. And so, yeah, we kinda just agreed that we've built these models that we can still both thrive. I we've run very similar models, but at the same time, they're very different.
Steve: I mean, you're comparing notes.
Damon: Yeah. We compare notes, and I'm like, I don't like what he's doing, guys. We're not doing that. Mhmm. And he does the same to us.
What they're doing is stupid. We're doing this.
Steve: Yeah. Gotcha. Okay. So, you're growing steadily. Still no hiccups along the way?
I'm trying to find where the adversity is in sellers advantage. It sounds like there's no adversity at all.
Damon: Well, the adversity was when we we gave equity to those guys when we let them go on the board, and then we end up having to buy these guys out who do nothing for the company but bring us down. So we had to spend millions of dollars to get these guys buy their equity out because the company got valued. And yeah. I was just
Steve: really They are really smart guys.
Damon: They were the smart guys. Of course. They they were we were young dumb Arizona kids that and I say kids. We're in our thirties and forties. But, yeah.
I mean, we learned so much.
Steve: Mhmm.
Damon: And and the adversity really came that we got in over our skis. All of our money was out. And then for a year, I worked at getting rid of all these Chicago and Philadelphia product properties that were just losers. Yeah. And we keep having to pay employees and people on a team to get this to zero.
And every time one closed, we are losing money. And so I kind of just, like, I blocked that part of my life out, and I'm like, I can't control what's already been bought. That's happening. What I can control is today and every day moving forward. Yeah.
And so that's when we really just took off and just started stacking profits like crazy.
Steve: So we talked about speed to lead. Yeah. Three minutes, and so on. And we you know, the the lead into the show is 30,000,000 in one year.
Damon: Yeah. A
Steve: lot of freaking money.
Damon: Yeah. So just in California alone last year and just assignment fees was $30,000,000.
Steve: So what is is that all TV?
Damon: No. No. We're everywhere.
Steve: Okay.
Damon: At this point, we are TV, radio, billboards, YouTube, mailers. I can't even name them all. Like, literally, if somebody says here's a new idea, we have no problem spending testing for 250, 300,000. Yeah. If it might work, we're doing it.
Steve: It might work. Quarter mill. Write the check. Let's figure out how it works now.
Damon: Yep. Let's get a good five or six month run and see if we can make it figured out.
Steve: Yeah. So flooding the market. And what markets are you in?
Damon: So sellers advantage is in Orange County, LA County, Riverside County, and San Bernardino.
Steve: Got it.
Damon: So it's that SoCal market, it's not San Diego that has its own marketing MSA. And then if you go up to Ventura County, that has its own MSA too. But there's a slight amount of spillover in, like, North San Diego and South Ventura Counties.
Steve: What is so LA, Orange County
Damon: Riverside Riverside. And Bernardino. Okay. 20,000,000 people in that marketing MS.
Steve: Pretty good market. Pretty good markets. Pretty good markets.
Damon: They're tough markets.
Steve: 5,000,000 here. Yeah. So 20 mil, and in much better price points.
Damon: Much better price points, much worse price points for marketing. Like, what Doug's able to spend and get out of the Arizona market, we have to spend three times as much to get the same amount.
Steve: Really?
Damon: Oh, yeah. The commercials are more. Everything costs.
Steve: Everything costs more. But, like, gross margin, is it isn't it so better? Like, if you look at average fee minus the the cost bridge contract?
Damon: Yeah. It's still better.
Steve: Still better?
Damon: Yeah. It's still better because we've gotten so much better.
Steve: Yeah.
Damon: I don't think I I can't speak for anybody else. All I can speak for are are numbers, but I don't know of anybody, like, in our market that's anywhere close to kind of our footprint and what we're doing in that Southern California market. Yeah. I
Steve: was talking to somebody. I can't remember who it was. And I I think they were, like, saying I was part they're asking if I was part of seller's advantage or whatever. And the question was it was like it was just defeat in their voice. Right?
They're like, oh, like, sellers advantage. Right? And it it so I didn't realize how big, you guys were. I was in, I was in LA for LA tech week, a couple months back, and I did see, I think, a billboard or something.
Damon: It's like, oh, that's the name
Steve: of this company. But you guys are just
Damon: We've got hundreds of billboards. We've got yeah. We we're out there.
Steve: So, flooding the market. So in order to generate 30 mil in revenue, what do you have to spend per month?
Damon: Over 7 figures.
Steve: Over 7 figures. So easily million a month. That's your low months. Wow. Okay.
Does that cause you any stress?
Damon: Not anymore. I'm numb to it. Yeah. Like, at this point and really, I'm numb to it because of our people. Mhmm.
Like, we've been able to curate and build this unbelievable team. Yeah. And we are very open and honest with the whole team that every single one of us our our company motto is we all win together. So it it can't just be me getting rich. It can't be just them getting rich or the seller.
Like, the seller has to win. The company has to win. All the employees have to win. And so we're all rolling in that same direction of we all win together. And what that looks like is if they're able to hit all their metrics, we're spending more money.
Mhmm. We we cliche, but, like, we've got an unlimited budget if you hit your metrics. Mhmm. And so they all know we have their back a 100% and and vice versa. So the culture that we've built of just these hard charging, high performing people that are all in, That's what allows us to get there.
Yeah. We spend the money, and, yeah, that's part of the recipe. But I feel bad. There's been a couple people that have come in to try and match our spend, and they're gone forever after three or four months.
Steve: Yeah. How do your people win? So, like, you know, you have a really good month. How do your people win?
Damon: Well, they're all, commission based, but we really don't focus on money. Money comes naturally when you do the right thing Yeah. For the seller. So our whole company focus is getting those reviews from the sellers, and the sellers saying, this was the most amazing thing I've ever done. I trust everybody at sellers' advantage.
That's what we celebrate in our company. Every time that's my job. Mhmm. One of my jobs is when every review comes in, I get to send it out to the company Mhmm. Because that's our report card.
And that's where we pat each other on the back. We give, you know, ross and cheers for everybody. We all know we're getting paid. You know, when these guys are out there bringing in $3,000,000 a month, like they did in December, everybody's getting paid. Mhmm.
But that's not what we focus on. We focus on treating the people right, and the money just naturally comes. I I think a lot of people in this industry, they talk so much about the money and the money only, and I think that's a a great way to hit a dead end. Yeah. Because if you get the wrong people with the wrong motivations, it'll always be about the money and you always got people leaving and
Steve: so hope this doesn't come across the wrong way. It doesn't sound like you guys are particularly just good at marketing. You will just outmarket everybody.
Damon: We've so there's two things here. Yeah. We have become amazing at marketing, and we will outmarket everybody. I lost my train of thought. There was a third thing there that was really important.
I guess not. We will out market and but, yes, we we knowingly know that we could spend less and have a better return on investment. Mhmm. Return on ad spend. But we would rather keep our foot on the competitors' throats Mhmm.
And get a lower return on ad spend to make it more difficult for anybody.
Steve: You turn into the good old boys of the courthouse stuff. Legally. Or if you guys don't understand the context. Right? Good old boys are like, hey.
This this who's this punk coming into the auction? Hey. I don't want him to have a good time here. We're just gonna overpay for everything until he stops showing up.
Damon: Right. Yeah. I mean, that's yep.
Steve: No disrespect.
Damon: It's just No. It's what it is. That's this is a very competitive world.
Steve: Yeah.
Damon: And I don't wanna speak for your audience, but I think anybody out in California that's in this world, they've probably heard about us and there's probably, you know, lore about what we do and, what we built. But, no, we intentionally make it very difficult for the next person to come in. And I I think any big business does that. Right? Yeah.
Anybody with Coca Cola or whoever, you're marketing to make sure people think Coke, not anything else.
Steve: Yeah. It's been more in marketing and then, you know, pay lobbyists and
Damon: Oh, I remember the other thing I was gonna say is that it's not just we're great at marketing. We've built a company to thrive and a two x ROAS where other people go out of business at three.
Steve: Yeah.
Damon: So if they wanna compete, the model that we've built with the people that we've built, we can still thrive at it.
Steve: How does that make any sense?
Damon: I know that's what everybody asks.
Steve: Yeah. Yeah. I heard on that.
Damon: Just the way that we have the commissions broke down. The way we have it broken down that everybody gets paid because of our high volume, we were we're still able to go out there and push through where nobody else can. And we built that over time.
Steve: Is it the the comp you're saying the compensation model allows you of a two x ROAS? Or is it
Damon: We don't want to hit that number. Mhmm. We always hit more than that. Mhmm. But if times get tough, we can go down to that and still have a very good business where everybody gets paid.
Steve: So then is it because you guys have a lower, fixed payroll?
Damon: Yep. There's no fixed not no. Very low fixed, payroll, SG and A. We don't have an office in Southern California. Mhmm.
Everybody works from home. We have we office out of Mesa here, the building Doug owns and pay low rent. Like, all of our fixed costs and all the fancy cool stuff that people want and spend on fixed costs, we have none of that.
Steve: Right. So it's really just your monthly expenses outside of marketing is low relative to competition. Whereas they have to pay for office space. They have to have more for payroll. And that's the the luxury.
Right? Because, like, you got a brand. You've got good things going. You can attract top talent without having to make monthly, pay because you already have that marketing going. Any salesperson coming in knows that appointments are ready to go once they start working.
Is that fair?
Damon: A 100%. We feed Our salespeople don't ever have to hunt. Mhmm. Everything is spoon fed to them. Yeah.
So we're always looking for more talent. Mhmm. A lot of people get weeded out because if they show up and it's all about the money, probably not our people. Right? The the money will come, but it's believe in the system, believe in the people.
And, yeah. I mean, everything you said there.
Steve: Yeah. But it's, it's really unfair. I would say you're being mean. Right? Like, if you can thrive at a two x, like, it's pretty hard to compete against a guy, because this again, the the feelings are, like, even invitation homes.
Right? Like, how do you compete against these guys? Like, they don't have to profit. Like, I'm not saying that you're not profiting.
Damon: Right.
Steve: But, like, invitation homes, like, oh, or open door or off by, like, they don't have to profit. How do you compete against the guy that doesn't have to profit? Well, you don't have to hit three x. You only have to hit two x. Pretty hard to compete compete against a guy that only has a two x.
Damon: Right. At scale, especially.
Steve: Yeah. So then how are you finding great talent? You're saying, like, you sleep well, you know, like, 1,000,000 a month in marketing, like, it's fine because I got great people. How did you find the great
Damon: Most of them have been, like, referrals. Mhmm. Yeah. We've hired some some people blind, and most people work out. One of my mentors, he taught me like, in this industry, everybody's like, oh, fire them.
They don't work. Get rid of them. He taught me if you've gone through the due diligence and you think you've got the right person and they're willing to give a 100 percent, it's now your job as a company to give them everything to be successful. And that's really our model. It's like, I'm gonna give you every single opportunity to see succeed.
As long as you meet me in the middle with a 100% effort, you're not gonna
Steve: fail. Yeah.
Damon: And so when we hire people, we we have them and we have them long term. And it it sounds goofy, but they become family. Right? They come out and stay at the house, and we go to surfing at the lake. And we like, it it really becomes this family of we've all got each other's back.
I can't do it without them. They can't do it without me. And so we I mean, we go about it the hard way. A lot of times we'll put jobs on Indeed. We'll put we'll put different posts out there, and then we just have a pretty robust filtering process because there's a lot of people that say they're the right fit.
And, now we're just and we're super careful about our culture.
Steve: Let's talk about that filter. What are you doing to filter to get the wrong people out?
Damon: We have women do interviews. We have men do interviews. We have like, we just try and hit them with every different mindset, because we call ourselves a a safe space to work, and it's the opposite of what you think. You're safe to be yourself. Yeah.
You don't have to change because I'm gonna get offended about something. Mhmm. No. You get to talk how Steve Trane wants to be in wants to talk, and I don't get to get offended. Yeah.
We're a family. We're we just run with it.
Steve: Well, walk me through this. Right? I see a LinkedIn ad. Yep. I apply for it.
What what what happens in that process?
Damon: Yeah. It goes to our, HR. Mhmm. He does the first filter, then it goes to a sales manager. And first filter, meaning, okay.
Give us the resume. Let's run a PI score, and then I'm gonna do a in person interview. If I liked what I saw, it gets sent off to the sales manager. The sales manager then does an in person interview. If they like what they saw, then we send it to the COO who also does an in person interview to really vet it out.
And I I say COO, he's more of he's an accounting background. So he's like x's and o's. He doesn't get sales. He doesn't understand sales. Mhmm.
So these guys vetted out for sales, this woman and man, and then this guy is just the no nonsense x's and o's and finds out how people's brains work. And if they can make it through all three of those, then they can fit on the team.
Steve: So it's basically through this, I'm trying to think what is it like, it's a when you watch those game shows right
Damon: where Gauntlet.
Steve: Yeah. Gauntlet. Yeah. Yeah. Okay.
What's he checking x's o's for us? Like, what's he like, you're saying how they work? Like, what is he checking for?
Damon: You know, his brain does not think like mine. He's amazing. That's my right hand man, Paul. And he's incredible. I couldn't do it without him.
We tease him a lot because he's always straight to the point. Yeah. You know, a salesperson will be like, oh, this is like, oh, shut up and quit crying. Here's the numbers. You didn't do your job.
Right? But he's he really just cross checks to be like, is this guy gonna cry when I tell him the numbers? Can we be brutally honest? Because the most important thing for a salesman is to understand they've failed, accept it, and get better. Mhmm.
The people that go into a corner and cry aren't good salespeople. Yeah. And so he's really hitting them with the truth bombs of, okay, let's say you go out there one month and you're horrible and you don't bring any money. How do how do you fix that? Mhmm.
Well, I hope that doesn't happen. That's never happened to me. No. But what if it does happen to you? Mhmm.
Right? He just really digs in to he wants to see their logical brain working, not just their salesman graph.
Steve: Gotcha. I like it. So, I mean, again, like, you've talked with the leadership, talked about, like, how you get people in, and, you know, you run a fine tune operation. What are some other things, like, competitively that someone is listening right now can emulate from your business? They can take.
Right? Because, again, like, you went from, like, losing everything to now, like, is it 2 and a half no. What is that? 2 and a half mil a month on average? No.
Damon: Yeah. On average.
Steve: Yeah. Right. So, like, what are some other lessons that someone that's listening, could take from what you've done that's, like, worked incredibly well for you?
Damon: Well, it's gonna be contrary to a lot of what you hear out there, but Doug and I's, like, go to statement is, like, go out there and get some sales. There's so many people that get off on the numbers. Oh, what about metrics? What are my numbers? What about get some sales and figure that stuff out later.
Improve it as you go. There's a lot of people that just never get onto the field because they're so deep in running the numbers 20 times. And I get it. Like, that's that's the analyst brain in the these people. But if you get out there and you get on the field and you start playing, you'll learn to get better.
Like, our story is one of doing almost everything wrong. We just had willpower and work work ethic and pushed through it, but we didn't get to be where we're at without failing a lot. So don't be afraid to fail. And the next one is keep it simple. Everybody tries to overcomplicate it with, well, then I have to do this and I you don't have to.
I I believe our system runs off two x, and I believe I know, because of simplicity. We don't have multiple touch points. We don't have redundancies. It's like, no. This person knows their job, and it goes to this person, and it goes to this person, and we get paid.
We're done. Yeah. We don't have all these people jumping on top of each other and crawling all over each other. Yeah. It's just simplicity.
Simplicity and good communication wins the day.
Steve: Was that rocket science?
Damon: It's not. And if you've met Doug and you've met me, this community college got the better of me, bro. Like, it's not like we're some Harvard grads with business degrees. It's we're we're hardworking people who won't give up. Yeah.
And I think there's a lot of people out there just like that. You just gotta put in the time.
Steve: One thing I think, kinda, like, touched on this, but we haven't, like, dived deep into it is you do the right thing, and the money will come.
Damon: Yep. And
Steve: then you talk about the five star reviews. Like, that's that's what you celebrate. Right? We had, Kevin, with Renovo here, and, like, his company culture is, like, we celebrate the tens on that. Yes.
Right? Like, let's get as many NPS scores as possible. As as many NPS scores as humanly possible, and we celebrate, right, the wins. Right. Because we know that the customers are happy.
Sounds like you guys have that same philosophy.
Damon: Yeah. Exactly.
Steve: So walk me through, like, how you're able to ensure a a an excellent experience for a homeowner.
Damon: We can't ensure it. Like, we can do everything we can to make it the best possible, but we're in real estate and there's moving pieces. I'll I'll give you one example that I just a a review came in early last week. And it says gentleman, he wanted to buy a new build house. But in California, they wouldn't let him buy the new build house until his other house was sold.
So we got on the phone with them, and we called the sales rep and said, hey. We're sellers advantage. We're buying the house. He needs this house to live in until that one's done, and there was, like, a three month period. We're telling you, we're buying this house.
It's it's a done deal. So they let him buy the house, and there was this three month wait time. Well, in two months, they called him and he said, house is done. You got a week to move in. So now we're scrambling because nobody's ready for it.
We still thought we weren't closed until November. So we end up closing, like, two days late, from when the builder gave us this, you know, three alarm fire Mhmm. To close on time. And even though it didn't go perfect, we had great communication with this home seller the whole time. He understood what was happening.
He got a little frustrated, and and he left a five star review saying they were incredible. It didn't go perfect, but they communicated with me. I understood what was happening at all times Mhmm. And I would use them again. And, really, it came down to communication.
Steve: Yeah.
Damon: If you're transparent and tell people what's actually happening
Steve: Mhmm.
Damon: They're happy. Yeah. When you lie, lie, lie, and you get caught, they're limited. Right.
Steve: Okay. So you make it sound really so. Right? No one's gonna listen to this episode.
Damon: I know.
Steve: It's not gonna get shared.
Damon: I know. Trust me. I know.
Steve: So the part about so his instance, you just communicate effectively. Yeah. But there's something here also, like, do the right thing. Right? Which is I mean, I got sent something yesterday.
Another wholesaler sent me something yesterday about this legislation, this bill that's being written out. It's, it's asinine about making basically wholesaling. You cannot pay less than 82% of fair market value. Who even who even determines fair market
Damon: value? Yeah. Exactly.
Steve: Right? But there's this less legislation that's being written. Now my understanding is there's no chance being passed. Right? The guy's a moron.
But that's that's a whole other story. Right. There are people trying to pass this, this legislation and this regulation, this and that. And it's because there are a lot of bad actors.
Damon: Lots of them.
Steve: Right? So what are you doing to maybe not ensure a great experience, but, like, ensure, what's the one I'm looking for? An excellent customer journey perhaps.
Damon: Yeah. So there there's a couple things. Right? When we it was about ten years ago in California, there was this case where these people from a, HomeVestor franchise, they got they got, taken to court by the attorney general. And what they were doing is they were going and buying houses from these old people, and they would put list pendants on it.
Mhmm. And they would sue them into selling them at these low prices. Right? That's I say allegations. They they got found guilty and can't practice real estate.
But we made a conscious decision at that point where, like, hey. We're never gonna go after the old people. Mhmm. If an old lady calls us, even though we have a contract and this is a legal document, and she says, I've decided not to move. I'm staying in my house.
We drop it and run away. Mhmm. Even if it was gonna make a a crazy $100,000. Right?
Steve: Yeah.
Damon: The right thing to do and what I'd want somebody to do to my mom Mhmm. Is let her continue to live in her life, her house until she dies if that's what she Mhmm. So that's really the approach that we take is that we we never want to hit the radar of the government Mhmm. To say, holy cow. Look at this behemoth and look at all these lawsuits, and look at all these these sixty, seventy, eighty year old people they're suing into oblivion.
Mhmm. That's not the right thing to do.
Steve: Right.
Damon: Now if it's a 50 year old guy who f bombs my team, I'm after him all day long. Yeah. I'll go lose money on that deal to make a point. Mhmm. But we're going to do the right thing when it's the right thing.
Mhmm. Right? We're not gonna force people to sell their house and be home. We're we're not gonna yes, we have contracts, but we get enough of them that we don't have to compromise our integrity.
Steve: What are the touches you guys are doing? Because getting a bunch of five star reviews is not a simple thing to do. Like, Like, it's it's it's an aspirational target,
Damon: but
Steve: it's not like, alright, guys. From now on, we're gonna get a five star review from every homeowner. Never happened.
Damon: Right? Never happened.
Steve: So what are you guys doing intentionally as an organization to get as many five star reviews as possible?
Damon: So it's great communication throughout the whole process Yeah. From the, you know, inside sales team, external sales team, and then the transaction coordination. Just excellent communication. After that's all been done and we know they had a great experience, our external sales rep that went to their house and met with them actually calls them and says, thank you so much for trusting. The best thing that we can have is referrals.
If you have any friends or family, we would love to help them just like you've helped or we've helped you with. Is there any way or do you know of anybody that could use our services? And a lot of times, the answer is no. Like, we're these people are selling houses. It's not like they're selling, you know,
Steve: They're Netmaster networkers.
Damon: Exactly. So then the second question is, well, if you had a great experience, we would love for you to let other Mhmm. I'm gonna send you a link to our review sites. If you'd be willing to leave a review, it would mean Mhmm. And even though there's a ton of people let's say there's a 100 that had a great experience, 15 to 20 will leave a review.
Mhmm. So that's it's just the way it goes. I mean, we've been in business since 2014, And I think on Google, we're about to cross the 500 mark. Yeah. But they are all 100% legit positive reviews.
Nothing's been paid for. We didn't call our friends from all over the country and say leave reviews on my page. Yeah. These are real homeowners that have sold houses to us and they're telling
Steve: I think it's funny. I feel like you
Damon: can get that number higher. You can if you do things that are not legal, like monetize it. Mhmm.
Steve: But, like,
Damon: do you
Steve: things that I've done, right, is, hey, Damon. You know, it was a great honor being able to work with you. You know, hopefully, you know, you had a good experience. Like, yeah, I had a good experience. Something that would help me is, if you would leave a five star review.
And a lot of times, we know that it's it's difficult. It's time consuming. It's it's just it's a it's a big burden. I don't know if this would be helpful for you, but, you know, if I just kinda wrote down how I remember the experience and then you just kinda edit however you want, like, would that make it easier? Like, oh, yeah.
And then we would just do that and then send them reminders.
Damon: That could be. A funny story is what ours we hired a new sales manager about, a year ago ish. And his number one comment became and he's like, so do we send these guys a template? Because a lot of these reviews are, like, too good to be true. We're like, we send them nothing.
Steve: Yeah. This is all
Damon: off the dome. And some reviews are just like, awesome experience. We'll use again. Mhmm. But you're right.
So we're always working on that. That is part of the goal of our transaction coordinating team
Steve: Mhmm.
Damon: Is the percentage of reviews that we get from close transaction.
Steve: Yeah.
Damon: And so we always set a a higher goal. Our goal is 25%. Some months we blow that out of the water. Some months we don't. That's why I said it's 15 to 20%.
Steve: Yeah.
Damon: I don't know the actual number, but I know that we're not at our 25%.
Steve: Yeah. So, I'm gonna, give a shout out real quick. So, I'm gonna, give a big thanks to our sponsor, Beck CFO. Most business owners see taxes as their biggest biggest biggest expense. For real estate entrepreneurs, it's usually 6 figures or more.
Beck CFO helps clients cut their tax bill, keep more of their profits and skill with confidence. If you want a proactive plan instead of just filing paperwork, go to beckcfo.com. That's beccfo.com. Connect with my tax guys that I use personally, Beck CFO, today. One thing that, so I had Casey Ryan here last Wednesday.
Right?
Damon: Good friend of mine. He came to my house right after Yeah. Your spot.
Steve: And, we were kinda joking about, like, I didn't learn anything about tractor investing. Yeah. And so one night, we were just hanging out. You're like, alright. Let me tell you how to fix your tax problems.
Yeah. Tractors. And I thought you were kidding. No. Talk to me about tractor investing.
Damon: Yeah. So we work with, like, a financial advisor. Mhmm. Kinda like Beck CFO, plug. And they approached us with this, like, four years ago.
Mhmm. He said, hey, guys. There's this private company and they're growing, and what they're willing to do is they're willing to let private people buy all these tractors Mhmm. And then lease them back to them. They'll pay your whole bill and they'll pay you interest on top of it and you get to depreciate it on your own taxes.
Mhmm. So the first year we're a little nervous and we're like, okay. So Doug and I bought I think 7 or $8,000,000 worth of tractors the first year.
Steve: That's the nervous version.
Damon: That's the nervous version. Yeah. We're like, hey, let's let's do this because we need to get rid of some of this income. Mhmm. And so we bought it and sure enough like clockwork.
They pay the bill, I get, 15 percent on my dollars out. So we didn't send in the full $8,000,000. We only put 20% down.
Steve: Mhmm.
Damon: And we get a 15% return on our 20% down. Mhmm. So not only are we getting a return, but we gotta depreciate the full 8,000,000. 7,000,000 I forget which number. I think it was 7,000,000 for that first year.
And the whole year went smooth. We're getting our money. We're like, oh my gosh. This worked. Mhmm.
Steve: And
Damon: the amount of taxes we had to pay dropped significantly. So the next year, like, let's buy even more. And so we did it in a year two. And then this year, I think between the two of us, we bought, like, $13,000,000 worth of tractors because now we're back up to a 100%. Mhmm.
So it was 80 the first year we did it, then it went down to 60. Now it's backed up to a 100. Mhmm. So this year, we did a 100% bonus depreciation off, those tractors, and we bought some GPUs in there too. Yeah.
That's another story.
Steve: GPUs?
Damon: We basically bought servers at an AI farm, and we lease it back to the the server farm. And we get a 100% depreciation off that, and they're paying us 27% return.
Steve: So you're basically an AI investor?
Damon: Yeah. I'm pretty much OpenAI. Yeah. You can look at me like Croc or whoever. That's me.
What
Steve: am I gonna see you wearing, like, a caterpillar or a John Deere, outfit?
Damon: Well, we have a little joke. Every time Doug and I go by a tractor site, we're like, wonder if that's mine. Like because we got some behemoths. We got, like, 85,000 pound excavators and steamroll, like, everything. Like, whatever the company needs, they just send us a bill sheet and we're, like, I will buy it.
Steve: The stuff that you see it, like, when they're mining.
Damon: Yeah. We have every like, everything. And then all the way down to, like, little electric scissor lifts that go in warehouses and stuff. So, yeah, we've we've gone pretty deep down the the tractor rabbit hole, and it has saved us significantly on tractors because that depreciation. We will have to recapture
Steve: Mhmm.
Damon: After we sell all those tractors. They have a guaranteed recapture at, I think it's, like, 64 and a half cents or something like that. Mhmm. So we'll have to recapture that income. We just buy more tractors.
Steve: Mhmm. Yeah. So, yeah, you guys wanna save taxes. Talk to Beck's CFO. Buy tractors.
And, yeah, Casey was talking. He was just selling all his properties. Like, it's no longer worth it.
Damon: And and that's I think I got that into his head. Mhmm. Maybe not. But me and him have been talking a lot over the last couple years, and it's just been frustrating. Like, my repair bills keep hitting and and all the maintenance.
And I just don't know where we're at in the cycle, so I started selling almost all my rental properties.
Steve: Oh, really?
Damon: Yeah. I was just I was sick of it. I'm I'm writing off my taxes. I'm keeping huge gobs of income, and I'm able to put it into different investments. Mhmm.
Being lazy and putting in the S and P 500 is getting almost 20% a year.
Steve: Yeah.
Damon: And it's like, what am I dealing with these rental properties? Mhmm. I constantly get calls that the ACs out and, you know, name it. It just keeps breaking. And I think the straw that broke the camel's back was, like, three years ago.
I had almost half of my properties when they did the numbers. Like, I barely made a buck or I broke even, and the market wasn't appreciating. And I'm like, this sucks. Mhmm. Like, I I want out of it.
And so when I told Casey he could sell his houses and go into the tractors and other stuff, he's like, I'm sick of these Oklahoma houses. I'm done with it.
Steve: So, you know, I got into the business because of Rich Dad Poor Dad. I think a lot of people around our ages kinda because of Rich Dad Poor Dad. Because of promise of, you know, mailbox money. Right? And then, you know, before our show, a lot of people listen to Bigger Pockets.
Right? And you kinda graduate, you listen to our show. Right? And and you listen to Bigger Pockets, like, because you wanna acquire rentals. And then, like, they listen to our show, and, like, you and Casey are just ruining it for everybody.
Like, you, Casey, and Brent Daniels are like, it's not rentals. That's not it. Don't buy rentals for cash
Damon: flow. That's me. And and even though Doug has I won't say how many rentals he's got. I think
Steve: it's, like, 5,000. Yeah.
Damon: And they're all free and clear. I I'll let him speak for himself, but he's not actively buying more. He's like Well,
Steve: now is not the time to be buying.
Damon: Right. He's like, I'm keeping what I've got. Me and Doug had a handful of properties together. Mhmm. And when we were selling them, it's like, okay.
Do we ten thirty one exchange? He's like, no. Let's just get our money and run. Yeah. We're depreciating we're buying tractors.
Let's just take that money and put it in the bank. Let's be ready for a rainy day.
Steve: That's a good idea. So there's a lot you you know, you you went through mortgages. You went through posted properties, seller's advantage, tractor mobile. What is it, that you're most excited about with what you've got going on?
Damon: The most exciting thing I've got going on is gonna sound really counterintuitive. So this whole time, especially when we went to CG, everybody talked about how do I get into the owner's box. I want in the owner's box. And Doug and I believe that that's a fallacy
Steve: Mhmm.
Damon: In this industry. It is a very, very hard box to get into without a lot of resentment and people saying, you know, you're you're riding their back to profits. But I run a business out in California, and now I'm out here living in Mesa, Arizona. Mhmm. So what I'm the most proud about is building out this team that I can trust in, and they they believe in me.
I believe in them. I'm not in the owner's box, but I've able been able to shed all of those day to day operations. Mhmm. If I get hit by a bus on my way home today, sellers advantage doesn't miss Somebody else can just step in, whether that's Doug or one of the other executives that we've got. Not Doug.
Not Doug. He's already said that. He's like, I'll have to pay one of your people. But we would we don't miss a beat. Mhmm.
We've built redundancies in every portion that this industry is so built on owner operators. Yeah. And forever, I have been that owner operator, and I still am. I still love the decisions. I still being in love being involved in the meetings and the decisions, but it does not rely on my sweat equity Mhmm.
Where the company fails.
Steve: Yeah. I was very surprised when you told me you're moving out back here.
Damon: Yeah. I went on appointments for ten years Yeah. Every day. Never stopped.
Steve: So, yeah, I was very surprised. Yeah. And and I think that's probably you know, we we we kinda, like, skipped over that point, you know, as you're building out from 2014 until where you are today. You started to always manage. You were in appointments all day every day.
Damon: Me and Doug Hopkins were, like, copy paste. Mhmm. He goes to the appointments out here. I went to the appointments out there, and it was every day. I had a Tesla, and I would drive 500 miles a day across Southern California, go to appointments, whatever it took.
Steve: And California traffic's no joke.
Damon: Oh my gosh. That self driving feature was it no. It was self driving one point o, which was basically just like lane keep assist. Mhmm. But I trusted it enough that I have my iPad on my lap, and I wouldn't look up for half an hour.
Now that only meant I went a mile, but I was able to be on my iPad making my calls, doing my dials, putting my notes in the CRM.
Steve: Really?
Damon: Yeah. Without that, I could have never done it. Yeah. Nobody do that as illegal and bad.
Steve: Shout out to Elon Musk.
Damon: Yeah. Shout out to Elon.
Steve: Yeah. So he's creating value. Right? When they said, like, he's gonna be the first trillionaire, like, what create value created? Well, Damon was underwriting in traffic.
Damon: A 100%. It was
Steve: That's value.
Damon: I got a full like, if I had to go home and do the work that I was doing stuck on California freeways, I'd work till midnight every night.
Steve: Yeah.
Damon: I was able to do my four hours of driving while working literally the whole time and go home at night and actually be a dad when I got home at seven or 08:00.
Steve: So you're a full pilot, autopilot. I can definitely get behind. Yeah. Our friend, Wren.
Damon: Right? I talked him into getting that thing.
Steve: Well, he was someone taking in the commute on the highway.
Damon: Yeah. Between Atlanta or something. Right?
Steve: I was like, you're out of your damn mind. I'm a I mean, I'm obviously, you guys listen to podcast. You guys know I'm, like, like, the biggest Elon fanboy. Right? Like, I've got see, I'm on my second model three, and, my wife's, on her second model x.
Like, we're a Tesla
Damon: fan.
Steve: Yeah. There is no way in hell I'm gonna be going full autopilot on the highway going 80 miles an hour with my eyes down.
Damon: Takes a little faith, buddy.
Steve: I will On
Damon: a two lane highway like the 10 coming from California to Arizona, I did it the whole time. When you're on a single lane windy road, no way. But, like,
Steve: the full autopilot today is a little different than it was last year.
Damon: I've heard.
Steve: Right? Because, like, now I have faith. There's, like, a giant tire stuck in the road or, like, in the road or there's, like, shredded tires. I okay. I believe we can handle that now.
But last year, it was a shred shredded tire. It's driving right over that thing.
Damon: You're right. That's true.
Steve: That's no way. Yeah. So, yeah, Stop and go in LA. I was off the road. No problem.
Damon: Yeah. No. You're absolutely correct in that that I I've ran over lots of things.
Steve: Yeah. And
Damon: I did just hear, and I'd look in the rear view mirror like, what was that? I stayed in my lane. You stayed in your lane. Whatever was in it.
Steve: What do you wanna be remembered for?
Damon: You know, I think the word legacy gets thrown around a lot. Mhmm. And, it's kinda sensitive to me right now. My mom just died in December. Wow.
And she's an amazing woman. She had nine kids of her own, adopted four more special needs kids. She gave up her entire life and her whole retirement to take care of these kids that she lived at home till she died. Like, she she didn't have this magical retirement.
Steve: Yeah.
Damon: She purposefully adopted these children that would have gone through foster care their entire lives from home to home to home. And we're we're talking a couple of them with, like, very severe special needs. Blind, cerebral palsy, you know, 36, but five year old mind mentality. Mhmm. And I look at hers and I think of legacy and it's it's not gonna last.
Once her kids all die off I I even look at my grandparents who are amazing people, but you don't talk about them for years at a time. Yeah. So to me, I'm not really chasing legacy. I'm chasing memories. And it's something I've really had to fight because I hate traveling.
I'm just not a traveler. I I like work. I like being busy. I like structure. I like a schedule.
But I'm really unwinding that where, now that I've made money, I'm allowing myself to spend some money on memory makers like a boat. Right? Waste of money. I don't care. I'm gonna create memories.
We're gonna have fun with the family. Bought a nice house where the whole family can come and gather. I got three grandkids now, three granddaughters. Wow. So it's it's it's now all about getting everybody together so those good times roll as long.
Steve: We'll always have Boston chowder.
Damon: Yeah. That was good. It's a
Steve: great chowder.
Damon: Yeah. It was a good chowder.
Steve: What is your superpower?
Damon: It's changed over the years. But I think my superpower for a long time, it was kinda like ADHD. Like, when I put my claws in something, I wouldn't let it go. Mhmm. Now I believe what I've adapted to I I shouldn't say it's a superpower because I still have a way to go, but it's being a cheerleader.
So for a long time, it was like, oh, look what I built. Look what I did. Look what, you know, this is the Be and Doug show. And when you really step back and look at it, like, any of these mega businesses, which we are not, they're nothing without the people. Everybody says it's the people.
And I think being able to step back and and be appreciative and excited watching people grow Mhmm. I want to be so I I guess I'll circle that up. I want to be remembered by helping other people.
Steve: Yeah. Well, I mean, one one of the cool stories you shared with me is that you have a COO that you even have, like, on, like, retainer or something or a loan. Yeah. Right? What is that?
Damon: Yeah. So sorry. Party foul. So we we've gotten really to this level of somewhat excellence. You can always improve.
But because of that and so many people know their place and know exactly what to do, it's not like the COO every single day is is busy. In fact, he found himself with a lot of free time. And so he said, man, we've got a lot of experience and knowledge and, you know, we've we've spent $50,000,000 in marketing that we've learned a lot from. Let's go help other people. Yeah.
And so now we've got them loaned out kinda like a fractional COO to a friend of ours, that really wanted some help in a a Midwest market. And it's like, hey. Let's let's see if that can work. Mhmm. And we do it so that our CEO can make more money.
Yeah. Like, value his time, allow him to make more money where a side hustle can make him an extra, you know, 6 figures a month or a year.
Steve: Yeah.
Damon: And so we're we're playing with that because if if that's a good success, we'd be willing to help other people out. But we're gonna be very specific, you know. Yeah. If if you're an asshole calling 10 times a day saying I need you this, I need to like, we're not interested. We we wanna do it with good operators.
But, yeah, we want to my COO, we hired him as our controller slash bookkeeper. Mhmm. And he has so much more talent than that. And we've it was the scariest decision he ever made was to come to a little company like sellers advantage. Because at the time, we we were a little company.
And it's it makes me so proud now that he's like, dude, this is the best job I could ever ever dream this could be true. His wife's an executive at a big insurance company. And she comes home talking stinky her day was and how miserable and the corporate, All that corporate world, and he's just got a big smile on his face. Loving it. And and it makes me, like, a proud dad moment even
Steve: though I'm
Damon: his dad.
Steve: Yeah. Only thing about some last thoughts I wanna leave all the listeners with. Guys, if you guys got value from this, episode, make sure you subscribe. Even more disruptors coming on who will break down the exact moves that they're making to win. What are some last thoughts we'll leave all the listeners with?
Damon: Last thoughts. You know, I should have prepared for this, but I I think it's don't get stuck in the weeds. Find out I think as we all age, we really find out what's more important. When I was young, it was all money. Mhmm.
And then, you know, your kids grow up and my youngest daughter just graduated high school. And I'm sitting there thinking back, like, where did the time go? And I really beat myself up for a little bit because I missed everything. Like, to grow what I've grown, I didn't go to football games. I didn't go to baseball games.
I I had
Steve: work. Yeah.
Damon: And it was my superpower, but it was my kryptonite too on what matters most. Yeah. Fortunately, I was harder on myself than my kids ever put on me. Like, you were there all the time, dad. You you were there, but then I see other peers that are at everything.
And I would just say, there is a fine line. If you truly wanna build something, you gotta put in the time. You gotta put in the energy. You can't go to the owner's box six months into business. But don't miss out on what matters most, and that's really the people.
It's your family. It's your friends. It's people you trust and love, and and they reciprocate back to you.
Steve: Yeah. I I think that's a great way to end it. I'm so glad you came on. There's actually things I didn't know about you. That's why I'm telling you.
Damon: All out.
Steve: Thank you so much.
Damon: Thanks for having me, Steve.
Steve: Yeah. You're welcome. Thank you guys for watching. We'll see you guys next time.
Damon: Shout out to Steve train. Jump on the Steve train. Disrupt us.
