Done Over 1500 Deals From Selling Land

Steve Trang: Shout out to Steve Trane. Jump on the Steve Trane. We real estate disruptors.

Steve: Hey, everybody. Thank you for joining us for today's episode of Real Estate Disruptors. Today, we've got Paul Hersco and Willie Goldberg with Sunny Capital Group, and they flew in from Miami, Florida to talk about how they do 1,500 deals a year, an astronomical number. I am on a mission to create 100 millionaires, and the information on this podcast alone is enough to help you become a millionaire in in the next five to seven years. If you'll take consistent action, you'll become one.

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That way we can all grow together. And, so let's go ahead and jump into it. So I'm I start with Willie. What got you into real estate?

Willie Goldberg: Yeah. So it's been a little while. Started about six years ago. Started my career in investment banking right out of college. Did it for a few years.

Kinda worked the typical 9AM to 1AM type lifestyle for a few years. And

Steve: That's an investment banking

Willie: Yeah. Working schedule. Yeah. It's it's a fun schedule, but, over after a few years, determined that that's not the lifestyle that I wanted to live in. I learned a lot there.

I got a lot of good skills, but, while I was at my second gig in banking, kinda started realizing that it's not where I wanted to go. So I started looking for opportunities to get out of, the financial services industry and kind of become an entrepreneur and do a lot of things. So I kind of started looking around and trying to find niches to get involved with, and I found real estate, found bigger pockets. And, from there, determined that I wanted to get into houses. So I started really digging into wholesaling.

So that's a lot of the first the the path of least resistance to get into real estate and earn an active income. So, that was that was the first avenue that I went. And then I So

Steve: there's a lot to unpack there. So, starting off

Paul Hersco: deeper. His story gets way deeper. And then when I mix into the story, it gets even deeper.

Steve: Gotcha. So investment banking, this is you're working on Wall Street?

Willie: Yeah. I was working on Wall Street for a couple years.

Steve: So did you get some fancy degree to work or from, like, a fancy school to work on Wall Street?

Willie: I went to small school, Pomona College, liberal arts school out in California.

Steve: Okay.

Willie: It's a good school, but not finance oriented, nothing like that. And it was just right right out of undergrad, so no no bachelor's or no master's degree or anything.

Paul: Okay.

Willie: So just went right into it.

Steve: You want you jump into investment banking because I think some people that jump into it, like, you have to have, like, you know, a shiny degree from a shiny college. Right? And it's harder potentially to leave.

Willie: Right. So for me, I guess a lot a lot of people you do kinda need the the degree in order to get in or you kinda need an angle or something. You you gotta know someone. For me, it was just a lot of hustle. So I spent a lot of time hitting the phones.

I had a spreadsheet of, like, hundreds of people in the industry, and I was just cold calling them. So that's Cold

Steve: calling to get a job.

Willie: Yeah. Cool. Basically, cold calling to get a job. So that's

Steve: why really relevant experience for our industry.

Willie: Right.

Steve: Yeah. So it

Willie: was a lot of lot of cold calling trying to get my foot in the door. I had, like, an economics degree, so somewhat relevant, but not quite. I didn't have the modeling experience. I kinda got slapped in the face. Didn't wasn't super familiar with Excel when I got there.

So

Steve: So you took that, a little disillusioned, got into BiggerPockets.

Willie: Right.

Steve: Now BiggerPockets, up until recently, wasn't, like, a big fan of wholesaling.

Willie: Right.

Steve: So how'd you go from BiggerPockets into wholesaling?

Willie: So I there was I I remember just listening. I used to listen at my desk all day, to be honest. And that was, like, the single analyst in a in a group that like, very small group. So it was very obvious that I wasn't super focused on the job. But,

Steve: let's let's go to our analyst who's listening to Real Estate Show right now.

Willie: Right. I'm sure I'm sure there's plenty of analysts who are looking to get out of that position. But, yeah, I mean, I I heard there were still some people you can sort of listen to on BiggerPockets who are in wholesaling. So that and then I found some other pockets. I found Wholesaling Inc.

Started listening to that.

Steve: Got it.

Willie: And then for me, it was tough because I was living in Boston, and I knew that I didn't wanna live there long term. So I, I knew that I wanted to eventually go back to Chicago or somewhere else, to live. And I couldn't go on-site to make offers on properties. Didn't know how to build a team back then. So I thought that I had to be the one going outside to properties, making offers, and didn't, feel that I was able to do that.

So I kept listening to more podcasts. Finally found vacant land investing with huge margins, five times margins. People buying land for whatever cost and selling it for five times that. And that's really what attracted me towards it. And then, in addition to that, the idea that you can do all the due diligence remotely, so you don't have to go on-site to properties, make offers.

You could do all your due diligence looking at a computer screen, looking at Google Earth, and kinda seeing the partial boundaries of a property, and then making a buying decision within seconds. That's That's really what attracted me towards it.

Steve: And The virtual option has really made made it attractive.

Willie: Right.

Steve: So was your first transaction then a piece of land?

Willie: Yeah. So the first deal well, I bought a condo a few years before that. That was kind of a bust. But

Steve: As an investment or your primary?

Willie: Just as a bust. It's an investment. Yeah.

Steve: Okay. So was this a round of time you're listening to BiggerPockets?

Willie: Yeah.

Steve: So let's talk about that deal first before we get into land.

Willie: Sure.

Steve: So what what was the story with that deal? How why was it a bust?

Willie: Yeah. So I think part of the reason the thing with me is I like to take action before really thinking. And so I just hired a realtor and bought one of the first few properties that I saw Mhmm. Rather than kind of spending time learning an actual strategy and and getting involved. So I basically trusted a realtor, bought the property, and then just rented it up.

So Yeah.

Steve: So what made it a bust?

Willie: It was just a very mediocre, like, single digit IRR. Hard to scale, didn't want to, very capital intensive, hard hard to scale from that standpoint without, like, a track record, hard to raise money to to kinda do more of those deals.

Steve: So not everyone is a, an investment banker. So you might wanna break down what IRR is.

Willie: Yeah. Sure. Word.

Steve: IRR It's an important word.

Paul: Cash on cash? Come on. That's like we talk about it every day.

Steve: Yeah. So what's IRR?

Willie: Yeah. So maybe it is cap I guess I am looking for cash on cash. It's just the the cash flow after the mortgage, basically, in all in operating expenses divided by kind of the equity that you put into the purchase of the property. Right. So say you put in put in $50 on a deal, you get, I don't know.

If you get $1,010,000 dollars a year, that would be a great return. That'd be a 20% IRR. Mhmm. That's after mortgage debt service, and any operating expenses associated

Steve: with the property. Some people look at that as you were saying cash on cash. I think some people look at that as yield. Right. Right?

So just a different way to looking at it. Right. I think yeah. So single digit IR, which I think for most of the country really isn't bad if you're investing from the outside. Right.

Getting into it.

Paul: Right.

Steve: Right? So it really wasn't so bad. It just, for you, wasn't sustainable because I'm not a cash outlay.

Willie: Right. So for me, I it wasn't a bust. It was just a bust in the aspect that I was trying to make it a full time gig.

Steve: And it

Willie: and it that sort of niche being super capital intensive without buying discounted properties or getting assignment fees, it was hard, for me to do that full time. So it was a really hard niche to scale unless I decided that I wanted to raise a lot of money.

Steve: Right.

Willie: So so

Steve: so that was not good. So it was, like, after one con, you're like, alright. Scrap this plan?

Willie: Yeah. Pretty much. Well, after that, I mean, I I just started spending more time and actually doing research on some of the niches to get into. So after just spending some real time, the time that I should have spent before buying that first property, I realized that, oh, there's other niches out there that can actually make an active income and be a means for me to quit my job and do something full time so I'm not miserable pulling my hair out, staying till one to 3AM every night.

Steve: So what did you do after I mean, as far as, the next real estate transaction?

Willie: Yeah. So the next one was vacant land, so it was land.

Steve: Okay. How how how much time passed from your first deal to your second deal?

Willie: Yeah. So I bought the first deal in February 2017, so five and a half years ago. Next deal was probably April 2017.

Steve: So it was a very quick transit transition?

Willie: Yeah. It was it was pretty quick.

Steve: Got it. Okay. How'd you source that deal?

Willie: So that deal, I found I found a course on land investing, Seth Williams course, and bought it and basically used this strategy to scrape data

Steve: Mhmm.

Willie: And send out postcards. So for me, it was a lot of money back then spending $250 on a direct mail campaign. For us now, it's like we spend that in half half a day. Half a day. Yeah.

So

Steve: So you're saying I'll postcards? Saying I'm interested in buying your land?

Willie: Right. Just neutral postcards.

Steve: Okay. And then people were calling you?

Willie: Yeah. So that was that was interesting. People were calling me at my desk at work. I was frequently taking calls in conference rooms. And several times, there were people like I said, we were a super tight knit group.

I didn't wanna miss the leads. So I had several times where, one associate had, like, walked in on me just talking to sellers. But, Is

Steve: that a bad thing?

Willie: I mean, he he doesn't want me to he doesn't wanna know that I'm kinda screwing around in the job doing, doing a side hustle. Right. So, yeah. I just took the leads from that direct mail campaign, ended up buying a property. Actually, I don't know Yavapai County, I don't know how far that is from Phoenix, but

Steve: It's pretty close.

Willie: It's pretty close?

Steve: Yeah. I mean, I think it's, like, a few hours.

Willie: Yeah. So I talked to a bunch of sellers, managed those leads, worked them through them in Excel sheet. That was my CRM at the time. Mhmm. And ended up buying a property out in Yavapai County.

Steve: Called the realtor. Boston?

Willie: Yeah. From Boston.

Steve: Got it. I mean, I didn't even know where I would buy properties in Yavapai County from here. So

Willie: Right.

Steve: Alright.

Willie: Yeah. So there's software, where you go on the software and it pulls up the the parcel boundaries just like it would with a house. But

Steve: Right.

Willie: With land, there's really nothing to inspect.

Steve: I know. But it's just it's fascinating to me that you're in Massachusetts and you're just buying properties in in Yavapai County.

Willie: Right.

Steve: So alright. So you're you're sending postcards. They're calling you. You're taking the calls at your desk, and then you're just negotiating or not in your desk. In the conference room.

Yep. So you're just negotiating those transactions from the conference room and, like, buying them, like, cash, credit card, like, how are you buying these land?

Willie: Yeah. So they were to begin with, they're all super cheap. We still buy relatively inexpensive lots. Mhmm. So yeah.

The the first property was I think it was a little over two acres. And one thing that I missed in the due diligence, it had, like, a very big sharp dip in the back of it. So there was very little buildable area. And so I called up some realtors, and I had actually a couple realtors who, like, said that I was crazy for even considering buying it. But kinda did my own due diligence on the property and, made my own decision based on, it didn't seem like even even back then, I had the intuition that these realtors didn't really know what they were talking about.

Steve: Mhmm.

Paul: So

Willie: I kinda just disregarded their comments, ended up buying that property. But, yeah. I mean, the due diligence is super simple, super fast. Just What'd

Steve: you buy it for?

Willie: That deal I bought for $3.

Steve: And what'd you sell it for?

Willie: I think $9 cash.

Steve: Got it. So you paid $3,000 cash

Paul: Right.

Steve: And sold for 9. You can get title insurance on that?

Willie: That one I did. Yeah.

Steve: Okay. So not anymore.

Willie: Well, right now, yeah, not anymore. We've got a team. Well, we do buy properties with title insurance. Sure. If it's at that price point, a lot of times we do have, an in house title team that does a lot of the the title work checks to make sure that the due diligence is done, and we actually close those in house.

But I think more than half of the deals that we still we still buy with title, title insurance.

Steve: How was, so as far as closing on, I imagine that was pretty seem seamless close once you already have it under contract.

Paul: Right.

Willie: So the the

Paul: So how

Steve: was selling it?

Willie: Selling it, back in those days was selling on Craigslist.

Paul: Mhmm.

Willie: So just posting, going on my computer, still using my work computer at work, posting posting on Craigslist, just creating this stupid listing, doing everything myself. I didn't have any VAs or anything at that time. So, just kinda winging it.

Steve: How much were you making at that time when you're at your banking job?

Willie: It was, like, around 130 a year.

Steve: Okay. Yeah. So selling one of those isn't isn't enough to make a dent. So what

Willie: would you do after that? So after that, I kept doing it, on the side at that job. And over time, I actually ended up getting fired from that job.

Steve: For

Willie: So the the for is still unclear. Really? Yeah. And they were not super

Steve: It wasn't a performance situation. At the?

Willie: One of my one of the one of the directors caught me at a coffee shop twice, just on on on a weekend doing the side hustle. So Yeah. They claimed performance

Steve: and On a weekend?

Willie: Yeah. It was a weekend.

Steve: It caught you at a coffee shop on a weekend.

Willie: I I probably should have done a better job, but I, Oh,

Steve: I mean, the fact that it's a weekend seems to me like you should have been allowed to be at a coffee shop.

Willie: Yeah. Well, he he caught he snooped in on my computer. He's like in the he, like, walked in behind me and

Steve: No. I get that part, but why can't you be at a coffee shop when they're

Willie: Oh, no. I I can't. So, I mean,

Steve: they Investment banking so bad that you can't work weekends?

Paul: Or did

Steve: you have to work weekends?

Willie: Yeah. Well, I don't know. He I I've been caught a few times at that place just given the, yeah, given the small size of the group.

Steve: Got it.

Willie: And so, yeah, I got I got fired from that job.

Steve: Okay. But that was a blessing?

Willie: It was a blessing in disguise. I actually I threw an absolute fit when I got fired. I threw temper tantrum in there.

Steve: This story. Was this, like, Jerry Maguire? Like

Willie: it was, he he it was just a lot of screaming. A lot of lot of screaming. My director pretty much jumped when, like, when he told me, and I got I kinda got stiffed in my bonus. So there was just a lot of back and forth, and it was not a not the most pleasant experience.

Steve: Not the most professional from the outside?

Willie: Right.

Steve: Right. Alright. So you got fired. So the first transaction seemed to be seamless. What was, like, the next step after that?

Willie: So after that, I kind of took unemployment for six months. Started doing it on the side. I ended up taking another job that I took for about eight months, but then I started to sell properties on terms. Mhmm. So low down payments, low monthly payments, and just earning money on the cash flow, getting five, six times margins.

And that was really once I realized that there's a huge market for huge market for vacant land

Paul: Mhmm.

Willie: That's underserved because most sellers are only willing to accept cash and throwing in, like, building out a website and a payment processor in the background. The combination of all those things and kind of moving it into an ecommerce type business, that's really what allowed it to really get legs and scale. Because while, like, all this cash wasn't coming in, it was really building a specialty finance type company. And, like, the the floodgates opened because just I was serving a need in a market Mhmm. That didn't exist that that no one very few people were serving.

And the people that were serving it weren't able to really do it at scale. They weren't thinking, from, like, a fine they don't come from maybe a financial background and understand, maybe the mechanics and the balance sheet that they're building. So that sort of arbitrage really, opened the floodgates, and things started to feel a lot better. And I started to sell a lot more properties, because in our niche

Steve: Like, with discount loss. I mean, basically, you're saying that the image I have at least is of, you know, a website where you can sell land, at volume and Right. Getting people to come there and and buy the land with a credit card. You're just saying, like, that was pretty much in 2017.

Willie: Yeah. That was about in 2018. I didn't I didn't mess with that until maybe 2018. I didn't realize that that was the market that I needed to serve. Wow.

Yeah.

Paul: It was you were just doing, like, cash flips for the first year. Right? Yeah.

Willie: I was just doing cash flips and it was

Paul: Switched it.

Steve: But, I mean, that was

Paul: And I'm not in the picture yet, by the way, for this story. Like, I Right. I don't even know. I've never even met Willie in my life in by 2018.

Steve: Yeah. So it's fascinating, like, the you were able to find this need and fill it back when you're still doing this as a side hustle.

Willie: Right.

Steve: That's pretty impressive. So after that, when did when did you come along?

Paul: Yeah. So 2019 so just to back up, my background is I own I still own an Amazon FBA business that I had started in 2016

Steve: Mhmm.

Paul: Time frame. So my background is, like, ecommerce. And then before that, I worked worked for, like, this pharmaceutical company. I had to, like, go door to door, like, sales, cold call people, knock on their door, like, at pharmacies.

Willie: Mhmm.

Paul: So, like, that was my background right out of college.

Steve: You would go to pharmacies? And hospitals. So, like, a Walgreens or CVS?

Paul: No. Like, little ones. Right. It would I hated that job, but I it it was like I had a remote job in 2014 when remote jobs weren't a thing. Mhmm.

So I was able to, like, figure out what my side hustle was gonna be, which ended up becoming, Amazon because Amazon was super hot back then. Yeah. Right now, I wouldn't recommend it to anyone. It's so difficult, and it's very, like just not what it used to be. Mhmm.

But that's how I got my feet wet. So my my background was ecommerce marketing, online in sales. Yeah. So 2019, my brother-in-law who, Austin, who grew up with Willie because Willie, we grew up only like a town apart, but we never knew each other. But my brother-in-law one day, it was like in the summer, he's like, why don't you come with me to this party?

I was like, okay. Cool. So I came to the party and it was like a like a party bus or something and he was like, come meet my friend Willie. He's got this really cool business because and he's like, you're an entrepreneur. He's an entrepreneur.

Maybe you guys will, like, be friends or something. Yeah. So we, like, meet each other on this party bus, and we just start talking. He's like, tell me about his business, and I was like, that's, like, the coolest thing I've ever heard in my entire life. I've never heard of this.

Yeah. So we Well,

Steve: it was innovative. Right? Like Well,

Paul: there was people doing it at the time, but, like, super low key. Yeah. And so we we started building a friendship, and I just kept asking more and more questions about, like, what he was doing because I just couldn't stop thinking about how cool this is and Yeah. Like, what he had built on his own with, like, one at that you just had Nica at the time. Right?

One VA?

Willie: She was, yeah, the one full time VA.

Paul: Yeah. He had one person and he was, like, putting up big numbers. Mhmm. And I was, like, and I saw his website, and I, like, saw, like, the ecommerce aspect of it, and I was like, this could be way better and way bigger. Like, the this isn't even scratching the surface.

Steve: Yeah.

Paul: And so over, like, a multi month period, I basically convinced him that we should partner up and that I would, like, put my thing aside. He'll put his thing aside, and we'll form a new company, with the goal of, like, there's a massive opportunity here. It's a bunch of mom and pops that are not sophisticated with ecommerce. They don't know finance, and they don't know how to do marketing and sales. And we can build, like, a trusted place that people will go to buy land online with a credit card Mhmm.

And be the place. So that started in 2019. We, like, partnered up, and that's kind of how we we just randomly cross paths at a

Steve: party. So what were some of the challenges you guys experienced? So it sounded like even though it wasn't necessarily the only kid in the block, it was still newer. Right? So there are some other people there.

What What are some of the biggest challenges you guys face, or was there no challenge in, like, eliminating the competition?

Paul: Honestly, like, we don't we still to this day, like, competition doesn't really phase us. It's not like I think from our perspective is we're just doing things so differently from everyone else that, like, it's not super relevant. We kinda looked at, like, there's two or three, like, people that have been around for a long time and that have a little bit of a brand. I wouldn't say it's very strong. And we kinda just had them on our dartboard in terms of, like, these are the people that are, quote, unquote, the biggest and the best.

And within the first two years, like, I think as of last year, we're doing way more volume than them. Right.

Willie: Yeah. I think one thing that, it it's it we have a pretty big barrier to entry, I would say, because, like, those that are in our industry, in our niche land, a lot of them try to go upscale. They get they start doing a lot of land deals, and they can it's it's not so hard to scale because the product market fit for selling land on with low down payments, low monthly payments is not hard. Mhmm. It's it's there.

Like, there's huge demand for it. What people don't get understand how to, like, sort of resolve is once once they run out of money, because everyone runs out of money, how do you continue to grow and scale? And that's something I think the financials the financial piece, like, for us, we raised, a lot of money for the company, and structure in a way that makes sense and we're comfortable with. We're good with the reporting. So I think that financial piece is a really big barrier to entry that most people who get involved in this niche don't, overcome, and then they just start trying to scale by doing bigger deals or more cash flips.

So I think that's that's really one of the one of the big things that we've done.

Steve: So explain that. Why?

Paul: Like, at that like Why

Steve: do you run out of money?

Paul: Well, at the end of the day, like, we're a balance sheet business. We're just building a massive balance sheet. And most people don't understand that and, like, you know, it's like a a wholesaler, you know, someone flipping houses is, like, they just like, at the end of the day, you wanna make profit and you wanna make immediate money right for us. We're building this massive balance sheet that's bringing us recurring revenue. Mhmm.

But in order to sell to sell to scale it, you you need to have cash flow to keep buying more properties. And Willie's I like how Willie unpacks it if you wanna unpack that to

Willie: him. Yeah. Well, I guess, like, an average deal for us looks like we'll buy for $5. We'll sell it for $25 over eight eight years on average. So that's, like, an average deal.

Paul: And we'll get our money back, like, around month 16 for, like, that 5 k.

Steve: Mhmm.

Willie: Right. But the so we sell a property called for a few $100 down, a few $100 a month, but we're into that property for $5. But we're not just into that property for $5. We have marketing, sales, operations, expense to add on to that to add a new property to our portfolio. So call that $2,500.

So we're really into that property for $7,500, and we sell it for 25,000. And we're selling it for a few $100 down, a few $100 a month. So the time that it takes us to recoup that $7,500 is a a few years, at least around two two ish, maybe a little longer years. So, for us, you look at the you you look at an income statement on a growing business, a growing finance company, and you're gonna see negative income for that year for that, portfolio of assets that you just added to the books. So for a lot I think the the financial aspect confuses a lot of people and don't really recognize the the balance sheet, like, equity that you're growing year over year by just selling these lots over over a period of time.

So I think that's what, and we we had a coaching business for a little while, and we we we dealt with people who are getting involved and trying to running into the same issues as us, and that's really the biggest barrier that a lot of

Steve: people are balance sheets. It's what's the word I'm looking for? It's not obscure per se, but it's just I can say, you know, been doing this for fifteen years. I would say probably the first six or seven years of my business. I just didn't understand balance sheets at all.

They just didn't make any sense. Right? Like, for example, this is where I would argue with my account all the time. Right? Like, I bought this product for $5,000.

I put it on my credit card. Because it's on my credit card, it was an expense when I swiped it. But when I paid it out of my bank account, pay pay down that credit card, 5,000 comes from my bank account to my credit card. Right. That is a balance sheet situation.

That's an expense. But for me, it's like but $5,000 left my bank account. Like, how is that not an expense? So this time difference from when it's a an expense to coming off the balance sheet and this and that. It's just so counterintuitive, and it's like I kinda liken it to, like, when you have to regroup your brain.

Right? Your brain's worked this whole way your whole life, and now we have to reprogram or rewire the brain in a way that, for me, still feels completely counterintuitive.

Willie: Right. Exactly. When you yeah. Everyone's focused on it's it's super intuitive to focus on the income statement and say, oh, I'm only collecting this amount of money, but I'm spending this.

Paul: Mhmm.

Willie: Therefore, this this doesn't actually make sense when in reality, like, we're killing it. We're we're building huge equity in the balance sheet every single month. We're selling three, four million dollars a month on in adding that to our portfolio every single month. But the income statement doesn't look so pretty so that so people the ordinary person who's getting into this niche is gonna look elsewhere and

Steve: find very cash flow negative.

Willie: Right.

Steve: Particularly, is are you guys even financing this land?

Willie: So it's yeah. It's all on installment contracts.

Steve: So you're buying on on installment No.

Paul: No. No. No. We're buying it with cash.

Steve: So you're buying it cash.

Willie: Right.

Steve: So you're outlaying cash. So I guess a relevant or comparable statement might be if you're buying a house cash.

Paul: Yeah. Basically, we're buying a bunch of houses for cash.

Steve: Right. So you're out this capital right now. Yeah. It's gonna take a very long time to recoup that cash Yeah. More or less.

Right? So we're talking about buying 5,000 and then selling it for 25,000 over eight years.

Willie: Right.

Steve: Right? Then you finance it. I guess it might be like you're buying a, $500,000 house and you sell it for 2 and a half million. Right. Right?

Yeah. But there's only so many $500,000 houses you you can buy for cash.

Paul: Right.

Steve: Is that is that irrelevant?

Paul: Kind of. I would I would say, like, the easiest way to think about our business is, like, besides us being the this ecommerce platform that allows people to, buy like and that that's a whole another conversation about why this niche even exists, which we can get into if you like, which is, like, it's an underserved market. Like, a bank won't give you a $25,000 mortgage on, on a piece of land Not

Steve: worth it.

Paul: That that you don't have that you don't have, any plans to build on it, or even, like, a $50,000 lot. If you, I don't know, Yavapai County, you found a 100 acres for $50, and you didn't wanna build on it. You didn't wanna, like, do agricultural agriculture. You didn't have any plans with it. You just wanted to have it as an investment.

Steve: Just wanna own it.

Paul: Just wanna own it and go camping or whatever. That's you know, our you the list of things our buyers

Steve: That's not a financial asset. Right.

Paul: You can't go to the bank. It's very difficult to get go to the bank and get that even if you have amazing credit.

Steve: Yeah.

Paul: And so that's kind of how what, like, the market we cater towards is this, like, a dollar to a $100 kind of

Steve: Yeah. Area. Well, it's it's it's almost an illiquid asset because the market for buying that the demand for it is pretty low because the seller needs to sell it for cash unless they're gonna do a seller carry. Right? So you guys are paying cash, and then you guys are willing to accept terms, so you guys are the bank.

Paul: Right.

Steve: Yeah. So, yeah. I mean, it's it for sure, I can see why that's such a difficult model to break into. So that is one piece of the puzzle, though. Right?

You guys are buying properties and then selling it on terms. The other part too is you guys created a platform that made you guys also difficult to compete against. Is that accurate?

Paul: Well, not difficult because, like, you can go to our website and I you can I'd challenge you to go to anyone else's land website, and ours is better. Mhmm.

Steve: We What's the website?

Paul: Discountlots.com. And Brilliant URL. Yeah. Best $2 I ever spent. But you can go there, and our our website is better than anyone's like, I challenge anyone to to check out our site and say that they have a better customer experience.

Like, we have probably more reviews than anyone. Like, it's I basically when we built this, I looked at it like an almost like an Amazon listing. Like, to win at Amazon, you have to have the best listing, the best product, the most reviews, and you have to know how to rank it, and you have to have the best, media buying PBC. Mhmm. And so we basically just do all that, but on a website.

Steve: Right.

Paul: And that's how I think about our like, we have a we have a 10 person marketing team. We have

Steve: A 10 person marketing team. Yeah. Wow. Okay.

Paul: We have, like, a collections team of 10 people. We have, like, that for our portfolio to service our customers. Like, so you can call up, and if you need help with your property or you need to make a payment or whatever, we have a whole team for that. We have an acquisitions team. What else do we have?

Willie: Our our biggest team, our sales team.

Paul: Our sale we have a yeah. I don't know. Long long day today. But, we have a 20 person sales team. So you can go to discountlots.com right now.

You can call. Mhmm. And someone will answer right away and help you find a property that you want, like, basically, any hour of the day. And that's kind of, like, almost modeling it off of Amazon, like, just the best of all of it and the best prices. And, like, that's just kind of, like, what our philosophy is towards it, and that's why I think it's taken off.

And then you mix in this finance piece of it where you actually know what you're doing with the balance sheet and know how to scale it. You get kind of the best of all the worlds, and I think that's probably why we are where we are.

Steve: Yeah. I mean, I was trying to use the the the houses example earlier, but I would say probably the most comparable model is just the game of Monopoly. I mean, you're just buying these things, and then when someone hands on it, they have to pay a lot of money. So you just have this, like, gigantic Monopoly board. So I

Paul: like that.

Steve: The so we talk about, you know, 1,500 deals per year. Where are you sourcing the land from at the moment?

Paul: Where are we sourcing it from? Just private owners, one by one.

Steve: So at this point, are they reaching out to you, or are you still doing outbound marketing?

Paul: Still outbound. And then in in addition to, like, our for discountlots.com, we have, like, a a flip team that provides additional cash flow for our business. Similar to, like, you know, flipping a house, we flip bigger deals, you know, like, where we'll buy it for $200 and sell for 400 or something for, like, commercial or, an infill lot in, like, a major city where we know what we're doing. Those deals come across. And so we also have that as part of the mix where we're not

Steve: trying to get But, predominantly, it's it's land. Oh, yeah. It's all land. So how you're talking about outbound marketing. Like, if someone were listening right now, they say, okay.

Well, I like this model. I wanna do this. How can they source the same land?

Paul: Yeah. So, I mean, the easiest way to get land is just, like, similar to it's the same thing as trying to get a a a off market house. You're cold calling. You're sending out mail. You're not knocking on doors.

But Right. You don't really have to drive for dollars in this niche niche. Yeah.

Steve: But, So we had, like, we had Jack Bosch on the show. Right? Yeah. A fellow CG member.

Paul: Yeah. Yeah.

Steve: And I when he was on the show, he said they just send out contracts. Right? They just identify the pieces of land they want, and, and I think it was they would send out offers for, like, some percentage of tax value. And then they know if they send out this many pieces of not pieces of mail, if they send out this many contracts by mail, a certain percentage would just come back signed, which was mind blowing.

Paul: Yeah. That's that's, like, that's how we do it. It's just You

Steve: guys are just sending out offers.

Paul: It depends on the area. Some we like where it's there it's, like, a hotter area, for example.

Willie: Like, if

Paul: you wanted to target a major city in infill lots, it's not gonna work.

Steve: Mhmm.

Paul: But, you know, for in Yavapai County, yeah, you could send out a piece of paper that says I'll buy your 40 acre tract for $5. And there's a little signature line on there, and it comes back.

Steve: Right.

Paul: That's how we get it started.

Steve: So, you send out the offers. Homeowner gets a piece of mail. If they don't sign the contract, what happens then? They they call you guys?

Paul: Yeah. Call, negotiate, whatever.

Steve: So then the rest of the part what, rest of the process then is pretty much the same. It's as if you're buying a house. Yeah. Right? You're doing outbound marketing.

They're calling you. You got a sales team. Right? And then you contract it and then you go through. Is this bill predominantly discount lots or is it other dispo processes

Paul: as well? So, like, it's discountlots.com. Mhmm. That's like, our 20 person sales team is for discountlots.com. So, like, you can put your information in, and then a salesperson will talk to you just to if you wanna buy a lot.

But, then our dispo for, like, the cash flips is different. Like, a 200,000 property, we're not gonna put on our website because we'll get our money back by the time we're dead.

Steve: And I remember you guys did this presentation, when you guys first joined Collective Genius. Right? He's like, oh, here's what we're doing, and we're doing was it I think it was, like, 100,000 a month. Or is what was the number you guys were talking about?

Paul: About that first CG presentation. The very first CG presentation. We got super lucky. I, like people to this day, we've been in for over two years now. People come up to us and be like, oh, yeah.

I remember your first presentation. Like, that was during COVID when they, you didn't have to go to the breakout room. So everyone like, every single member was in the main room, and it was, like, our first thing. Mhmm. And we were on stage in front of all these people, and everyone was like, woah.

Steve: Right.

Paul: And then that was kinda how we got our first kind of really good influx of cash was from people in the room that were like, woah.

Steve: Yeah. Well, you guys are saying that we're doing 100,000 a month, and we're running No.

Paul: It was it was a lot more than that at the time.

Steve: It was a million a month. It was a million a month. At least

Willie: a million a month. Yeah.

Paul: You guys

Steve: are saying, we're doing a million a month, and we're out of cash.

Paul: Yeah. Yeah. I was like, that sounds alright. It was, like, close to, like, a million or something.

Steve: Yeah. I remember. So, yeah, it it kinda took it over by storm. So, talk about that. So you go in there.

Big bold statement, but also we're out of cash. And I remember witnessing it. Right? You guys fixed that cash prom almost instantly in that room. You wanna talk about that experience?

Willie: Yeah. I think, Frank, was the moderator at the time, and he kinda said, alright. I got I got five or six people that I'll put you in touch with, that I'm sure would be at least interested in having a conversation. So, we met with, I guess, what ended up happening from that is that we talked to Mike Zlotnick. He was one of the several people who we talked with.

There's a number of guys in CG that have a fund, or at least capital resources to put to work. So we met with Mike. He kinda syndicated a deal between himself, Jason, put in, a good amount, Connie, Ken. Ken. Yeah.

And, yeah, it was them four, and then I think Fitzgerald put in some. And then, yeah, he had some in the deal as well.

Paul: The crazy part was is at the time, we were doing, like, 800 or a million, whatever it was a month. And, that was, like, our first full year in business, and we had, like, 10 people at the time, maybe.

Willie: No. We had more than that at that time.

Paul: We didn't have that many people.

Willie: 30, I think.

Paul: No. It was a lot less than that. And I remember, like, after we got that influx of cash, we, like, within three or six months, we doubled the business. Yeah. And then it's kind of just gone from there.

But, like, that single event of us being on stage completely changed our business. Like, we would have figured it out, but I don't think we would have been able to put that much rocket fuel on it.

Steve: No. Definitely not. I mean, it was almost like an episode of Shark Tank. Right? Where, like, here's the situation you're in.

It's like, alright. Here's the money. Right? Everyone just throw them on at you, which Yeah. The power, right, of of being in the right room, being in the right mastermind.

Paul: Well, that was our intention. It was like, we were and we were at the point where we were on Google, me and Willie, ourselves, sitting in our office cold calling, like, ABL lenders and, like, just trying to find someone that would understand our situation. We were, like, we didn't know what to do, and we ourselves were cold calling, and it was just getting nowhere. And two different people were like, there's this group called the Collective Genius. Mhmm.

I I bet you they could help you with your problem. And then it was I don't remember what the fee was at the time to join Collective Genius. And at that time, it was, like, a lot of money for us. And, I mean, it still is a lot of money, but it was just like, alright. We're gonna join this group.

And if we don't figure out the money situation, we're gonna learn something. But, like, our goal was, like, we need to figure out this money problem where we're screwed.

Steve: Yeah. Which goes back to the point you may you're making from minutes ago. Right? Like, the reason why people don't scale in this in this niche is that they run out of capital.

Willie: Right. And, yeah, the traditional sources like a bank or whoever, but even specialty lenders are a little, wary of it.

Paul: We don't fit in any like, no one's really done at our gone gotten at our scale. So even to this day, like, banks still don't understand it, and that's kind of another thing, like, that we're trying to solve now is to get to the next level. But, like, we it's not a house. So, like, a bank doesn't understand what we're doing. Like, we don't fit in there, like, underwriting criteria.

So it's still this situation of, like, needing to use private money instead of getting, like, you know, a line of credit to keep growing this business because most people just don't understand it, and we're and it's not a traditional

Steve: Right.

Paul: Asset.

Steve: Definitely not conventional financing.

Paul: Exactly.

Steve: And then one other thing I I I really appreciated. We stole this idea from you guys, was you presented SCG talking about one of the simplest ways to improve your sales team is to just hire a VA for 6 or $7 an hour and just have them listen to the calls. Right? I remember you talking about that. I was like, that's a really good idea.

I think I voted for you, on that on that one. And so you wanna talk about the power of that what of how that, improved your sales team?

Paul: Yeah. I mean, that was I think that was Willie's invention. He basically got an auditor. He basically hired a bunch of auditors

Willie: Mhmm.

Paul: From The Philippines to audit everything in the business. I let him kind of unpack that.

Willie: Yeah. I mean, it it wasn't just sales calls. It was well, it was sales calls. Like, doing that, making sure that people are saying the right things on the phones, making sure that they're actually following the script. But then, also, it's, like, just making sure that, all the checks and balances are happening, making sure that we send out, like, cashier checks, making sure that everything ties to the books, and just, yeah, going through, like, doing I mean, right now, we have an audit.

We have multiple auditors. We've got one who just looks and make sure that, all of the ends tie in our CRM. We're moving into Salesforce. That's a big deal. But, the second auditor is well, we've got people listening to calls too, so that's another thing.

And then the third thing is is auditing all the KPIs in our business.

Steve: Mhmm.

Willie: And we right now, we have over 250 different KPIs.

Paul: Yeah. There's a full time person's job just to make sure that all the numbers are tidy.

Steve: That's incredible.

Paul: But the cool part is is, like, we get daily emails of, like, this is where your portfolio is to the penny. And I know, like, we have, you know, five five collectors, or 10 collectors, and I know how much is in their portfolio, how many people, are behind, how many people are on time. And so we know, like, where our money is every single day.

Steve: Yeah. That's very, very detailed, and that's awesome. And then one thing I have to say, you know, thank you. Like, you guys actually I mean, you guys are here, but not too long ago, you guys sent your sales team out here. Right?

Yeah.

Paul: Good to meet you. Well, that that our acquisitions team. Yeah.

Steve: Yeah. So that that was pretty cool. Right? Good to meet, four of your guys. I I understand three of them are still with you.

Willie: Yeah. Ted, Mike, and Chris. I'm sure they'd love a shout out.

Paul: Yeah. Yeah. Give them yeah. We were with them yesterday. They were like, tell tell Steve I say hi.

Steve: Yeah. They're really good dudes. And then, at some point along the way, you figure it out, you want to scale this VA side of the business.

Paul: Like hiring VAs?

Steve: Well, you guys hire VAs, but then you guys are are

Paul: Yeah. So so, basically, like, we have, right now, about roughly 75 employees and over 50% are overseas. Mhmm. And kind of the philosophy behind that has been, like, we can get the best talent from around the world by using the right sort of systems, checks and balances, and, like, testing, to recruit high end talent Yeah. At a fraction of the cost that is in The United States.

And so through that, we've kind of just seen a lot of people and seen a lot of things. And, when you have 75 people, you kind of know what to look forward to. It's a crazy number. I know. It's it's crazy.

Yeah. And so we kind of, like, have quietly started a little, like, VA business for real estate professionals because it's basically the same systems that we use for our business. And, you know, we can you know, someone that wants to get a VA or an auditor or whatever, like, they're all kind of vetted the same process that we vet. So we just had so many candidates coming through, and we just didn't know what to do with them because we're like, we have too many people. So we we kinda started this little, VA service.

Steve: Gotcha. So if someone were listening, how would how would that VA service be valuable for them?

Paul: I think it's great for, like, anyone in the real estate industry that is, you know, like Willie when he first started. I mean, honestly, anyone that wants to get, you know, get more appointments. Like, we have a whole appointment setter team that will, cold call on a dialer for you and

Steve: Mhmm.

Paul: Get more appointments for your team, transaction coordinators, even, like, managing your social media. Like, we just it's the same people that work for us. It's the same process.

Steve: And I noticed your shirt says defund the HOA. Well Are you trying to send a message somewhere?

Paul: Maybe. No. I, I wanted to get the Defund the IRS shirt, but they ran out. There's one they're just sure that says, Defund the IRS.

Steve: I I I I totally stand behind. No. I have not seen that, but I totally stand behind that shirt.

Paul: No. I think I think it's funny because I live in Florida, and everyone lives in an HOA. Yeah. And it's even funnier because my dad's the president of our HOA. He lives on the same street as me.

So I like wearing this shirt because I think it's really funny.

Willie: Yeah. And I guess last thing on the on the VA company. So our company is rhire.com, theletterrhire.com. And what we do differently is, we we live and die by the predictive index and a lot of that testing. Mhmm.

So we and our recruiter's super good. He's out based and out in The Philippines. He hires the best talent out there. When I first got started, investing in real estate and hiring VAs, I went through at least five or six before I got one that was good, and that's because I didn't really know how to think about hiring. I thought that everyone out there or everyone that I could get as a VA was is pretty much the same and not detail oriented, not helpful.

So I had to just recycle through a bunch of them until I kind of found one that's right. And right now, we have it down to a great science on how to hire a good salesperson, a good admin person, a good, marketing person, whatever you guys kinda need as, as as an investor getting into the space. So we're we're really good at that.

Paul: I did a really bad job pitching the VA service.

Steve: That's right. Someone had to do it. You guys

Paul: are incredible. The the the the real differentiator is, like, we kinda built, like, a back end platform. So, like, let's say that you wanted to, hire a transaction coordinator. You can log in to our thing, and then, they'll all the candidates already be there. You'll see their PI.

They'll record it there'll be a recorded video where they'll talk to you up so you can instantly hear if they have an accent, if it fits with what you're looking for. And, like, my biggest frustration when, you know, we've gone through services and hired all kinds of VAs, the biggest annoying thing is, one, not knowing what you're gonna get Mhmm. Just based off of a resume. So, like, we kind of eliminated that. And then the second part that's so annoying is, like, you the back and forth.

And so it's the back and forth and then, like, not knowing what you're gonna get. So, like, you get a video from the VA, and they'll explain why they're good or not good or good at whatever you're hiring for. And then if you like the person, you can just click the Calendly link

Willie: Mhmm.

Paul: And schedule a call with them. Yeah. So

Steve: This is like a almost like a dating service.

Paul: A 100%. But you have all the the you have the entire, like, scorecard on the back end. It's not just a resume. It's, like, who they are, like, how precise are they, how high is their a, how high is their d, and and and we're only gonna place so let's say you want a transaction coordinator. We're only gonna place with the same PI criteria that discount lots hires for.

Steve: Right.

Paul: So it would be like You're

Steve: gonna hire them. So unless you had these things and you're creating a a a platform where they can see those same exact things.

Paul: Right. So they need, like, a transaction coordinator, you gotta have a high d. Like, you have to, like, be precise. And so, like, you're gonna see, like, five candidates that all have a high d. Otherwise, they're not gonna be put in the pool for you as a VA.

And so, like, in our minds, we just kinda looked and saw, like, all these other VA services out there, and we're like, they're just not making they're not hitting the mark. Yeah. And so we're kinda launching it now, but that's, like, the premise of it.

Steve: Cool. And then, you said, you know, 75, 80 people. So we talked about there's 10 there's 20 on on discount lots that are selling.

Paul: Yeah.

Steve: 10 collection, which is really working with people that have bought something.

Paul: Yeah. Customer service slash collections.

Steve: Yeah. And there was 10 what was the other 10?

Willie: Acquisitions, and then operations, we have about at least 10 in The Philippines.

Paul: Marketing Administrative. Administrative work. 50.

Willie: So marketing deal team is about 10 to well, we've got about 10

Steve: What's deal team?

Paul: That's that's, like, Ted and Mike and So we've got the acquisitions team. Yeah.

Willie: We've got 12 callers for the deal team. We've got those four acquisition guys in a US based, and then we've got 20 on the sales team. So that's 36. And then we've got 10 on the marketing team, 10 on the, customer service team, about 10 to 15 operations. Got it.

I'm probably missing something somewhere.

Steve: Oh, probably. But, I mean, you're looking at that. Right? So, but this is what it takes to do 1,500 transactions a year Right. To do you guys saying you're on pace for, like, $40,000,000.

Paul: This year. Yeah.

Steve: It takes 75, 80 people to make this happen. Yeah. So question

Willie: for

Steve: you guys here then is how well are you guys sleeping?

Paul: Depends on the week. No. I we sleep pretty good. I I I I'm I'm very proud of what we've built.

Steve: Mhmm.

Paul: Very proud of it. And, So

Steve: it's a pretty robust system with the with I mean, this is a this is a large organization. It's a large number of transactions. It's a 100 plus deals a month. Yeah. Right?

So it's pretty robust, pretty hands off.

Willie: I would say I I'm pretty proud of, like, how I mean, Gary Harper has helped us with create our meetings and cadences, that kind of thing. I think our Monday meeting, for me at least, is the most important meeting of the week, and it's, like, two hours this last week.

Steve: Mhmm.

Willie: And it's just going over every KPI, every, all the issues from the from the prior week, every everything that we need to talk to as, a leadership team, and making sure everyone's on the same page, making sure that people are accountable for what they're supposed to do. And I think that meeting on Monday sets the tone. And I I I don't I mean, we're not we don't have to kill ourselves if we don't want to.

Steve: Right.

Willie: Yeah. I think if even if we just dedicate one solid date of the week to just operations, we're we're probably set in a good spot. Everything else is really focused on growth and fixing fires. But

Paul: Back in April, we, like are you basically asking, like, do we have a good work life balance, essentially?

Steve: More or less. Yeah.

Paul: Yeah. So, like, back in, April? Yeah. April, we went or at yeah. April, we Willie and I went, with our significant others, our girlfriends, and hiked, Machu Picchu.

We camped, like, in tents for four days, and it was, like, 27 miles and, like, 15,000 feet up. And we had our phones off for a week. Nice. Like, no one could contact us. And we came back, and I was, like, kind of I mean, it was great, but there was, like, no problems.

And I was, like, that was, like, the test. So we were, like, we're gonna do a test this year and see, like, how good is our organization running? And that was the test, and we passed the test. So that was, like, a big moment, because, honestly, like, when you get to a bigger size company, it's not even really about the real estate. It's about, like, learning how to run an organization and Yeah.

All that. And it's a totally different ballgame, and the problems you deal with are way different than, like, how to, you know, do a creative finance on a flip or something. Right? It's a totally different set of skills, and we're learning those skills every day. It's it's it's not easy.

Steve: Well, Well, I'm asking these questions, right, because I'm not at this scale, you know, but we have, you know, the overhead. We have the employees. We have all these different departments. And, like, the bigger the organization, the more problems they are there are and the more complicated the like, because if it's a problem that gets to you guys I don't know about you guys. Like, for me, if it's a problem that gets to me, it's a really difficult problem.

Right? It's not like, oh, just do this.

Willie: Right.

Steve: Right? It's like, alright. Let's close the laptop. Let's close the doors. And, like, let's just break this down from beginning to end.

How did we get here? Those are the kind of problems I deal with. I imagine those are the kind of problems you guys

Paul: You'll you'll like this one. We were, at at the Cubs game yesterday, and all of a sudden, my phone starts ringing of people that wanted to sell their land. And I've never my personal cell phone, I've never had it ring to my phone ever in three years that we've been partners. And some people at the company heard from me that day. Something something got messed up with our answering service, and it and a mailer hit, and it was forwarding to my personal cell.

And I'm like, what is going on today?

Steve: Right.

Paul: So not a big problem, but that was a fun problem to deal with yesterday.

Steve: Yeah.

Paul: But, yeah, the problems I mean, we we deal with some interesting problems just like when you're at that scale and there's you know? And we're playing with big dollar amounts. It's not little dollar amounts. And so you have to be very calculated with what you're doing because there's a lot of risk.

Willie: Yeah. Yeah. I mean, I think one one thing that we do, we is just holding people accountable, making people take responsibility, take ownership over their department, and anything that's all the problems that are associated with their department. I would say one thing that Paul and I are not is, at least I'm not. Paul's a little bit more of a micromanager, I'd say.

But, I I I really allow people to take responsibility over and ownership over things, and I try not to respond to Skype in my messages throughout the day, and really just hold people and put their feet to the fire. And, if there's something that needs to be, talked about, I just add it to Asana. We talk about it on Monday. It's not gonna bother my week. I'm not gonna just run-in a million directions.

And on that Monday meeting, I hold them accountable and make sure that they handle it the following week Yeah. Rather than fires getting sent to us, and then we we have to deal with them. And then, at the end of the day, now I'm responsible, not them. So you gotta if someone bothers you, you gotta bother them back and hold them accountable. Yeah.

That's kind of the management style that I've sort of learned.

Steve: I like it. What kind of marketing budget do you guys have to run the operation you guys are running right

Paul: now? Like, you're talking, like, outbound? Like, because there's there's two sides.

Steve: Marketing and there's overhead. So I'm first starting with marketing.

Paul: Well, no. But when you say marketing, are you talking about running discountads.com or acquiring properties? Combined.

Steve: Let's let's break it out.

Willie: Acquisition is probably, like, 30 to 50 a month just on mail, direct mail.

Steve: Mhmm.

Willie: Marketing expense, we call it a $100 a month. Like, Facebook ads, Google ads, driving traffic to the website, trying to sell properties.

Steve: $100 a month Right. To send people to your website. Right. Very healthy amount. And then what's the overhead aside from marketing?

Willie: We got a little bit.

Paul: I don't wanna I don't wanna talk about it publicly on here.

Steve: So but more than probably the 100 k?

Willie: Well well well, both. Got it.

Steve: And then what CRM or tool or system do you guys, like, right now live and die by? Like, what what if I took what one tool if I took away from you guys, you guys would be, like, screaming at me for. Maybe, like, the situation where you got fired.

Willie: One tool? I mean, we're moving everything over to Salesforce. That's, like, it's been a fourteen month build so far.

Steve: Fourteen months.

Paul: And Yeah. We we're, like, we're building it so that, like, when acquisition starts, like, their process is in there. And then, like, when like, it's gonna be, like, on discount lots and you see the property, it's going through that whole process. And so, like, if we change the price, it changes on the website. Yeah.

And people will be able to log in and make their monthly monthly payments, and they'll see their payment history and pay their taxes. And it's it's been a nightmarish process. I don't ever wanna get involved with software. I can tell you that.

Steve: Yeah.

Paul: But it's it's not just like a Salesforce for a sales team. It's like Your

Steve: whole organization. Mhmm.

Paul: Yeah.

Willie: It's gonna be super dope when it's done because we have an ecommerce business at the end of the day and, like, all sides of the business, like, from acquisitions to sales to customer service to collections to billing to payments to finance, operations, everything is gonna be in there. It's all gonna be a super robust system, and we're not done yet. But, we're get we're getting a little closer.

Steve: I would say probably if it's doing everything and and they probably should rename it from Salesforce. Right? I mean, it just seems like it's just your whole company. It's operations. Discountforce.

Discountforce. What is your biggest struggle right now?

Paul: I'd probably say we're back to, like, the finance issue again because, like, now we're at an even bigger scale Mhmm. And we need even more money now. And we still we got we have one bank financing, but we're now kind of trying to figure out what that future looks like for us in terms of, like, are we now gonna become, a fund? Because at the end of the day, that's what we're what we need to do Mhmm. And learn how to raise money because that's ultimately, like, the only way we can scale our business until we're probably in the hundreds of millions when a bank can look at us and say or or, like, a like, a specialty finance company can look at us and say, like, you know, we're we're basically could become, like, an annuity for them where they can we can basically be, what do you call it?

When they're, like,

Willie: Perpetual fund?

Paul: No. Like, when basically, when when they can, like, take a big pool of, Syndicate? Pretty much, like, for once it gets to a certain size, then, like, bigger people will look at you. Yeah. I I I can't remember the terminology, but, that's kind of, like, trying to figure out how do we continue to grow.

Because like we mentioned before, we have an insanely profitable business, but it's not super cash flow for what we're building. We're both we have this we're We're basically at the end of the day, we're almost like a bank.

Steve: Yeah. I mean, you're you're you're consistently growing the valuable the value of the company Yeah. With it's almost like growing your net worth.

Paul: Yeah. Exactly.

Steve: You're growing the the value of the assets and improving the balance sheet, but you can't live off a balance sheet.

Willie: Right. Yeah. So in, Big Mike, Mike Zlotnick, he's been super helpful in, like, we have a different financial problem now. It's not that we don't have enough cash. He's provided us a line of credit and hit with his funds, and they've been super helpful.

At this point, we're just trying to basically lower our cost of capital and

Steve: Mhmm.

Willie: Kinda get, to a position where we're long term sustainable at sort of, lower rates. Better better rates. Yeah. Better.

Steve: What's the target rate you like you guys would like to be at?

Paul: Like, basically, like, in the

Willie: Well, I I don't know if so we but, basically, what we've decided is that we're gonna, be raising a fund to basically try to lower our cost of capital. We have this big balance sheet with performing assets with cash flow Mhmm. Coming in regular regularly. We've got almost 2,000 basically, 2,000 customers making

Paul: monthly payments. That's, like, the equivalent of, like, you have 2,000 doors, and they're making monthly payments. It's the same thing. It's just

Steve: So But is there, like you're talking about raising a fund then, or starting a fund, then it would be more or less, like, people were giving you money, but they're expecting

Paul: Yeah. Like, you give me a million dollars, and you'll get x return, and it's just a a just a a standard debt fund.

Steve: Right.

Willie: Yeah. So it'll be structured as preferred equity. It looks like debt. You get a preferred coupon. Mhmm.

It'll be hard money returns.

Steve: And Those will be hard money returns. Yeah.

Willie: It's gonna be really good returns for the investor with super low risk with all this collateral we're gonna have,

Steve: plenty of collateral.

Willie: Multiples. A lot of collateral. Multiples of collateral compared to the amount of money that we'll raise. So it's gonna be super conservative, investment with with a a ton of land backing in, a ton of receivables and cash flow backing it. So, it'll be a lot lower loan to value than your traditional real estate.

Call it at 78 80% on, like, an apartment building.

Steve: Mhmm.

Willie: It's gonna be way lower than that, and it's gonna be higher returns for the investor. So we feel that the, risk return is gonna be, pretty outstanding for whoever accredited investors are interested in in, potentially partnering with us.

Steve: Yeah. So I don't know if you've been paying attention to what, like, Paul and I have been doing, Paul Sparks and I.

Paul: I was like, what have we been doing?

Steve: Paul Sparks and I. But we're actively looking to tokenize real estate, so there might be some other Tokenize? Yeah. Like, it might be some other, there's because there's a bunch of, like, you know, Bitcoin millionaires that don't know what to do with their money.

Paul: Hit us up.

Steve: And they want to get into real estate. And so we're like the joke I made, right, is like, you know, like, athletes wanna be rappers and rappers wanna be athletes. You know? Yeah. Like, crypto wants to get in real estate because

Paul: they want to be funny. Like, I was talking to a guy last week, and, he's kinda helping us with some stuff. And he was like, oh, I know all these, like, Bitcoin guys that wanna get into real estate and that, like he's like, would you guys ever accept, like, crypto for your fund? And I was like, I have no idea. I never even heard of that for a fund.

And then, like, now you're bringing it up, like, five days later. So it's Well, we're

Steve: I mean, we're actively doing it. Like, the goal is to have it, like, done by October. So at the October. So something we're actively working on. How do you guys measure success?

Paul: It's a great question. I measure success by happiness Yeah. Not by money, like, my happy.

Steve: Do you do you measure it? Do you ask

Paul: Well, are you talking about in the business or in my life?

Steve: You. Your life.

Paul: Yeah. At the end of the day, like, money doesn't matter. Mhmm. I'm not, like, a flashy guy. I don't care about fancy things.

I just wanna, like, be able to travel and be happy.

Willie: Yeah. He says he's not flashy, but he has a Tesla, and his license plate is by lots.

Paul: I don't think it's flashy.

Steve: I'm with you. I don't think it's fancy. Because I

Paul: If I drove a Lambo, I think that would be flashy.

Willie: I I call it flashy. He he defends himself.

Steve: I drive a Tesla too. It's a it's a reasonable car. Yeah. Well, the the license plate It's a family view.

Willie: The license plate is what's funny.

Paul: I don't know.

Willie: I think I define success by how much fun we have every day. I think Mhmm. One thing that we our company is great at is, like, we have a great culture. I think that's what

Paul: We have fun. If you don't like having fun, I don't like to work Yeah. At this kind of

Willie: lots. Yeah. I think our culture stands out. We've got a great team, great people, and I think we consider them partners in our business and, like, love working with all of them. And I think that's something that

Paul: I went I went, in going with that, I went in July. I went to Europe for, like, three weeks, and I went we we have, like, a probably, like, five five people now in Macedonia. Most people never even heard of that country. Mhmm. Have you?

Yes. Okay. So it's

Steve: I was a nerd though in high school.

Paul: Yeah. Well, I didn't really know about it till we hired our first team members in Macedonia. And, they kept telling me how awesome it was. And I was like, alright. I'm gonna come out and visit you guys.

So, I went to Europe for a few weeks in July, and we went to Macedonia for five days. And the team took me took us around the whole country. It was, like, such an amazing experience. It was so much fun, and, like, we we jumped off of a cliff with them. We went, like, paragliding.

Like, it took the team paragliding. We jumped off this cliff cliff in Macedonia, and it was just, like, super fun. So I would say our team's a little, like, a little different. Like, I'll get on a plane. Like, next trip's gonna be The Philippines, but I'll get out there and just go visit you whatever country you're in just for fun.

Steve: That's awesome. He had me out until jumping off a cliff, but but everything else sounded awesome. And then, I guess, what what are you guys' superpower?

Willie: Superpower. That's a good question. I think finance is mine. Being the finance, like, brain and just that's my background, and I think that's, yeah, the financial engineering is what I brought, like, the key component that I brought to the business. And,

Steve: econ degree or from your investment banking background?

Willie: Both and then just how my brain's wired. Like, super logical, super, yeah, financial and, like, bringing that. And then also, I mean, we're both very entrepreneurial. So, like, the entrepreneurial spirit combined with, like, my my specialty, which is finance and, like, structuring and, thinking about our business from that lens, rather than, like, a real estate lens, even though it's very much real estate business. Paul loves the deal.

I love the finance. I love the skill on that side and the systems. So I think that's my superpower.

Steve: Yeah. And, we had Steve Valentine on the show, recently, and what we talked about was the one skill most real estate, investors or realtors miss out on is the money side, and that is the key to creating the wealth. Right? If you if you understand the money side, everything else is pretty easy. Right.

Right? But that's the that's the, one skill that most people miss out on.

Willie: And that's super power. One or two deals. And then in real estate, it's hard to scale unless you figure out that third piece, which is the money Right. Pour it on because the unit economics in real estate are great. But if you don't know how to raise the money to scale unit economics, then Yeah.

It's gonna be hard for you.

Steve: Yep. How about you?

Paul: I would say my superpower is putting the right basically, well, one is seeing the seeing the opportunities. Like, I can see into the future.

Steve: Mhmm.

Paul: So, like, I'm really good at seeing the bigger picture and then, like, putting the right people together. Like, I'll say, like like, you have this problem and then you put, like, Joe and Bob together. Like, I'm really good at putting those people together, to solve problems.

Steve: Yeah. So seeing the future and solving problems.

Paul: Yeah. I'm like, I should run for president probably.

Steve: I mean, I'm like I say. Is there a book you've gifted more than any more than any other?

Paul: A book? Mhmm. There's a like, I everyone's always heard the classics. Like, I even see you sitting see them sitting over there. Yeah.

But, you know, like, Rich Dad Poor Dad. Like, the classic one's great. Everyone's heard of those. I'm gonna throw one at you that I don't know if you've heard of, but I've actually recommended it recently. I've read it twice, and I think it's awesome.

And I think it really kind of encapsulates who I am as a person. Have you heard of a book called The Third Door?

Steve: I think someone mentioned it before, but I haven't really got

Paul: into it. So there's it came out maybe a year or two ago. It's called The Third Door by Alex Benayan, I think is how you say his name. And the entire principle of the book is, like, you're going to let's say you need to accomplish something. There's usually, like or you need to get into a club.

Right? Either can go in through the front door or the back door.

Willie: Mhmm.

Paul: And but and that's how most people think. Like, you wanna accomplish something, there's, like, two ways to do it, like, a and b. And the reality is is there's always a third door. So, like, go through the window, go on the top of the roof, and whatever. So this entire book is about like, he wanted to interview the most successful people in the world, and he, like, started out the book with a mission to get an interview with Bill Gates.

This guy doesn't have any, connections to anyone. And then, like, he tells a story of how he eventually got an interview with Bill Gates in person, interview with Steven Spielberg, and he asked them all the same question, which is, how did you get your start? And they all got their start by utilizing this theory of the third door of kind of bending the rules a little bit or going, you know, everyone was going left. They went right to get to where they needed to go. And so that book and just kind of how I run my life and and everything around me very much so, like, felt very connected to that book.

And and I think I'd recommend it to anyone because it kind of teaches you, like, the most successful people, they didn't take a straight path. They didn't, you know, do the obvious thing. They did the not obvious thing to get to where they needed to go.

Steve: Yeah. I love that. And, I know, like, when I was getting back into foreclosures, you know, listing properties for banks, like, I tried that front door over and over and over again. And it was always like, thank you for your application. Right?

And that was it. Yep. And so, it wasn't until, I started going out and hanging out where the bankers hung out and then buying them bottle service and getting them drunk. And then that's I don't know if it's the backdoor or what, but I find out where the bankers are. Bankers were, get them drunk, buy them bottle service, and magically so I get the listings.

Paul: What year was this?

Steve: This was, 2009 02/2009.

Paul: That's awesome. I didn't know that's that's that's how you did it.

Steve: Well, the front door was absolutely shut. So it was not not shut. It was, like, welded shut. Right? There's no one getting through the front door.

So, what about you? What book have you given to me?

Willie: So a few that come to mind, but, one that really stood out recently was The Hard Thing About Hard Things by Ben Horowitz. That's a good one. It's just a man it's a great management book. I like reading books by those that have done big things, like the top of the top, and just learning from them. And it's a lot about how to train, manage, and, operate a big business and, like, the the tough, like, the tough dealings of the day to day of growing a big business.

And so that really resonated with me. For real estate, and if for those who are trying to build sales organizations, the, Sales Acceleration Formula is a really good book. So that's another one that I'd recommend for those that are

Steve: And if

Paul: you're trying to build a sales team, you should check out Steve's sales training program. We send our people there.

Steve: Yeah. Appreciate it. Thank you. Thank you very much. And I really, like that you said that, you know, the hard thing about hard things as well, because my two leaders, they're in charge of running everything, are talking about reading it right now.

So, like, they're

Paul: both reading it. It's a good one. We I think we both read it twice.

Steve: Alright. So now I for sure have to read it because it's on my list, but yeah. Now Yeah.

Willie: I can't remember how big their sales team was, like, 400 or so people at in, at his first company. So, like, if if you can grow a business to that scale, you have a lot of, a lot of cloud. So I thought that was really good.

Steve: Yeah. Awesome. Appreciate it. I want you guys to think about something you wanna lead the listeners with before I make a couple quick announcements. Guys, if you have value today, please like, subscribe, share, comment.

You know, we do want to feed the algorithm so we can help and reach more people. And then we do have, Pardon Disruption on Thursdays and Serenity Talks on Fridays. And, I think that they're both great shows. I mean, obviously, I'm biased, but the the feedback we're getting from it has been overwhelming overwhelmingly positive. So be sure to check out, Party and Disruption and Certainty Talks.

So, we'll start with you, Willie. Last thoughts you wanna leave the listeners with.

Willie: Those that are looking to, I guess, get involved in real estate always or just being entrepreneurial in general, I think kind of just looking to do something a little bit different than anyone else and, doing that thing that's in the Blue Ocean rather than the Red Ocean. And and, if you're if you're doing something and you're feeling a lot of competition, it, it's it's gonna be there's gonna be a lot of resistance. And, so I always like to think different, and, it's gonna be a lonely path as you're as you're doing something different, but that's how you know you're sort of on the right path. So I know there's a lot of entrepreneurs that listen and Yeah. That's something that, like, as you're getting going, if you're if you're doing what everyone else is doing, and, it's probably not the right path.

Steve: Yeah. I like it. How about you?

Paul: I think, like, like, if you're an entrepreneur and, like, the the advice that I would give is is just, like, try things and don't, like the thing that bothers me the most that when people, like, talk about doing things is, like, don't make the plan. Like, make it loose plan. Mhmm. Just go for it and, like, build the plane while you're flying. That's that's how we got to where we are is we didn't have this crazy robust plan of, like, a, b, c, d, e, f, g, and we gotta execute on all these plans.

We just, like, we just went with it and just make good decisions. So the reality is is, like, you don't have to be, like, the super smart person to be successful. All you need to do is just execute on stuff and and just go and not have to be this super wound up, like like, planner.

Steve: Yeah. Well, I I heard something recently, from a mentor of mine, which was more complete the plan, the less likely the plan will happen. Right? Yeah. Because there's so much freaking uncertainty, all these things that come up in running our business, that there's no way you could have planned for these things about an industry you know nothing about.

If someone wants to get a hold of you, how would they do that?

Paul: You can email me. I don't we don't really have, like, a public Instagram, but, you can email email Willie.

Willie: I guess if the if those that are listening to this inspired or wanna just talk, or if you're an accredited investor and interested in investing in our fund, we just started a new accredited investor fund. It's called Sonny Capital Group, s o n n y.

Paul: With an o.

Willie: Paul's grandfather named after his grandfather and And

Paul: Florida. Sonny.

Willie: A play on words because we're both out in Florida. So you could email me at willie, willie@sunnycapitalgroup.com. Sunny with an o.

Steve: Awesome.

Paul: My email is paul@discountlots.com.

Steve: Awesome. Appreciate it. Thank you guys for coming. Thank you guys for watching. See you all next week.