Ryan Weimer: Yeah. I'll I'll never forget that moment because it was like, how could I be such an idiot? I get a call from this other GC and he's like, hey, what is going on here? And I'm like, what do you mean what's going on here? Like, you just got red tagged from the city.
The inspector came out here. All of your shit is not built to fire code. And I'm like, not built to fire code? He's like, yeah. You're using the wrong width drywall.
Your insulation isn't right. You got all these other things going on. And I'm like, now what? And he goes, well, I ran some quick numbers. I think it's gonna be another $800,000 to finish this.
I had already funded almost all of my construction loan. I'm like, $800. What am I gonna do?
Steve Trang: Hey, everybody. Thank you for joining us for today's episode of Disruptors. Today, we have Ryan Weimer with OfferNow Idaho, and he flew in from London. Talk about how he lost $1,200,000 on just one deal. Now, guys, I'm on a mission to create a 100 millionaires.
The information on this show alone is enough to help you become a millionaire. In the next five to seven years, if you'll take consistent action, you'll become one. And, guys, if you get value out of the show, please hit that subscribe button. That way we can reach more people. And if you're watching this on YouTube, we're also available on iTunes and Spotify.
If you're listening, we're also available on YouTube. You ready? Let's get into it. Alright. So, it's been three years since you've been in the show.
A few things
Ryan: have happened. Yes.
Steve: So I know we're gonna talk about this major loss. But before we even get into that, London, that's a far cry from San Diego, which is where you were last time you were here. Yes. And you do deals in Idaho. Yes.
What is happening in London?
Ryan: Yeah. So so yeah. Gosh. It's it's really been that long, three years. So we yeah.
So last time we talked, 2021, the market was on fire. Right? It was easy. It was easy. My whole team was order takers, myself included.
Mhmm. Just crushing it.
Steve: Right? Right.
Ryan: But we got into real estate to be able to travel, to be able to have financial freedom, and do whatever we want. Right? So, ironically, we moved over, you know, right as interest rates change. Like, literally June 2022, we moved over.
Steve: Oh, that was when you made the move. Yes.
Ryan: Perfect timing. Right?
Steve: Perfect.
Ryan: So my it it's always been a a dream of my wife to live in London. She's her favorite city in the world. Mhmm. She got a internal transfer with her job. She's in cybersecurity, so we're on a five year visa over there.
So we were like, screw it. We just had our first baby as well. Mhmm. We're like, let's go do it.
Steve: That's how good we are at juggling.
Ryan: Let's go experience life. Yeah. But that's how we like to live our life. You know? We we just love experiencing new things.
We love traveling new places. We've been to Africa, like, five or six times all over Europe. It's it's just been phenomenal. So I really went in with rose colored glasses about what it was gonna be like, and it ended up being the complete opposite. Yeah.
What were you expecting? So I was expecting, you know, three days, I'll work into the evenings, and the rest of the time, I'll be on Europe time, and I'll have some time off. And Mhmm. We'll be traveling and sipping Mai Tais and whatever, and it was all hands on deck, man.
Steve: So three days part time. Pretty ambitious goals.
Ryan: Pretty ambitious. Complete naivety.
Steve: What were you doing when you were living in San Diego?
Ryan: It was it was probably 7AM to 6PM.
Steve: I mean,
Ryan: we were still growing. We were trying to do as many deals as we could. Mhmm. Boise was the poster child during COVID. Like, I don't think people realize in just two and a half years, it appreciated 53%.
53% in two and a half years. Right? So anything you touched, it was like, just get it under contract, and we can move it kinda thing. Right. Not that we were underwriting that way, but, of course, like, you get really aggressive
Steve: Mhmm.
Ryan: When you're doing that stuff.
Steve: You can afford to overpay
Ryan: in that market. A 100%. And and you start making decisions, not betting on appreciation, but when you have 10 other people competing for the same lead
Steve: Mhmm.
Ryan: You automatically get bid up or you have to really innovate to be able to capture any kind of meaningful market share. Right. So you get caught in that trap of, like, well, I can either not do business or I can go to what my buyers are buying it at and what my competition is is buying it at. So
Steve: Okay. So instead, it was all hands on deck. So what does that mean?
Ryan: I mean, my working hours, the entire time I've been over there, have been about 2PM to 3AM. I mean, so I'm up till I don't go to bed till three, 03:30AM every single day, seven days a week. Still? Still. And I don't I don't share that with people.
I in fact, this is the first time I'm ever talking about it. I get asked all the time, how is it? How does it work? And I I'm an optimistic guy. Like, I have never ending optimism.
Right? Like, forever. I Right. Like because I enjoy it. You know?
So to hear most people, they're like, you work till three in the morning every day. I'm like, I don't hate it.
Speaker 2: Mhmm.
Ryan: I mean, it it screws up my body clock for sure, but, it's not ideal. But I I do what I have to do. Mhmm. You know? It's so for me, it's it's just about doing what needs to be done.
And, of course, we didn't plan for this, but, like, yeah, we just I just had to make a major adjustment.
Steve: The reality that you're in? Yeah. What time are you waking up?
Ryan: Like, eleven.
Steve: So I still get eight hours. Yeah. Yeah. And then the wife is good with all that.
Ryan: Fine. Good. She's accepted it. She's I I yeah. I never would have been able to do any of this without her.
She's been such a badass in supporting me, supporting us both, you know, emotionally, financially. Just when we moved over there, you know, expectations with your sales team, with your COO, with your spouse, with your kids, they can get you in trouble. Right? Right. So having expectations that I'm gonna be working part time and I'm gonna have normal hours with the family because we have, you know, a young daughter.
And then for that to completely go on its head has been in incredibly difficult. Yeah.
Steve: So we're used to it's just a given. In The Philippines, they just work from midnight to 8AM, and that's just the way it is. Normal. Yeah. If you want to work for Americans, these are the hours.
Speaker: Yeah. Are the hours
Steve: you're kinda talking about in London is is there, like, any kind of, like, social norms? Like, oh, it's okay. He just wakes up at 11:00 in the morning.
Ryan: There are a lot of expats. So we we we know quite a few Americans that have moved over, and they work for a US based company. So it is actually more common. Yeah. But, you know, they'll end at, like, eleven, ten or eleven at night, not go till Right.
Super late. So it's not completely out of the norm, but absolutely, like, having any kind of social life. I mean, we bought season tickets to Fulham, so, like, into soccer now, apparently. So experiencing all that stuff, it just I think it's football. Right.
Exactly. American based audience. Right? Okay.
Steve: Are you hooligan yet?
Ryan: I will say the best part about living in England is learning all the new slang words
Steve: Yeah.
Ryan: That you've never heard of before. Yeah.
Steve: Yeah. So is it more complex? Because I remember, like I can't remember if it was Lockstalk and Two Smoking Barrels or if it was Snatch. But one of those movies, they I think it was Lock, Stock, and Two Smoking Barrels where they had, like, an entire encyclopedia to go with the movie. Right?
So is it like that or, like, you're just speaking in a whole different language and no one knows what the hell you're talking about?
Ryan: It No. It's it's the same language, but it is definitely different. Mhmm. The the voice inflections, you know, if if somebody calls you a a bloody plunka, yeah, don't know if that's good or bad or endearing or not. Right?
So you just yeah. Like, the whole first year over there, you're learning some new words. But what I what I have learned living over there is British people are a lot more similar to Americans than actually the rest of Europe, surprisingly. Yeah.
Steve: Alright. Can you give us some examples there?
Ryan: Oh, you're putting me on the spot here. I think they're a little bit more risk takers
Speaker 3: Mhmm.
Ryan: Than the rest of Europe. They, yeah, they they enjoy that's a good question. I can't really put my finger on it.
Steve: Do you catch any flack for being an American citizen?
Ryan: Yeah. A little bit. Yeah. A little bit.
Steve: Not too much?
Ryan: Not too much. No.
Steve: So when I was in college, I spent three weeks or two and a half weeks, right, in London, Dublin, and then, Edens I think it's Innsburg? Edinburgh?
Ryan: Don't say Edenburg.
Steve: Whatever it
Ryan: is. Edinburgh.
Steve: Edinburgh. Whatever it is. It was beautiful. Right? But I remember London, they were not particularly fond of us Americans, and this is around 2002.
Right? 2001. So whatever it is. It was after 09/11. I know I know that.
And they were, like, rude to us. And I was like, how can you tell we're Americans? Right? And they're like, well, because you wear jeans and sneakers. Like, oh.
Yeah. Right? But then after that, I remember, like, I was so put off by how rude they were to myself and my friends because we were Americans that when it got kinda crowded, I was walking around. I was like, excuse me. Pardon me.
American citizens coming through.
Ryan: Well, that's why they were mean.
Steve: No. I did that after they were, like, pushing our buttons.
Ryan: Listen. British people, that they're like that to each other, though. It's it's a they want to be cynical. Mhmm. Like, that's just it's rainy all the time.
It's dark. Yeah. You know, it gets in the winter. They they still have daylight savings time,
Steve: which
Ryan: I know we're in Arizona, so they're they don't have that. Right. And, by the way, everybody's always like, it's at this time, Arizona time, when we're scheduling meetings. I'm like, what does that even mean? Well, how do you expect me to know what Arizona time means?
Is it mountain? Is it Pacific? Google.
Steve: Google. Okay.
Ryan: But but it's it's like a rite of passage thing where they they just love to be miserable and talk about their misery together. And I I really think That's why pubs are so prevalent. Exactly. And they I mean, they drink like none other.
Steve: Yeah. Yeah. I was spent love the pubs. Love the fish and chips while we were out there. Yeah.
Okay. So, you moved out there. Things are a lot harder. And then we're gonna talk about some of the big big devastating two bigs. Big big.
But but before we get to there, let's talk about five of the biggest failures you've experienced in business. Yeah. So you've been in
Ryan: this business for how long now? Five years. Five years. Yeah. Alright.
Steve: So one for each year.
Ryan: And there you go.
Steve: Correct. Just average. Yeah. So, hopefully, you're not due for another one. Okay.
So first one,
Ryan: number one, biggest failure in business so far. Yeah. We we lost 1,200,000 on a on a single deal. Alright. And I say we, I did.
Steve: Alright. So we're gonna save that for number five then.
Ryan: Okay. Alright. Perfect.
Steve: Save that for number five.
Ryan: The best for last.
Steve: Best for last. Alright. What's number two? What was the second one?
Ryan: Number two is I treated my business like a personal property conveyor belt Mhmm. And not like an actual business, and I completely screwed my growth.
Steve: Yeah. What does that mean?
Ryan: So a lot of it has to do with the macro, the market fundamentals. Right? So the whole reason why I have to stay up until 3AM in England is because when interest rates change, Boise dropped 26% from peak in a matter of six months. Yeah. So, like, when you're meeting with sellers and they're basing their property value on Zillow, what their neighbor's home sold for three months ago, and you're meeting with them and the gap between what they expect and what you can offer is so freaking massive.
You have problems.
Steve: Right.
Ryan: You can't do any exit strategy except creative, really, which And even then. Which is a long game that you're not getting liquidity or cash a lot on those deals. I mean, we wholesale some of those, but, like, you're you're not getting huge rips or assignment fees. Yeah. So immediately, you get into this liquidity problem.
Steve: Mhmm.
Ryan: So I stocked up on rentals
Steve: Mhmm.
Ryan: 2019, 2020, 2021. It was stupid not to. Right? If I I'm so anti paying taxes, which is kind of ironic because I I live in England, but I don't have to pay taxes in England, thankfully, because we have a good tax person and Right. Figures all that out.
But, you know, I if we were to to sell or flip any of those properties or wholesale them back in 2021, I was losing 30%, 35%. Right?
Steve: Mhmm.
Ryan: And actually being a resident of San Diego at the time, I was losing closer to 40 after California state tax.
Steve: Yeah. So I
Ryan: was like, I need to hold whatever I can hold.
Steve: Mhmm.
Ryan: Problem was I was equity rich and cash poor, and I didn't understand that a good salesperson can make you a million dollars a year in your business. So all that money was tied up in properties. I could not access it. I couldn't spend it more in marketing. I couldn't hire more salespeople.
Speaker: Mhmm.
Ryan: It was a really, really hard transition.
Steve: So what I'm hearing is with your business, because you're buying so much property so many properties, you didn't really have any cash reserves when the market shifted. Correct. And And because you didn't have any cash reserves when the market shifted because they're all tied into your properties, you really couldn't do much to really pivot in that situation.
Ryan: I I had cash, but I completely underestimated the I mean, 26% drop in six months. I, you know, I wasn't around in o eight and o '9. Right. But I I didn't the level of supply and inventory was so low, I could not fathom that just due to affordability, you could have that kind of market share. Yeah.
I just completely underestimated the risk analysis of that. Well, you're not alone. Yeah. I mean,
Steve: I went through '8 o '8 and o '9, and I didn't think that could happen. Yeah. Right? Like, the way it shifted that fast, just, a 50% or 50 bps change could cause that kinda wreak that kinda havoc in such a short period of time because you're in Boise. And I think probably you guys had the absolute worst of it, but Phoenix wasn't exactly roses.
Ryan: I mean, anything Denver West, essentially, unless, you know, San Diego and Southern California was okay ish. But, yes, Seattle got covered.
Steve: Yeah. But even San Diego got that hurt pretty bad. So, like, the the things that you know, for those of you guys that are newer, that didn't weren't around in '22, like, the it wasn't so much that the the property value changed in Phoenix. It was how the deals got underwritten changed because, like, you could lock it up for '82, which blew my mind in Phoenix, 82%. Yeah.
And you didn't have to account for repairs. No. And you could sell it. And then it went immediately to the way it should have always been, which is, like, 75% minus repairs
Ryan: Yeah.
Steve: Is what they'll buy it at. Right? But even then, that the uncertainty changed so quickly. People were like, I don't even know about 75%. I might need to be at 70 Mhmm.
Minus repairs. Yep. Yeah.
Ryan: So cash deals went completely out the window. The only way we survived was creative finance deals. Yeah. Like, 60% of our deal flow was creative finance and other 40% were novations. We were, like, wholesaling almost nothing.
Steve: So explain to me what you're doing as far as creative deals.
Ryan: Lots of $0 down sub two deals. Mhmm. Sometimes they have second position, 0% interest, notes to pay the the seller equity. So lots of those.
Steve: Okay. Yep. Do you hold on to those or do you wholesale those?
Ryan: Yeah. Yeah. We hold on to them. But, again, you know and we're gonna get to losing 1.2 on
Speaker: Mhmm.
Ryan: On that big deal.
Steve: Right.
Ryan: But when your business is cash poor, but you have all these personal properties, you're equity rich, then you also have a colossal blow like that. You're not prepared Mhmm. To to reap the benefits of keeping all those two and a half percent, 2%, one and a half percent, even 0%, deals. Like, we we had to wholesale them just out of necessity. So I kept as many as I could.
Steve: We eventually had to wholesale some. Yeah. Because that was my question. Like, how are you paying the bills if you're locking us up too, which is great Yeah. But you still need active income.
Ryan: Yeah. Exactly. Yeah. Because our flips, we got we got crushed. We lost, like, one fifty on one.
We lost 80 on another. We lost 60 on another. Now granted, in 2021 and leading up to that, we were making, like, 80 or a 100 almost every one. Yeah. So it
Steve: was It was an ATM. You were dealing with ATMs
Ryan: back in So it's all relative. Right? Like, overall, we were still way up, but it was just, yeah, the misallocation of capital and then
Steve: Well, we're you know, I don't think this is a natural term, but it's kinda like the MC Hammer effect. Like, you were spending it like it was gonna keep going.
Ryan: Totally.
Steve: And, yeah, like, you know that it could slow down. But, again, we underestimate how much it could slow down. Yep. So that's the biggest mistake. So then what changes did you make after learning them from that?
Because we're talking about the mistake. What's the lesson from that?
Ryan: Yeah. I I had to I had to start selling quite a few rental properties just to get liquidity, and I I started really understanding. We we started to get better at hiring. That's what happened. Because this whole time, yeah, it sucked going through it, but our entire competition completely dried up.
Like, Boise was was the place to be, and everybody was moving there and whatever. And then all of a sudden, we were the only person doing deals. Like, I did I would I was on all the all the lists of all the because we we would buy from other wholesalers and everything. I I wasn't getting anything. Like, we were the only ones doing deals Mhmm.
In that dark period. So I saw the opportunity, and I was like, I know this sucks right now, but we gotta do whatever we can to gain market share because there's a massive opportunity here.
Steve: Mhmm.
Ryan: So we're also, like, trying to scale at the same time that all this was going on. Did you,
Steve: you know, when you were having to sell your properties, did you did you have to fire sell them, or were you able to, like, sell them on MLS?
Ryan: No. I was able to sell them on the MLS. Yeah.
Steve: So you're able to get a decent amount of liquidity Yes. Back.
Ryan: Yeah. It never turned into, like, a nine one one situation.
Steve: Okay. But
Ryan: I but I felt like I was behind constantly. Right? Because days on market was going up. So, yeah, you think it's gonna sell within sixty to ninety days? Well, that's more like a hundred and twenty.
Steve: Did you sell them all the stuff too, or do you had to pay off the mortgage? Meaning Like, when you sold it to the next buyer, did they get a traditional mortgage? Paid off the mortgage?
Ryan: Yeah. We we didn't wrap very many of them. We we just paid them off. Yeah.
Steve: So it's probably good. But, yeah, definitely sucks how many of those, like, you know, of, one, two, two and a half percent.
Ryan: Yeah. No. I mean, fast forward to now, so all the ones that I sold, I actually have a little a few more doors now than I did in 2022, ironically, But I sold all the ones that were, like, over a 4%, and now most of my portfolio is 3% or under.
Steve: Oh, so the blend's better.
Ryan: Absolutely. Well, that's good. But the the exchange of capital is crazy, man. It was it was a wild ride. But Yeah.
Yeah. We we sucked at hiring.
Speaker: Mhmm.
Ryan: We got we got better at that. We Well,
Steve: I wrote that down. We're gonna talk about that. Yeah. So what was the next big mistake, big failure?
Ryan: We lost 80,000 we lost an $80,000 deal from a TC error.
Steve: You're gonna have to elaborate.
Ryan: Okay. What what exactly happened? So so we had, you know, any at any given time, we have a bunch of properties under contract, but we got we were renegotiating one that we locked up too high. I can't remember the exact story of what happened.
Steve: Mhmm.
Ryan: We had a new transaction coordinator that was probably three months into the gig, and we had another property under contract that was gonna be a big rip. I mean, we were gonna make 80 on this thing. We already had a buyer lined up and everything. We had it under contract. It was ready to go.
Right? I don't think earnest money was in yet. We were just in the process of, like, fielding offers. Unfortunately, which totally our fault, this is not our transaction coordinator's fault at all. It's totally our fault, our oversight.
We didn't give the proper training. We didn't give the proper, you know, four eyes check. Mhmm. Right? You're an engineer.
You know that that lingo. So she sends out an addendum that says the new price to be this mistakenly puts in the wrong property address. It was supposed to be a a price reduction for a different property. She sends it to our sellers of the one we were supposed to make the big rip on, which is a net $80,000 increase Mhmm. To their purchase price.
They sign it.
Steve: Mhmm.
Ryan: All of a sudden, that's legally binding. We just increased our purchase price $80,000
Steve: For no reason.
Ryan: For no reason. We call them up. Hey. We're so sorry. There's been a a mistake.
This was supposed to go out to another property. Nope. We signed it. Mhmm. So they were just being assholes.
Mhmm. So that was fun.
Steve: Did you actually close on that one? No.
Ryan: So you just walked away from it? We we had to. Yeah.
Steve: Well, yeah. Of course. Yeah. I get it.
Ryan: But you
Steve: had to walk away from it. But, like, they were completely unreasonable, and
Ryan: they were Really unreasonable. We'd been working that guy for three years. Mhmm. Three that's what made it even worse. We'd been working him for three years.
We've met with him five times.
Speaker: Mhmm.
Ryan: Joel Miller. I remember his name. He was on one of the first tax delinquent lists that we ever it was an inherited property. It's just too much emotion. Mhmm.
It took him so long just to muster up the courage to sign with us, meeting with the same guy five times. He get finds any excuse to then not have
Steve: to go through with it,
Ryan: and he did that. So Do
Steve: you know if he still has that house? I don't.
Speaker: I don't know. Yeah.
Ryan: I was wondering, like I think it was up for tax deed auction soon, so I think I think he ended up selling to somebody for hire. Yeah. Yeah. But, man, that was brutal. Right.
And that was, like, right when we needed it too. I think that was early in 2023. Like, winter winter is coming, and it was just brutal. Yeah.
Steve: Yeah. So what have you done with that failure?
Ryan: Yeah. So, most people would hear that and be like, oh, you you fired the TC. Right? We actually didn't fire the TC because of that. It was totally our mistake and our a broken process.
We we didn't have anybody check. We were so busy that we just didn't check.
Steve: Mhmm.
Ryan: And she had my DocuSign credentials, which I see this all the time. This is a big mistake. Mhmm. Like, she was just signing stuff on on behalf of me because I was busy, and I was okay with it.
Steve: Mhmm.
Ryan: Right? She's a TC. Let her do her job. It's way more friction for me to stop and sign all these damn documents. Right?
Big mistake. Now when we approached her about it, that was that was the problem is she didn't take any ownership or accountability of, like, oh my gosh. I made a big mistake. How can we fix this? It was this is all your fault.
I can't believe you put me in this position to and I was like, what? We just lost the 80 k deal. Like, you're still getting paid. What do you mean? Yeah.
So that was not a cultural fit, obviously, and then she was let go shortly after that. So Right.
Steve: It's for the lack of ownership.
Ryan: Exactly. Not for making the mistake. Yeah. We encourage our team to fail. Like, people that that's the biggest thing is, like, when you're an entrepreneur and you're scaling and you're growing a team, you have to encourage and empower other people to fail.
Otherwise, you're just gonna be the control freak that's doing you're gonna be the guy in that seat your whole life.
Steve: Right.
Ryan: You're never gonna relinquish control. So you have to you really have to encourage your team to make mistakes even if they're borderline catastrophic. Right? Because that that's a part of it. You have to anticipate them.
Steve: So do you still have your TC doggy signed for you? No. No. No. You look at every single
Ryan: one now? I do. Or my COO, Corey. Yeah.
Steve: Yeah. I have Summer. She's here. Right? You saw her earlier.
Absolutely will not sign anything for me. I was like, please just sign it for me. She's like, no. Smart. I will not touch it.
Like, no. I want her to do it. I want her to sign it.
Ryan: Right? But And listen. The the 990 nine other DocuSigns, it's gonna be completely fine. It's that it's that thousandth one.
Steve: Mhmm.
Ryan: That's that's the thing.
Steve: So Yeah. I know. But then you look at it probably in a grand scale of things. Right? It's easy to say, like, you know, $80,000.
Like, we save it. Right? But then you also scale it out. And I'm just playing devil's advocate here.
Ryan: Totally. The time that it takes you. Yeah?
Steve: Right. Like, over the course of five years, if that's the only mistake you make, eighty thousand or five years, like, is it worth, you know, trade offs? Who knows?
Ryan: Yeah. One I think once you get to a a scale, though, and a mistake could also get you liability or legal trouble, that that's when you really need to consider, like, what what do I have to lose here? Like, what is real worst case scenario? Because if it is losing an 80 deal, okay, you'll you'll get an 80 deal next month. But if it if it opens you up for liability into deeper things, damn it.
Steve: Entrepreneurs. There's no
Ryan: there's no risk in this business. Never. Never.
Steve: We we still gotta get to the other big one. So, anyway Yeah. This is
Ryan: just the warm up.
Steve: Yeah. So I but I think they're right. Like, couldn't you just put processes in place where, like, double check or triple check versus you looking at it. I don't know. Right?
Because, like, I think about situations, and we don't have anything that would really incredibly urgent anymore. As a matter of fact, today, something I took from the whale club is, like, if I need to make a decision right now, the answer is no.
Ryan: Of course. Yeah.
Steve: Right? Like, it used to be it's like, oh, man. I gotta jump on this. Like, it's a big opportunity. If I don't jump on it now, I'm gonna miss out on it.
Okay. Great. Someone else can have I'll find another one of those later on.
Ryan: Spoken like somebody wise that's made a bunch of mistakes from rushing into things. Right? Because that I mean, that's when we're most prone to mistakes.
Steve: Well, yeah. I mean, that's when we, I've definitely I mean, it wasn't 80. It was 20. You know? Like, we we bought a deal.
Like, oh, there are train tracks in the neighborhood?
Ryan: Yeah. I've done it. Yeah. Right? Like, you backs up to a busy road.
Yeah. But you look at it real quick.
Steve: It's like, oh, I mean, I'm looking at Solcoms on the street. Okay. It's fine. Right? But I didn't do, like, a full analysis.
It was just like, yeah. That looks pretty good. And then you look at it later on, it's like, why didn't we buy that one?
Ryan: Yeah. But you
Steve: don't back out because you gotta honor your word. Yeah. Because you don't have a reputation of being the guy that backs out. So so but, yes, there's been more like if if you need a decision right now, the answer is
Ryan: no. Yeah. A quick tip actually
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Ryan: Tip actually for the audience. We get an inspection report on every single deal now that we get under contract Mhmm. For two reasons. Number one, it allows anything we wholesale our buyers feel comfortable offering. It's one of those sweet ones with three d walk through Mhmm.
As well, so they can click through the link and see through all the rooms and be there. Mhmm. So anybody out of state can feel comfortable offering. But if we do need to renegotiate, we send them that inspection report. We wait twenty four hours to let it marinate.
Mhmm. Our renegotiation rate is, like, seventy five, 80%. Like, it is insane how successful we are at renegotiations when we have to. We don't dick around with people. We only do that when we need to.
Right. There's a very fine line between being ethical and unethical with that. But that is a total thing that's you're gonna find cracks in foundations you never thought existed. It's gonna that $400 is gonna be an infinite ROI.
Steve: Yeah. Yeah. I totally believe that. Alright. So, 80 k.
Next mistake. Next failure.
Ryan: Number four is is not spending enough time on hiring.
Steve: Mhmm.
Ryan: So like I said before, a good salesperson in your business can make you a million dollars in revenue a year, just one person. So I remember in 2022 and early twenty twenty three being, I can't pay $5,000 for a predictive index license.
Steve: Mhmm.
Ryan: Like, I I'd be, like, messaging other members in CG. Like, hey. Can we get a test for this one guy?
Steve: And do
Ryan: you have the COG score and all this stuff? And it was just so dumb, Steve. It's so dumb because you don't think about how much money you waste with all the bad hires. Yeah. I mean, salespeople are tough to hire.
Steve: Oh, yeah.
Ryan: Right? You know better than anybody. Yeah.
Steve: Oh, yeah.
Ryan: And it is it's just this fallacy of you're tripping over over nickels to pick up pennies if you're being cheap on your hiring. Now the challenge is, as an entrepreneur, how do I find time to spend in the hiring? Because the the second you you change your mindset and you treat hiring like you do your lead generation for sellers and for properties, your business will totally change.
Steve: Yeah. So what was your hiring process before?
Ryan: Yeah. It was so and so. So we would we would post, you know, on the job boards.
Steve: Mhmm.
Ryan: I think we'd use WiseHire or something, or I don't think even WiseHire was around then. But we would post on LinkedIn and Indeed and all those. I would do an initial interview, and then I'd have, like, Corey, my COO, do another interview. We may or may not ask for references. Mhmm.
We didn't do any personality tests. We didn't use PI. We didn't do a COG score. We pretty much or or it was a referral.
Steve: Mhmm.
Ryan: And it was like a, yeah. I like this guy. I think he'd be good. Let's give him a shot. Mhmm.
Screw it. Right? Or no, there's something he said was, I mean, Steve, we hired some of the worst people. Like and even even now fast forward with our our process so dialed in. Like, we had some guy not show up on the second day.
Like, this just happens. You know? Like, when you're hiring people at scale, but, man, that yeah. Our hiring process was essentially nonexistent, very much gut feel type of thing, not measured. And today?
Today, it's it's very rigid. Actually, and thanks to, you and Ren's sales leadership training, we we didn't exactly carbon copy that, but we made a full process. We do a phone screen. They fill out the predictive index. They do the COG score test.
Then they do a sales group interview, which we really like. We throw them three or four of them interview together on a Zoom or Google Meet at the same time, it's really awkward. Like, the more awkward, the better. Right? Because we wanna see how they squirm and how they deal with it.
Steve: Mhmm.
Ryan: Then they go to a behavioral interview, then we'll do a reference check, and then they'll do a job shadow, then they'll do a final CEO interview with me. So we got, like, five or six interviews, predictive index. I mean, we go through, I hired an operations manager this year, Tori. She is such a game changer. Yeah.
She's really taken the bull by the horns there and developed all that out, but she's gone through over a thousand resumes in three months already. Really? A thousand resumes. Yeah. Yes.
That's impressive. Yes.
Steve: Where is she getting most of the applicants from?
Ryan: You know, most are LinkedIn. Mhmm. But it's like inbound and outbound leads Yeah. On the lead gen side. You gotta go through so many resumes and so many interviews Mhmm.
With a cold applicant than you do a warm referral. Right. So warm referrals are tough. We're we're having some success with, the solar industry right now. Our sales a little bit, man, it is tough out there.
Like like, really, our success rate with cold applicants, if they do make it through that entire process and we do bring them on, one out of every four is making it. Yeah. One out of every five. Past ninety days. Mhmm.
I mean, it's it's pretty tough. So there's this there's this blend, and this is the the the struggle is there's this blend of selling them on the vision and the opportunity and all the growth that comes with it.
Steve: Mhmm.
Ryan: And then also being very realistic and borderline pessimistic about how hard it's gonna kick their ass. Right? Yeah. So you have to be very optimistic, very you know, the best salesperson on the front end, sell them so you can get them into the funnel. And once you have them into the funnel, the more that they're bought oh, this is a legit company.
Oh, they have legit goals. They have systems. They have processes. They have more leads and salespeople to close deals.
Steve: Mhmm.
Ryan: Wow. There could be something for me here. That's the time when you not stick the knife in, but you say, hey, man. This is gonna be the hardest job you've ever done. And then they'll be like, okay.
Yeah. I know it's pretty no. No. No. I'm telling you.
Like, this is how other people have failed. They've come in, and I we tell them with your draw and your compensation, it could be six to ten months for you to start seeing bigger paychecks because what you've drawn against, it just takes that much time with the sales cycle to get really good and close a bunch of deals. From the time you know this. From the time a contract comes in or from the time a lead comes in, it could be thirty, sixty, ninety days Right. To get it under contract, then it could be thirty, sixty, ninety days for it to close.
Right. So if it those b to b type salespeople, like software sales is really, really tough transition, even car sales
Steve: Mhmm.
Ryan: They make the sale. They see the commission on the very next paycheck. That is we've had a very, very low success rate with those type of things. And even in that last interview and leading up, when we're just hammering how hard it's gonna be in trying to set those right expectations, it can be a big a big step for people.
Steve: Yeah. I mean, I'm just kinda thinking, like, is that different than a professional sports organization? Correct. Right? Like, you look at, like, the Denver Nuggets, Jokic.
Great team. Right. Better than
Ryan: the Suns.
Steve: They're an okay team. Anyway, you look at this guy, Jokic, and there's no way this guy should be, like, a world class athlete. The guy can't even run-in a straight line without, like, kinda doing this penguin thing.
Ryan: He rides horses all summer in Slovakia or Slovenia or one of those two. Right? Yeah.
Steve: But he is, like, one of the top condition persons on the planet. Why? They have to put in the work. They have to make the sacrifices. Right?
So, like, I'm I'm picking on him, but look at Luka. Look at Doncic. Nothing about this guy is like, oh, this guy's a premier athlete. Like, you don't he doesn't pass the eyeball test.
Ryan: Not at all. Right? In fact, he looks out of shape. Both of them. Both of them.
Steve: Yeah. But their conditioning is off the charts. It is. How? Right?
And and they can shoot like crazy, pass like crazy. It's like, well, they put in the work. Yeah. So, like, I
Ryan: But you can also tell by their temperament Mhmm. They never get too high or too low. Mhmm. So that's something if you're dealing with somebody that's, you know, two sigma or higher independent or, you know, they're way more subjective than objective, they can be a little bit emotional. Right?
So you have to really rein that in and and understand that. Right? So, like, Jokic and and Luka, Luka's a little bit more animated. But, like, Jokic, you can he barely even smiles when they won the championship.
Steve: No. He was with four men.
Ryan: Horses. Exactly. But that's somebody that's obsessed with the process of getting better Right. Not the outcome. And that's so hard to find.
Steve: Exactly. And so if everyone is wondering what we're talking, we're talking about the predictive index. Yep. Objective versus objective. Right?
There's a test for that and then or this part of the test and then two sigma a. Right? We're talking, like, one in a you're one in 50. Right? Like, you're if you're past one of a 100 level of, like, independent, probably not a good core value fit, which includes Ryan and me.
Yeah. You would not want to hire us to work at your company. I wouldn't say we'd necessarily be toxic, but we're gonna cause problems.
Ryan: Yeah. So so that actually leads into kind of how I got here.
Steve: Mhmm.
Ryan: Right? I'm I'm off the charts independent. I'm three sigma independent venturer.
Steve: Yeah. The last time I took it, I I showed the sandwich. I was surprised by it. But, anyway, continue. You're
Ryan: a venturer now. Apparently. Wow. Okay. Because you were an individualist.
That's interesting. So you've gotten more independent as time has gone.
Steve: I've gotten less patient is what the test has shown.
Ryan: Absolutely. Totally resonate with that. Okay? Yeah. So, the first time I ever took PI and I saw that, this is why it's so important to like, the $5,000 to spend just to or I think you can get a 10%.
You can negotiate it because it's software. Right? Whatever it costs now. The amount of money that it saves you is is in a 6 figures or even 7 figures.
Steve: Oh, 100%. I can't hire without that.
Ryan: And not not only that, it tells you exactly how you need to manage people. Mhmm. We pull it up while we're interviewing people, and we know the hot button questions to ask. Mhmm. Right?
If they're very independent, they're gonna be fighting structure the whole time. So you gotta ask them, how do they handle that? How do they wanna be managed? Right? These are tools that you have to have in your arsenal to really level up that I just didn't understand before.
Steve: Yeah. And our poor employers in the past, right, managing us. Like, we had again, not a core value fit when I was at Intel. Right? Like, we had these six core values and, like, like, these core values suck.
Right?
Ryan: Oh, I I was like, core values? This is bullshit. Like, who cares? Who cares?
Steve: Yeah. Get the job done. What do you care how why do you care how I get it done as long as the job gets done? Like, that's not that's not the Intel core values.
Ryan: No, Steve. You have to sit at your desk until 5PM even though you finished it three hours ago Yeah. Just so everybody else can see you there.
Steve: Yeah. So, alright.
Ryan: One more thing on that, though. Yes. I actually had my wife take the PI recently.
Steve: Mhmm.
Ryan: Little little did I know, and Julia, if you're watching this, she'll watch this. But she was an exact match.
Steve: Mhmm.
Ryan: She's also a three sigma independent venture. Go figure.
Steve: So how are the fights in the house?
Ryan: So childcare for us is a challenge. Just being honest. Right? Yeah. Because she gets her energy.
She, you know, works with a start up. Mhmm. So she needs her time. I need my time. But I'm telling you, knowing that, once I knew that, it made so much more sense, and I could way better serve her as a husband Mhmm.
Knowing that about my wife. Yeah. So I it's something I should have done years ago, honestly. It would have saved her
Steve: a lot. Myself included. So, like, I thought my wife was a certain thing on the disc, right, based off her interactions. Like, okay. She clearly wants more stability.
Right? And she cares about family, so she's high s for sure. Right? And then we took the the PI. It's like, no.
She's not a high s. She's a very low s. Right? It's the high independent is why, you know, when I say, hey. We're doing this.
Like, it doesn't work. Right? It's the high independent. But now that I know, like, she's very independent, you know, like, she wants to do she wants to do things her way, which happens to be the right way because she's a strategist, but she wanted it yesterday. Right?
So now I can work with these within these confines. Right? So we're kinda guessing what was important. Totally. And, like, you can ask somebody what's important to them, but they still don't not everyone knows what's important to them.
Right? But now I can look at this like, okay. As a matter of fact, I remember, Gary Harper was in town, and he invited, and he was in town with Susan and, Nathan Brooks. Right? And then myself and my wife were gonna come join them for dinner.
And he sends me a message like, hey. Are you cool if we just change dinner from six to five? Right? And I was like, my wife is a strategist.
Ryan: World War two.
Steve: Like, my wife is a strategist. Alright. We'll keep it at six. Because we know, as strategist, you move that dinner plant an hour earlier, two hours before dinner, forget about it. Whole night shot.
Right?
Ryan: The mood is gone. It's no longer fun. Right. Yeah.
Steve: But you and me, it's like, hey. We can move that hours. Okay. Like, let me just make sure that calendar still works. Okay.
Like, there's very little resistance, but, you know, her being a strategist. Right? You know this. And then we also know we're both high a's. We gotta figure out, okay, which one do I want her to win?
Which one do I want, like, do I wanna challenge? Which is true in most marriages. But dealing with two alphas, you have to be even more strategic.
Ryan: Totally. But but that gives you the ability to plan ahead. Yeah. Right? And so now you plant you can plant seeds ahead of time, put things in the calendar in advance.
Speaker: Mhmm.
Ryan: She loves that because you're being proactive now. You're you're being thoughtful. And now the female version of this that we hear is like my love languages. Mhmm. Well, the business entrepreneurial approach is the predictive index Yeah.
To your marriage. Right? And so, no. You know, on a real note, it going through all these all these challenges and living in England and and we're on opposite work schedules.
Steve: Mhmm.
Ryan: Plus, we have a small child. Like, that is it's been a lot. So Yeah. Every little thing that you can do to give yourself any kinda edge there is really, really helpful. Knowing that my wife loves her independence, I need to be proactive in planning stuff in advance so she has something to look forward to so she can be like, okay.
This is my time. Mhmm. And she can, like, get through all the shit leading up to that because she has something in the schedule to look forward to that we can do together.
Steve: Yeah. What I have found is by planning ahead of time, she can now plan around that.
Ryan: Exactly. Yep.
Steve: That's, like, the biggest thing for her. She can plan around our existing plans. It's when I mess with her plans that I'm I'm getting ready for the dog house. So we talked about a couple different things here. Yes.
Predictive index, you guys wanna check it out. I think it's just predictiveindex.com. Yeah. Right? And then the stuff we're talking about hiring, you know, salespeople, manning salespeople, that's something that we offer with our sales leadership.
So you guys are interested, just, comment below. And then, I took the PI. I have my take the PI, and there's that test that says not the test, but the results show, like, how to cooperate or how to interact as two PIs. Have you taken the Enneagram? No.
So, Enneagram is some, like, really old thing. It's, like, thousands of years old. And I took it, and my wife took it. And I found that that Enneagram, how to how to interact with each other, was even more precise.
Ryan: Oh, wow.
Steve: It's like, here are the things you fight about. Here are the things that
Ryan: you're like, yes.
Steve: Yeah. They have it for spouses. Like, that makes total sense. Yeah.
Ryan: So that's something else
Steve: to check out as well. Alright. And there's one more lesson, right, before we get to the big big loss. Yes.
Ryan: What's the last one? So the last one is while all of this has been going on, allowing it to impact your future confidence and your decision making. Mhmm. Now bad things happen to you. Bad things happen to people all the time.
It's all relative in your life. Right? There's people starving in Africa. There's people with better opportunities, worse opportunities. You have to have the ability, especially in entrepreneurship when you're just getting your you know what kicked in on a regular basis
Steve: Mhmm.
Ryan: The ability to zoom out. Yeah. And you have to continue to ask yourself, I can't control that. What is how can I control in this moment what my action is and what my plan is? If you don't do that, you allow the emotion of the situation feel way bigger than it is.
Mhmm. Right? And then you start, like, easier said than done. But the but that's something that I really found out about myself is I I got wrapped up in some of that. I coulda just, in these tough moments, doubled down, gotten back on the phones earlier, whatever I needed to do in the business, and been less emotional.
And I'm not an emotional person right away, but, like, you have to be able to zoom out and control what you can control. Yeah. Like, it doesn't serve you to feel sorry for yourself. I know everybody has a different grieving process or whatever that means, or meditation or
Speaker: Mhmm.
Ryan: Whatever the hell, you know, people do these days to get their mind right. Right. All of that is really just distraction. You just need to do the freaking work. Mhmm.
Like so I think I wasted a bit of time when all this change was happening trying to figure out what to do Mhmm. Instead of just attacking it head on.
Steve: So you're saying, if I'm hearing correctly, you wasted too much time feeling bad for yourself. Yeah. Okay. Yeah. So And I
Ryan: get over things pretty quickly. So I'm I'm probably my harshest critic there. But, like, even a even a minute where your mind is thinking about, oh, that lawsuit going on or, oh, prices have changed. What are we gonna do Mhmm. In this situation?
Like, it's just not helpful. It's not a helpful framework for decision making and and future you.
Steve: Yeah. So knowing what you know now, let's say something catastrophic happens again. I mean, it was only one a year. So
Ryan: But on a serious note, no. It's it is too expected. Right.
Steve: So now something catastrophic happens for business. What are you doing differently with this new found, lesson?
Ryan: Yeah. So it's it's about it's about a framework of expecting failure instead of fighting it.
Steve: Mhmm.
Ryan: People are gonna think that I'm probably a little cuckoo after after the show, especially after we talk about the big failure, the biggest one. But in 2020, 2021, you know, when we moved to England, I was the kind of guy that was like, I just wanna see how far I can push the gas.
Steve: Mhmm.
Ryan: I'm all gas, no brakes. I know that I'm gonna fail. I just can't crash and die. Mhmm. And I'm wired like that.
I wanted to see how far I could go Mhmm. Or else I would never know.
Steve: Right.
Ryan: Right? I'm just weird like that. I don't know if anybody else listening to this. I don't know if that sounds like you, but, like, I really wanted to see how much could I put on my plate knowing that I would fail and see what happens. Because I I truly believe the best amount of growth, the fastest pace of growth Mhmm.
Comes from who can fail hardest and fail fastest. Yeah. So, like, that was what I went in, the mindset that I went in with in the beginning. And then when it starts happening to you, you start realizing, oh, this isn't a week long lesson. This isn't a month long lesson.
This isn't a one year lesson. Like, this this could be a five year lesson, and it changes your perspective a little bit. So now knowing that, you know, future me is thankful that I went through all these things. Right. But me me now is fighting it.
Right? Me me now doesn't like it even though I told myself that I liked it and I wanted to do it to begin
Speaker: with. Mhmm.
Steve: So you don't regret it. Are you going a a little less gas today than before? 100%. Yeah.
Ryan: Yeah. But but I had to and that that's the thing is, like, well, Ryan, have you could could you have ended up in the same position or knowing, like, how much gas is too much gas without going through that, and there's no way I could have. I had to do that. Mhmm. I had to.
Yeah. Now when we're gonna talk about this, a lot of this stuff was completely out of my control, and I actually didn't really I was naive, but I didn't make any glaring errors Mhmm. Where you're gonna be like, oh, yeah. You shouldn't have done that. Right.
Like, it was all circumstantial things that happened to me that were outside of my control, but what I could control is how I handled them.
Steve: There's a a concept in, you know, racing where, like, you want the car to be just a little bit before out of control, but you can't find that limit now unless you're pushing the car to the limits of how of staying in control and out of control. And, like, these guys have to crash. The race car drivers have to crash, or they'll never find a limit. They'll never find greatness. Yeah.
Right? And then, you know, all the personal development stuff is, like, you you gotta find what your comfort zone is and then go outside of it. Otherwise, you can't grow. Yep.
Speaker: As a matter
Steve: of fact, you know, is like, when you're talking about, you gotta figure out where you can crash and burn. Like, it just takes me back to myself because, like, I would tell my teams, like, I'm fine going a 150 in a Prius. Like, let's figure out how fast we can go until the car starts breaking, and then we're gonna do a pit stop. And then we're gonna upgrade that part of the car, and we're gonna go back out and see how fast we can take this Prius. Kinda sounds like you're talking about the same thing.
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Ryan: Yeah. The the difference though that I and this is the problem with that mindset, the contrarian view, right, is if you crash in a car, you have to make sure, number one, you can walk out. Mhmm. You can walk away uninjured Mhmm. Or alive.
Steve: Mhmm. Right? Oh, we call that PK.
Ryan: Yeah. But you can get in another car. Yeah. Right? When you when you have some kind of business failure or life failure
Steve: Mhmm.
Ryan: That you put yourself in, it's not like an again, a not a next week thing. Like, this can beat you. Like, you're my one of my favorite Alex Hormozi frames. You know, the rocky cutscene lasts ninety seconds in the movie Mhmm. And it can last five years in real life.
Steve: Mhmm.
Ryan: So at the moment that you've already learned the lesson and you've already learned the limit
Steve: Mhmm. It could
Ryan: be more years of reminding you of that lesson.
Steve: Oh, yeah. Still learning some of those lessons.
Ryan: 100%. But it but it is really now I expect them to happen. And so I make decisions, and I and I future forecast, and I plan ahead expecting for those failures. Mhmm. And I risk weight adjust them significantly higher, especially macro with what's going on in the economy and interest rates and everything.
You just have to adjust for far greater than you think, especially if you're a young, naive, three sigma independent entrepreneur.
Steve: How are you doing that? How are you, assessing and, like, limiting the risk now?
Ryan: I'm not doing any development deals, so that's for one. Yeah. A lot of it's
Steve: So stay inside your stay in your lane. Know what you're good at. Focus. Focus. Focus.
Ryan: Mhmm. Know just like, you have to learning how to say no is a skill. Mhmm. Right? Before, it was yes, yes, yes to everything because I just wanted to see what would happen Right.
And how much I could learn from it. And I really had a growth mindset about it. But, yeah, it's it is now the default is no instead of yes. And and, yeah, and solvable problem and whale club and everything, that's exactly what's taught. Right?
Steve: Yeah. Whale club is like, how do we present like, how do we limit the downside while playing planning for the upside? And then, Larry Yatch, who's been on the show before, you know, we talk about, like, you have to plan to fail. It's like, what do you mean? Like, because we've heard the expression, if you fail the plan, you plan to fail.
Right? It's like like, no. Like, you actually have to plan to fail. Like, what happens if this doesn't work out? Right?
And so, like, they have, like, they put chains. When they go out in their Humvees, you know, these seals, they have chains just so if, like, two tires blow out, they can connect to Humvees together with chains so that they can still drive if the Humvee is like, duh. That's obvious. Right? Because they only have one spare.
Yeah. So, like, they plan for bad things to happen, and then they'll be fine. Mhmm. So, now going now to the big lesson.
Ryan: The big one.
Steve: The big one. Right? And I'm like, who cares? Like, you lose 7 figures in one day. Like, what's what's what's the big deal?
So what happened?
Ryan: Yeah. What didn't happen? That's what didn't happen? That's a better question. Yeah.
So when when I was in this phase of, conquest, I guess you could say in 2021 When you're invincible? When I was invincible. Yeah. The market was going bananas. Right?
So this was mid twenty twenty one just as a time reference. So this was already over three years ago, okay, that I'm still paying lessons for now. Right? So that I mean, that's it has really, really affected my life. You know?
So so the first mistake was I I have gotten mentorship from a lot of different people. And for this particular situation, I chose the wrong mentor. Mhmm. That that was the biggest one, and I I ignored some warning signs because I was a little bit naive, and I had also worked with this person for a while.
Steve: Mhmm.
Ryan: So I bought a deal from him. Mhmm. It was a development deal. I have never done a development deal before. So, of course, if you've never done a development deal before, you better either partner up so you can learn or have a coach or mentor that can guide you through the process.
Steve: Someone that can underwrite the deal and point out all the pitfalls.
Ryan: Absolutely. Yeah. So I just I didn't know what I didn't know because I that's why I had the mentor. Right?
Steve: Now So you actually did the right thing. It was just the wrong person.
Ryan: It was just the wrong person. Yeah. Yeah. Because what I didn't what I didn't know is this particular property, he had only owned for, like, two or three months.
Steve: Mhmm.
Ryan: Now in a development deal, when you're dealing with city regulations, zoning, permits, you know, planned development, you got, you you know, city planning meetings. You have all these hurdles and hoops to jump through. It's completely different than anything I had ever done before. Mhmm. I had no freaking clue, like, the checkpoints.
Oh, you need to have a fire truck turnaround, and you need to have the the the fire service, to come sign off on where the hydrant's located and, like, all of these dumb, stupid things.
Steve: Fire truck turnaround. What the hell are you talking about?
Ryan: Exactly. Yeah. Right? So he had only owned it for two or three months before selling me. You cannot do a proper amount of due diligence on where the property is at Mhmm.
In that short of a period of time unless you have horizontal permits or vertical permits in hand Mhmm. Which is like a checkpoint. Right? That's you've gone through planning and zoning. You've gone through your different permitting process.
Now, boom, you have your permits in hand. If you don't have your permits in hand and people are trying to sell a property that's fully entitled, they're completely full of shit. Mhmm. They could be at step one in the process. They could be at step 99 in the process, and anywhere in between, you have no idea.
Yeah. So he sold it to me, telling me all I needed to do was get, like, the fire chief to sign off on the location of the hydrant, and boom, I would have my permits. I fully entitled
Steve: this house conveyed to you.
Ryan: Absolutely. But I didn't know he had only owned it for two or three months, so he actually hadn't gone through the full due diligence to even know himself. So it wasn't that he was trying to sell me something to deceive me. Mhmm. It was that he was being naive himself.
Yeah.
Steve: But, I mean, I hear fully entitled, it was like, we're ready to start work. Shovel ready. Yep. Yeah. Yep.
Ryan: Okay. It was not the case.
Steve: Okay.
Ryan: So here I go. I fund a full construction loan personally guaranteed Yeah. On the premise that it's shovel ready or that I need to go to the fire chief to sign off. It's it'll be a couple weeks, and then I'll be able to start. Right.
Nine months later, I finally get my permits. I fully funded, like, a 4 and a half million dollar construction loan, 3 and a half million construction loan. Mhmm. That's a lot of interest in nine months.
Steve: It is. I'm curious. This was a bank that you went through?
Ryan: No. It was a, like, a quasi hard money type of Gotcha.
Steve: Because I
Ryan: was it was my first one.
Steve: Okay.
Ryan: I didn't I had some silent partners in it, but I was personally guaranteed, and I was the one on the Yeah.
Steve: Because I would imagine a bank would have required all the final paperwork. Yep. So there's another lesson there.
Ryan: Yep. Okay. Totally.
Steve: Yeah.
Ryan: So so that was the first domino to fall, if you will. So I start nine months late. Okay. Great. Big whoop.
Steve: What was the interest on that?
Ryan: It was 10 and a
Steve: half percent. So almost a point a month. Yes. So 40 k
Speaker: Yeah. A month.
Ryan: Yep. Yeah. So now I hadn't drawn on it, so it was it was less than that. I hadn't drawn on it. It was just the land acquisition
Steve: Mhmm.
Ryan: Plus, you know, some soft costs for the old plans and and other things. But, so fast forward that we we didn't break ground then until about spring twenty twenty two. So this is still early. Right? Rates haven't haven't changed yet.
The market hasn't changed yet. Actually, things in Boise were selling sub four cap. I underwrote this thing worst case at a 5.25. Brand new product in Boise, and thank god it was in a a location, thank god, was selling sub four cap brand new stuff. I underwrote it conservatively, a 5.25.
Like, that that was a big thing for me. But the appraisal came in low. The first appraisal when I was buying it
Steve: Mhmm.
Ryan: He he told me to go, hey. That's wrong. Go argue it. Try to argue. They wouldn't do it.
I paid another $6 for an appraisal. They finally gave me the numbers that the lender wanted so that he could be fully cashed out of the deal. Mhmm. But when we start construction here in spring twenty twenty two, like, I I still feel pretty good about the deal. You know?
Like, it's not like I missed underwriting the deal, and I, like, was too aggressive betting on appreciation. I was actually my engineer brain doesn't allow me to, with spreadsheets, be, like, overly optimistic. Right? So the contractor that I was referred to, started off okay. Started off okay.
Steve: Mhmm.
Ryan: You know, we got foundations poured. We got horizontal done. And as we were starting to go vertical, now it's 2022, and interest rates have just changed. I get an email in November 2022 from my lender that says, hey. We're illiquid, and we can no longer fund your construction draws.
We think it's just a delay, but we're we're doing everything we can you know, the the sugarcoating everything. Mhmm. We're doing everything we can to get this, you know, draw to you as fast as possible. I'm like I'm like putting up framing at this point. I got contractors walking off the job because I can't pay them.
Mhmm. So they're in breach. The my lender breached their loan agreement. So all of a sudden, I'm like, holy shit. I gotta I gotta fund whatever I can to keep this moving out of my own pocket because guess what?
I can't go to another lender. They're gonna look at it. It's a half done construction job. They're not gonna give me favorable terms on that. Yeah.
It's like a half built thing. Mhmm. So I'm in a I'm in a real bad situation here when my lender is just like, sorry. We're illiquid. Did they give you did you find out why?
They just they just got over leveraged. So because when the market changed and interest rates increased, people couldn't exit some of these bigger deals. They were taking longer days on market. So they had probably projected an average, right, of when their their cash conversion cycle and when their liquidity would come back in. And when that shot over the moon, they just missed all their targets and everything.
So that was the that was the first oh, shit moment. So I I'm limping along there, but I still suffered about, like, four months of delay. They actually got their act together and started fund were able to finally start funding these again. So I like, it could have been worse. Mhmm.
Honestly, worse than a 1,200,000 loss because they were actually able to fund. I thought they would go belly up. When I got that email, I was like, oh, no. This is probably what happened in o eight and o nine. Like, I'm screwed.
Yeah. Yeah. So my contractor keeps working, but things are getting missed. So my contractor starts being, you know I I'm not in Boise. Right?
Steve: Mhmm.
Ryan: Now the and this is me being my naive too. Like, I had a project manager, but he was mostly doing flips. I had him stop by occasionally. This was my GC. He was running all the subs and everything.
I gave him total control again because he was referred to me by someone that I trusted that I was paying for mentorship.
Steve: Yeah. So I didn't think
Ryan: I needed to oversee him a lot. So I brought in another contractor just as because I felt things were not going right. And I'll never forget. I was in Riga, Latvia, with my wife.
Steve: Mhmm.
Ryan: Fantastic place. Right on the water. Super fun. Eastern Europe, great place. Highly recommend.
And I'll never forget, we're sitting in our Airbnb, and I get a call from this other GC, and he's like, hey. What is going on here? And I'm like, what do you mean what's going on here? Like, we you know, this is where we're at, and these are. No, dude.
Like, you just got red tagged from the city. The inspector came out here. All of your shit is not built to fire code. Wow. And I'm like, not built to fire code?
He's like, yeah. You're using the wrong width drywall. You know, you're not your insulation isn't right. You got all these other things going on. And I'm like, now what?
And he goes, well, I ran some quick numbers. I think it's gonna be another $800,000 to finish this. And I'm like, I had already funded almost all of my construction loan.
Steve: Mhmm.
Ryan: So I'm, like, $800. Like, what am I gonna do? Yeah. You know? So, yeah, I'll I'll never forget that moment because it was, like, a real holy crap.
Like, this is this is serious. I don't know how I'm gonna get out of this or what I'm gonna do. And, like, all the all the feelings of emotion then of kind of betrayal of how could this happen, how could I be such an idiot, like, it really beating myself up with, like, we were talking about earlier. And that was definitely a moment where I felt sorry for myself for a while. So, yeah, what next?
I slowly started chipping away. I raised a little bit of private money, but I essentially had to liquidate some of my properties and Even more properties. Even more properties of my personal properties. I'm just limping along. Right?
Because at that moment, I had a decision. I can let this go to foreclosure, but it's personally guaranteed. So if it sells at auction, they could probably come after my personal assets anyways. When I ran and, god, that is not that is not an exercise that you wanna do. No.
Trust me. No. Like, how how do I wanna be killed, basically? Yeah. But when I did that exercise, it made more sense to finish it and to really just bootstrap it and get it done.
So that's what I did. I spent the next, you know, year, year and a half, brought in a different GC. They ripped everything out. I had to pay for everything to get ripped out. I was selling properties month by month to to get this thing finished.
Meanwhile, the lender is hitting me with default interest and extension fees even though they breached their contract by causing me a delay of four months to begin with. They're just hitting me from all angles
Steve: Mhmm.
Ryan: Through this whole thing. And there's lawsuits out the wazoo going on with this. So who knows when that'll get resolved? Yeah. But this whole thing this whole time, I'm thinking I just need to get it done and get sold, and I I couldn't I couldn't let it go to foreclosure because I had some private silent investors on
Steve: it Mhmm.
Ryan: That I also guaranteed interest. And I was like, I my reputation's on the line. I gotta do whatever I need to do to make sure that they get made whole. Right. So we finished the project, and when we finish it, the market's changed, and it takes me about another year and a half from that point to finally finish it.
We just sold it here in July 2024. It was only 12 units, Steve. It was not this huge Really? It was 12 unit multifamily project, three fourplexes. It was not thank god.
It wasn't something bigger. But, I mean, the so I ended up eating that 800 k that I had to limp along with by selling all my personal properties, plus when my construction lender went illiquid me funding all that stuff, so I'm in the hole, like, over $1,000,000, and then it's it's sold because the market had changed. It sold for a little bit less than what our worst case scenario projected wise. Only a little bit. After all that, when I looked at the numbers, I was like, it actually didn't sell.
It sold at, like, a 5 and a half. Mhmm. And my worst case was 5.25. It wasn't that big of a miss on the underwriting side. Mhmm.
My rents were dialed in. My, you know, my pro form a and everything was pretty solid. Considering what happened, interest rates doubled. Right? So thank god, again, it was in a good location, but, yeah, I I had to totally eat all that.
And now I have to go after the lender. I have to go after the contractor to try to get some money back. I yeah. Who knows?
Steve: What was the GC doing when they were putting in the wrong materials?
Ryan: I think he was just not there. I think he was just letting subs do it. And then, visually, if you're not on top of it and you're not actually looking at what's being installed, it could look okay. Right?
Steve: So he was just kinda being, he was being inattentive. Yes. Right. So he wasn't what you classically hear of them, like, stealing your materials or stuff like that, stealing your money. He just was incompetent.
Ryan: Now there was skipped over this part. There was an issue with the cabinets. Mhmm. So he subbed out a cabinet company to deliver all the cabinets. I sent the wire directly to the cabinet company for materials because I'm not sending money directly to this GC.
The cabinets never showed up. So that was about $80 for all those. I do a little bit of digging. The LLC is owned by the GC's brother. And I'm like,
Steve: oh, fuck.
Ryan: Yeah. You know? Like, I know exactly what's happened here. So I this was before I got rid of that GC, but I called him up, and I was like, dude, what like, where are the cabinets? Like, this is, oh, this is your brother's company?
Like, what's going on? He's like, oh, no. No. We'll we'll get the cabinets. Dude shows up with a bunch of Lowe's, like, boxes of Lowe's cabinets on-site.
He's got, like, four cabinets out of the 160 that we need for the the 12 units, and he's like, we're gonna get more. We're gonna get more. And I'm like, no. This is obviously, he was it was a total fraud.
Steve: Mhmm.
Ryan: Total fraud.
Steve: Right. So yeah.
Ryan: Everything that could go wrong went wrong.
Steve: And you're all doing this while you're in London. Yes. So I wanna go back to well, losing the 800 k or finding out the 800 k. Was that before or after the 80 k TC fee?
Ryan: That was after.
Steve: That was after. Okay. So the 80 k wasn't so bad anymore. Right. It was kinda dwarfed.
Absolutely. Yeah. Yeah. Easy to move on from. Alright.
So wrong mentor. So what questions did you not ask when you were because you worked with multiple mentors.
Ryan: I worked with multiple mentors. This particular one, I had worked for almost worked with for almost a year.
Steve: Yeah. So what do you wish you asked or looked for that you didn't?
Ryan: I think it was more what I ignored Mhmm. Than For something you saw
Steve: that didn't add up, but you didn't question. Right. Didn't have the courage to question. Right.
Ryan: Yeah.
Steve: A
Ryan: lot of that was financial literacy.
Steve: Mhmm.
Ryan: So now in hindsight, it's like, oh, yeah. When he when he said that or asked those questions, that's not something with that somebody that's, like, really in the details would
Steve: Mhmm.
Ryan: Would ask. Right. So, again and then this is where, like, it really hurts me to talk about this because, I mean, I like, I knew him really well. I hung out with his family. I like, we were really close.
Steve: Mhmm. And I you
Ryan: know, I it wasn't it wasn't purposeful in nature. Mhmm. I think he was just not in the details at all. Mhmm. So I I don't think he did any of it on purpose, but, the the shameful thing is that when I called him and had these difficult discussions, like, dude, what is going on?
Like, I need help. What
Steve: Help me navigate this.
Ryan: Yes. He was very defensive. Yeah. He he did help me, like, finish the project with, you know, bringing in some extra help to undo what the other PC messed up. But by then, the damage was already already done, and it was just the lack of accountability Mhmm.
Of, you know, when I make a mistake, whether it I intend to or not, I will tell you I made a mistake, and I'm gonna do whatever I can to make it right. And he just didn't do that.
Steve: Well, That kinda goes to show when you're talking about you have second lenders that you had to make whole. You're not gonna left let them, you know, leave them holding the bag. Right? And it's tough because there's people in the industry that you and I know they're full of it. We can tell by the way they talk Yes.
They're full of it. But it's impossible for someone on the outside that's newer to be able to tell the difference. This sucks.
Ryan: It does. And so that that's where I'm like, oh, man, Steve. When I get when I go back to these moments and I'm like, what could because trust me, what could I have done Mhmm. Is just a downward spiral for me of thinking Mhmm. Where it no longer becomes helpful of how do I move forward from this, but you just beat yourself up.
Mhmm. And it's it gets to a point where you're like, bad shit happened.
Steve: Mhmm.
Ryan: I I can't do anything about it now. Yeah. Here's here's what I need to do. Asking myself for the thirteenth time, how could I trust him? How could I not be more diligent?
How did I not check things more? It's just not helpful.
Steve: Yeah. So we have, like, a guru hotline bad guru hotline.
Ryan: Okay.
Steve: Alright. I just submit everything to Corey Thompson. Right? You follow him? Roughneck to real estate Uh-huh.
Dallas Fort Worth. Love that guy. So if there's anything like and goes, hey, Corey. Have you heard about this guy? And I just leave it there.
Just send him a message on Facebook. You don't think about this guy, and we just move on. That's my wholesale hotline. That's my or that's my bad guru hotline. Right?
Or was it was it the secret you know, when, the secret tips hotline? Right? Like, that's my, like, that's my tip hotline.
Ryan: And and and at the same time, though, it was all my fault. Mhmm. It was my fault. Yeah. I was doing so many things at once.
I was seriously going into that. I was like, this is my first development deal. I know that there's a lot of risk associated with this. Honestly, if I break even but I have all this experience under my belt, I would consider that a win 10 out of 10 times. It was it was my fault.
Yeah. So, like, I can't I hate sitting here talking about these failures, number one, because I don't want the audience for it to be an excuse to not take action. I that is the worst thing you can do. Absolutely. Right?
You just have to be calculated in how you do it. And once you get that focus, you go all in. But I can't I can't sit here and say, like, oh, man. That guy, he really he really screwed me over even though he may have, but it was totally my fault. It was preventable.
It was. Avoided it. Yeah. Yeah. I'm filming this video for
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Ryan: Yeah. So, beauty comes out of the struggle. So for me, we started doing something called Weimer method.
Steve: Mhmm.
Ryan: So, Weimer method is not to get too much in the weeds, but it's 0% interest cash in your bank account. An unlimited amount of 0% interest money in your bank account. How in the world do you do that? Right. We do a lot of creative finance deals.
Mhmm. Whether it's a seller finance or a subject to and then paying the seller's equity over time in a second position, a lot of times we can get those notes at 0% interest, so principal only payments. We're really, really good at that. Mhmm. The one piece we started adding, which really helped me get through this, we started doing substitutions of collateral.
Mhmm. So we've done over we've raised over a million dollars this year at 0% interest doing this, which was my savior. Like, this is this is how and now we're doing so many of these. It is incredible. But we we get a property under contract.
Let's say it's a seller finance. Let's say I buy it for 300 k.
Steve: Mhmm.
Ryan: I give the seller 20 k. I owe them $2.80. Yeah. I'm paying that 0% note over time.
Steve: Mhmm.
Ryan: Instead of that note being secured against that property, I put it in second position against one of my rentals with equity.
Steve: Mhmm.
Ryan: So now this subject property is free and clear.
Steve: Right. So I can flip it. Mhmm.
Ryan: And I get all that 280 k cash or more if it's worth more. Right?
Speaker: Right.
Ryan: At a at a discount. So now I have all that money at 0% interest in my account liquidity, and I get to keep the full benefit of that note against a completely different property.
Steve: Mhmm.
Ryan: So that's Weimer method. Yeah. It's a substitution of collateral for 0% interest notes.
Speaker: Yeah. So,
Steve: how did you come up with this?
Ryan: Yeah. Part of gosh. How did we come up with it? I think part of it was we were looking at ways that we needed liquidity. Mhmm.
And I think there was a a skinny deal that we had that was a straight seller finance at 0% interest, and we were like, it's not gonna cash flow. Needs a little bit of work. It's at, like, 80% of value, so it's you can't really flip it. What could we do here? Well, what if we did a substitution, a collateral
Steve: Mhmm.
Ryan: And we put that note against something else? Now all of a sudden, if I if I get that 280 k, I can go pay off other debts with it, and I can make money on a deal that really wouldn't make sense otherwise. Right. So it it honestly just came out of, like, a light bulb moment of innovation of how could we make this deal work. And that's the beauty of creative finance.
Steve: The best thing about creative finance.
Ryan: Like, you can do almost anything you want. Yeah. You know? So, yeah, it really came out of, like, a need for liquidity and capital. And that's the funny thing about this is going through all that failure and all that shit.
Mhmm. This would have never happened, this skill, that I can use for the rest of my life now. How much money do you think getting unlimited funds as 0% interest is gonna make me over a lifetime? Way the fuck more than 1,200,000.0. Yeah.
Right? Right. So so that's the funny part about it is looking back. It's like, oh, something really good has come out of this. Plus all those other lessons learned.
Steve: Right.
Ryan: And now we can apply this to a bunch of creative finance deals we do. So this year, we just did our biggest deal in company history. It was a Weimer Method deal.
Steve: Okay? Tell me what tell me about that.
Ryan: So we made just over 400 k in profit, and we got 500 k in cash at 0% interest. So say it again. 400 k. So we made 400 k profit. Mhmm.
And then we got an additional 500 k cash at zero percent interest in our account. So we got 900 k liquidity.
Steve: That's a pretty good deal. Pretty good deal.
Ryan: So I basically made up almost all the loss Yeah. Just from that one deal. Now I still have to pay that note. So it's not profit Sure. But it's at 0%.
So I can take that 500 k. I could pay off another property with more debt. I can spend a little bit of on marketing because it's at 0%. I can pay off whatever I wanna pay off.
Steve: Well and the best part well, for me, the best part is that you're not even paying taxes on the 500 k. Right? That's just debt.
Ryan: Free money. Yes. Free money.
Steve: Right? You're borrowing a zero, which in a what are we like right now? 2.4, 2.7 appreciating or inflation market. Right? It's free money.
You're getting paid basically to have money. Yeah.
Ryan: And and the funny thing is, Steve, I've I've made I have actually haven't done I might do a presentation on this at CG next time. But I don't see anybody else doing this in the space.
Steve: I don't see a lot of people talking about the the the thing I love about the old dogs, right, the guys that have been doing it longer than we've been alive, they know all this stuff. They know all this stuff. They know how to do it. It's easy. They know all these different ways to make a boatload of money without paying taxes.
Mhmm.
Ryan: Right? But they're they're the ones that aren't necessarily the gurus on social media. Right?
Steve: No. So You can't find these guys on social media.
Ryan: So now now some things you need to be aware of for this. Like, you can't put these notes against properties that don't have equity. So you have to have rentals with equity. Like, this isn't something a beginner could could do, right, which is part of the problem. Right?
You can't put somebody's note in second position against a property unless, number one, it's of equal or greater value and you have sufficient equity in the event that property value decreases. We're not trying to screw over Anybody. Sellers. Exactly. Yeah.
Exactly. So but we're very upfront. Ideally, if you wanna do this, and I I can teach you guys how to do this, but you have to have that property address that it's gonna be secured against ready when you sign the initial contract. Very important. It's gonna be way easier.
Yeah. And then there's just a separate one page substitution of collateral the title company uses at closing. Mhmm. It says the property that it's gonna be secured against, and then the seller signs off.
Steve: Mhmm.
Ryan: Yeah. But they have to approve it, and the title company tells them, here's how much is owed against this other property your notes being secured against. Are you okay with that? Right? This isn't the wild, wild west.
Like, you have to be very, very responsible for this. If you don't have any properties with equity, you can't do it.
Steve: No. It's interesting that you do it that way because I I would approach this with just what we're talking about right now. Is I would buy it with the collateral on that property.
Ryan: Yep.
Steve: And then I would just give you a notice. Hey. Just so you know, this collateral is now that collateral. Right? So you're 280 k sitting over here versus over versus here.
Right? And then they would just it would just be a notice. It wouldn't even be, like, an agreement.
Ryan: So we tried to do that. The title company said no. No. No.
Steve: Title company said no?
Ryan: They said you have to do it at closing. Really? Yep. On the purchase.
Steve: Yep. Good to know.
Ryan: Yeah. I mean, again, it's Idaho, so it depends on your state. But Yeah.
Steve: Well, I mean, I I wouldn't do it the way you're doing it right now. Right? I'm just saying, if I were to do it, the the the the beauty of substitution and collateral is that there's no limit to how many times you can do it. Right? You can just put over here.
Oh, hey. We're pursuing that purpose.
Ryan: Put this over here. They would not let us do that. They said every time we move it, we have to get a separate seller signature even with a POA and even with everything. So that's exciting. Might just
Steve: be our state. Mhmm.
Ryan: But, hey, that's fine.
Steve: But Yeah.
Ryan: But you can use that money to let's say you don't have any equity remaining. You can use that money to go pay off one of your rentals. Right. Right? Even if you have a conventional loan right now, you're you're paying 0% interest.
I mean, you're you're generating wealth automatically.
Steve: No matter why it's a win.
Ryan: Absolutely. Yeah.
Steve: Yeah. And you can just pay off your existing mortgages
Ryan: Yep.
Steve: With those. Okay. So let's see here. There was so what does your team look like today?
Ryan: Yeah. So today, we have three lead managers, three acquisitions, an operations manager, who's also our TC, my COO, Corey. That's it. Mhmm. Yeah.
We don't we don't have any project managers. We let a few go back in 2022. We're not flipping a a whole lot right now. Mhmm. We are really, really getting dialed in on the sales and marketing side, and wholesaling.
Steve: Yeah. How many you mentioned earlier having, the the gal on your team. She's looking at a thousand resumes in the last three months. Yeah. Is there a full time gig recruiting, or she's doing other things too?
Ryan: Other things. She's also our TC. Also your TC.
Steve: Yep. So she's multi talented.
Ryan: She she has a 400 COG score. Yeah. So she I what what is a per do you know what a perfect one is? She scored a perfect COG score
Speaker: Mhmm.
Ryan: Which I I've only seen one other time.
Steve: I don't know what the perfect COG score is. I I know It's
Ryan: a it might be a four fifty or something.
Steve: Four fifty.
Ryan: Yeah. Yeah. It was perfect. Yeah. So when you see that, right Mhmm.
That's somebody that can juggle a lot of things, not necessarily that you want to do that. But when you're a start up and people gotta wear different hats, you can have a high amount of confidence that they're gonna be able to pick things up quickly and retain things.
Steve: Pick things up, retain things, move fast. You don't have to hold their hands.
Ryan: You don't have to tell them to do the same thing six times Yeah. Like you do salespeople.
Steve: Yeah. One of the things I've learned, I didn't really embrace this until recently I learned this from a mentor, is that the people you wanna hire are the people that can move fast. Right? They don't have to be the smartest. They don't have to be the best.
But they have to be able to move fast. Yeah. Because otherwise, they're slowing down the organization. Yeah. Like, Like, because we we typically look for someone that's intelligent or highly skilled, but it doesn't matter how skilled you are.
Like, when you when you pointed this, I was like, so obvious. Right? Doesn't matter how good they are. It takes them a long time to do it. Yeah.
So we gotta be able to move fast. Speed is the most important thing in business, not intelligence or skills. Like, man, that's kinda crazy.
Ryan: Yeah. It's twofold. Because then because then it's how much can they handle Mhmm. And the speed at which they can operate, but then you also save time back as the manager in training them because you're not having to hold their hand through the whole process. So it really is a double whammy.
Mhmm. You're getting a two for one when you're hiring people with a good COG
Steve: score.
Ryan: Yeah. Every person that I've hired with a low low COG score has not worked out. Every it is
Steve: the number one predictor of job success. What is your, what is your number now as far as cutoff for the Cox score?
Ryan: It keeps creeping up. Mhmm.
Steve: Well, that's the way it goes. That's the way it goes.
Ryan: I think right now, I think two thirty.
Steve: Mhmm.
Ryan: They have to have, you know, prior sales experience out the wazoo. They have to have everything incredible for us to jump on that, but two fifty is really, like, our Yeah. Lowest. Yeah.
Steve: I think 230, 250 is kinda where I'm at as well. And, like, we've this is terrible. Right? Because, like, you you you remove yourself from the situation. You empower your team.
You will make the hiring decisions. Right? And you later on, you look at it.
Ryan: I was like, this guy has
Steve: a one eighty COG score. Like, who approved this? Yeah. Right? And it's our fault, again, for not not putting that there.
Right? I was like, see where this goes. Right? And, like, this is terrible. But, like, the regular means, like, have we fired that guy yet?
How's he doing? He's like, is that doing well? I was like, why is he still here? Yeah. Why is he still here?
But
Ryan: Yeah. Those those conversations are better had on the front end, just not
Steve: For sure way better at the front end because, like, the as heartless as I may appear and sound, right, the guy that you hire comes in. You like the guy. Your manager likes the guy. He gets along with everybody. He's a culture fit.
And now it's really hard to fire the guy even though firing the guy is the right decision. Yeah. Right? For both of
Ryan: you, by the way, for the employee as well.
Steve: Yeah. For both parties. And it's like, I can walk into your company as, like, Ryan, fire that guy. Right? Because I'm objective, impartial, and you're like, Steve, I know, but Yeah.
Right? And you could walk into my organization like, Steve, are you not embarrassed? Like, fire that guy now. I was like, I know, Ryan, but and so there's these people sneak in. And once they sneak in, it's hard to pull the band aid off.
Yeah.
Ryan: And what we're stating is obvious. Right. But but when you think about this is the real issue, what we're talking about makes a ton of sense. But when you realize the amount of work that it takes to go through that many resumes, the amount of interviews that you have to do just to find one person that you could hire Mhmm. Versus, well, he should be good enough.
Let's give him a shot. Mhmm. Hundreds of hours of work. Mhmm. Right?
Yeah. So what so this is the hard part. Right? It's, like, when you the reason that I hired an ops manager is because, like, I I can't do this. I can't keep up with I can't put the level of action that I need to into this.
I really have to hire somebody to do it. And although it wasn't even her core competency as a recruiter, she is doing far better than I ever could. So but that is really the challenge. You have to look yourself in the mirror and be like, am I ready for this? Because then once you realize I can't hire people with low COG scores, it eliminates a lot of people.
Steve: I mean, it eliminates a ton
Ryan: of people. A lot of people, and then you're like, crap. This is so much more work than I ever thought it would be. Mhmm.
Steve: So I know. But it goes back to what you were saying earlier. Right? If we treat recruiting like we do, looking for some home motivated homeowners, if we gave it that much attention, then where would it be? Yeah.
Yeah. And then, at some point along the way, you decided to offer coaching.
Ryan: Yes. Yeah. So we'll in that. So we'll do, just over we'll do about a 110 to a 120 deals this year Mhmm. When it's all said and done.
Before I get to the coaching part, though, seasonally, I don't know what it's like in Phoenix. It's amazing. Always. Seasonally, December, January, and February are always our biggest months for off market contracts. Every single year by, like, double.
Really. Every year in Boise. Now I don't know what it is for other people in The US, but with this election that just happened, which we don't need to necessarily get into that Mhmm. But because I'm interviewing you tomorrow, so that'll be fun. But
Steve: I might get canceled tomorrow, so don't want
Ryan: a drag show. Perfect. Can't wait. But now that we're past this emotional hang up for people Mhmm. I think you're gonna see a ton of people making decisions that need to sell this winter, and I think we're gonna see even more people sell in December, January, and February.
So if you are sitting on the fence right now and you're being conservative with your marketing, I actually I really think this is the time to press the gas. There's so much opportunity out there right now. Only people that need to sell do so in the middle of winter.
Steve: Oh, yeah.
Ryan: Plus, you have all these awkward Thanksgiving conversations. Right?
Steve: Mhmm.
Ryan: All this forced family time when people are making difficult decisions and talking about next steps. That's that's the reason why I think we always do more contract volume, but especially, like, December 26 to December 30, those four or five days is bonkers for us always.
Steve: So what I found, and this is purely anecdotal evidence, when I was on my own, The reason why I always did better in December it was mostly December than all the other months. Because I was the only one working. Like, I had no competition. Now this is years ago. Yeah.
Right? But, like, I loved December because I bought everything. I literally had no competition. Phoenix is probably a lot different today, but, you know, this is, like, ten years ago. If I met with a homeowner, it was around Christmas, it was a done deal.
Yeah. I didn't have to worry about other people coming. I didn't have to worry about I need to think about it. It's like, if I got a lead and I got them to agree to meet with me,
Speaker: it was
Steve: a done deal. Yeah. Yeah. And I think maybe Boise being a slightly smaller market or being a smaller market and, you know, you're the gorilla in there now. Yeah.
So Yeah. I get the hulk in the pond. I think it makes a little sense that you crush it. Right? Because you got brand recognition and you're you're the biggest player.
And not to say there's no other competitors there because I know there are more, but you've been around this whole time. Like, I was talking to, Steve Hamm at PPC Force.
Ryan: Right? Great dude.
Steve: Yeah. And he was saying, like, Doug Hopkins, opt in rate on his PPC ad, double everyone else in Phoenix. Just double. Because when you go on Google and you say sell my house fast and you see Doug Hopkins and you see myself, there's other people, it's like, I know Doug Hopkins. He's been here.
He's been on TV for twenty years.
Ryan: Yes. That that's the reason, though, to go deep Yeah. Into one market versus trying to take on a bunch. Right? Yeah.
But the same the same reason we have elevated contact rates in the weekends, in the fall, and winter versus weekends in the summer. Nobody's answering their phone. They're out doing stuff. Right? When it starts getting dark earlier, people spend a lot more time at home.
Yeah. It makes sense. You have more conversations. Your, you know, your marketing spend is actually going further when you don't think it's a complete opposite of
Steve: Mhmm.
Ryan: On market seasonality where in spring and summer, people tend to sell their homes.
Steve: Right? Yeah. So we don't see as much of that seasonality, at least not recently. And I was talking to, Michael Roos. Alright?
He's with, Lee Arnold down in, the other part of Idaho is really nice.
Ryan: Coeur D'Alene. Coeur
Steve: D'Alene. Right. They're down there. And I was complaining about, like, daylight saving, like, how it doesn't matter. Right?
And he's like he's like, I would disagree up north. It makes a difference. Like
Ryan: I I mean, in England right now Mhmm. It it gets dark at, like, 03:30.
Steve: Yeah. I can appreciate that.
Ryan: I have to take vitamin d supplements. Our whole family does. Yeah. Yeah.
Steve: It's There's no sympathy from us, Arizona desert boys.
Ryan: Now in the summer, it doesn't get dark till, like, 10:30 at night, so it's kinda cool.
Steve: But Really?
Ryan: Wild. Yeah.
Steve: So maybe that's why it makes sense for because, like, I always thought it was for, like, you know, the farmers and, like, so
Ryan: you can milk your cows and whatever. No cart no cows on the train farm. There
Steve: are no cows here. You know? And if there were, I wouldn't be the one milking it. I would delegate that. So alright.
Perfect. So we talked a lot about here. So we talked about, you know, like, we have, predictive index, which is huge for hiring. We got Weimer method and how to get loans at 0%. You're offering coaching.
Oh, we I missed this. Yeah. You touched on this. You also have a podcast.
Ryan: I do. Yeah. The Real Freedom Podcast. Yeah.
Steve: So I see you posting wild stuff there with Corey. What is the story with this?
Ryan: So the, yeah, the genesis of of Real Freedom, I wanted to be, like, really authentic.
Steve: Mhmm.
Ryan: I I hate the social media fake it stuff. Yeah. I like the real vulgar, crazy seller recorded calls. I it's fun. It is.
You know, if you don't have fun with that stuff, it's free entertainment. So so that's one of our favorite things to do is if we get a crazy seller on the phone We can just listen to it. We just listen to it and and and act it out. Right? It's almost like a comedy show to some degree.
Yeah. But, no, the the whole reason why I started that is because I I wanted to take, you know, the a a real look at what entrepreneurship is is truly like.
Steve: Mhmm.
Ryan: We start off every episode with people's most beautiful failure.
Steve: Mhmm.
Ryan: And it's just a way for to get vulnerable, so people understand, no. It's not all glamour and Lambos and watches and all that dumb shit that wholesalers love to flaunt. Like, it's real life. So we started that. Yeah, I do the private one on one coaching.
I we only have nine people right now. So we have, like, a little small group mastermind in private. It's not something I do to the masses. Most of my focus is still very much on offer now Idaho because of how much we wanna grow it. We wanna be a $10,000,000 company revenue company by 2027.
So my focus is very much there, but we will take on application only. If you are interested in mentorship, then
Steve: Yeah.
Ryan: You can shoot me a message.
Steve: How could someone reach you?
Ryan: On Instagram at real Ryan Wymer.
Steve: Yep. And then we also touched on so at real real Ryan Wymer, we all touched on we're in CG.
Ryan: Yep.
Steve: Whale Club. Yeah. Right? So you have a lot of things going on. So, like, we're focused.
Just have a lot of things going on, though. Well, I think,
Ryan: especially given what happened to me, in not having the right mentor necessarily, I don't want that to take away from all the incredible mentors that I have had. And when you have that sense of community and people that have been there before you, that's priceless. It really is. It's priceless because whatever you're going through and I know I had a lot of calls with you when I was going through this. Other people in CG Mhmm.
A lot of people have been through way worse stuff than that. Yeah. And and hearing how they handled it, I I can't tell you how valuable that is. It it really is priceless.
Steve: Yeah. The context you get, like, hey. I wasn't in your situation, but here's a situation I was in. Here's how I handled it. Right?
I mean, you probably collected a lot of those stories to figure out how to proceed with your situation.
Ryan: Yeah. And and I think too, you know, Hayes had that guy steal everything from him.
Steve: Mhmm.
Ryan: Right? Brent went through that personal guarantee
Steve: Mhmm.
Ryan: In 08/2009. Yeah. You know, Bill Green had that long con contractor that stole a crap load of money from him. You know, Alex Hormozi lost everything twice. I mean, like, the most successful people have had epic failures.
It's just a prerequisite to entrepreneurship. So if you can get in a community like that or you can get advice or be around these people, like, you have to have this. Right. Because it's it's if you are trying to conquer, if you're trying to if you're a three sigma independent or you're just somebody that really wants to go for it and live life on your terms, you have to have somebody that you can go to for advice. You can't try this on your own.
You're not gonna do it.
Steve: Oh, absolutely. You you have to have a tribe, and you have to get punched in the face perhaps multiple times. Yeah. And then we've also had, we had, Bill at our event here. Yes.
And he's crushing it. He's crushing.
Ryan: Yes. He is If you can hire ex military Mhmm. I'd like, I will do it every time. It is they have a an amount of discipline that they come in with. Mhmm.
They handle failure a lot better than than other industries.
Steve: They'll just
Ryan: say that. So so, yeah, every time, Steve, we send somebody to your sales training
Steve: Mhmm.
Ryan: Is just incredible. Like, they come back and they do a bunch of deals every single every single day.
Steve: Yeah. And I love that he is he's a little rough. Right? But he is so genuine, and he yearns. He has this desire to be the best version of himself.
And so he's like, here's what I'm doing. What am I doing wrong? Yep. How can I do it better? Yep.
Like, if you can just surround and hire yourself a bunch of those guys. Right? And then we can't finish this without talking about last night. So there's one thing I wanna talk about because we talked a lot about extreme ownership, and and we talked about leadership. Here we go.
Right? Well, it's just one thing because, like, there were a lot of things I was not a fan of on Democratic side.
Ryan: Well, this is the first podcast post election. It was literally yesterday. It
Steve: was literally last night.
Ryan: Yeah. Perfect. Right.
Steve: There are a lot of things I disagree with. Style, this and that, whatever. Right? Like, you wanna do it that way? I don't agree with it, but I can understand why you did it that way.
Right? There's a lot of those things. Like, I wanna agree with that decision about whoever's running your campaign, very different ideologically how we wanna run things. But I would say the thing that was the most disappointing happened last night, and it was her at Howard University for the celebration party. Right?
And, like, at 10:30, my time, which was 12:30 eastern, they're like, hey, everyone. Go to bed. We're going to figure this out tomorrow. But she sent out, like, some dude. I don't know if this is her campaign manager or what.
Right? But she didn't come out and do it. These people are on the freezing cold. I don't know what it's like temperature wise, twelve thirty. I don't know what state Howard is in,
Ryan: but it looked pretty cold. It's gotta be Northeast. Yeah.
Steve: Yeah. It looked pretty cold. Like, they're all out there. Like, your people went out there and fought for you. Like, these are your loyal soldiers.
Like, to go to someone's, like, campaign party, these are the most loyal of the loyal 100%. Yeah. Right? And you don't have you don't have it in you to go out there as like, hey. We fought a good fight.
It's not looking good, but let's continue this tomorrow. You send out some other guy. Like, for me, I'm so glad she didn't win because if she can't show up for her most loyal supporters, how is she gonna show up for Americans every day? That's how I see it. Right?
And, like, I think about it. Like, we mentioned sub two and Pace Morby a moment ago. Like, could you imagine if Pace was running for president? Right? And he didn't it wasn't looking good, which I don't know how it's possible.
He's, like, he's a first ballot. Right? For for sure, first ballot for president. Right? But let's say he doesn't win.
Could you imagine at his campaign thing, him not showing up to meet his community?
Ryan: It it wouldn't even cross his mind as a possibility to not do it. Yeah. Right? It would be so against everything about him. And and you contrast that with Trump Mhmm.
Who's getting shot at Right. And standing up while he could get shot in the face. Right. I mean, that's a pretty drastic swing in leadership. Right?
Right. So I don't care. I I don't like politics. I'm not even I don't even watch the news very often, but that is very much an example of anti leadership. Yeah.
That is weak leadership.
Steve: Yeah. So we talk about, you know, extreme ownership and accountability and leading the people. It was like for me, I was like, man, thank gosh you didn't win because that's wild to not show up for your most loyal people. Not even like, these are people from my state or whatever. Like, these are the people that are going to war with you.
Ryan: Yeah. And out of ego, by the way. Yeah. That's the only reason you don't do it. Yeah.
It's because you feel, insecure or or shame on some level that that you've disappointed either yourself or people around you, and you just can't own it. You put yourself before others. Absolutely. Yeah.
Steve: Yeah. And then, look. You have an ego. I have an ego. Like, there's no, like, Trump's got an ego.
Right? Like, we're not saying No kidding. Yeah.
Ryan: We can't
Steve: we're not saying this is, like, you can't have an ego. It's just that you have to put others first at times. And, like, for me, that was, like, the the darkest example I could see of her entire campaign.
Ryan: Well, you find out people's true colors and adversity.
Steve: Exactly. I think I can't remember the exact words, but, I mean, that's a paraphrase of what Martin Luther King said. Yeah. Right? Like, through adversity, you you find out who has the courage.
Yeah. Their true colors come out. So alright. So we talked about a lot. And, again, you know, Weimer method's fascinating.
I wanna learn more about this. I wanna learn how to do this. What are some last words you want to leave everyone with?
Ryan: Winter is coming. No. I I I That's not part
Steve: of how it feels in London. But over here
Ryan: No. I I really think, you don't need to floor it like I floored it in 2021, but I really think now that the election is behind us, I mean, you saw what the stock market did today Mhmm. Their reaction.
Steve: Right? They feel they feel good about it.
Ryan: They feel good about it. Bitcoin feels great about it. Bitcoin feels great about it. The ten year yield, unfortunately, is also feels good about it, bond yields. So mortgage rates are are getting really high right now.
Speaker: Mhmm.
Ryan: But when you when we deal with an industry based on emotional decision making like we do with properties Mhmm. When you remove emotional barriers for people, they begin to get confidence. So now we've had a few years of rates being higher. The election is behind us. It's winter.
You're gonna find a lot of people that have newfound optimism in the market and newfound confidence to make decisions. Yeah. And that's good for business. Now you gotta be careful about doing flips and stuff when with rates as high if you're in a one of those affordability ceiling markets.
Speaker: Mhmm.
Ryan: But there's a reason why we're hiring more skills salespeople. We're not dialing back marketing right now. This is definitely the the time to do it. Because you're gonna you're gonna see watch in January. People are gonna go bananas again.
Everybody's gonna jump back in at once.
Steve: Yeah. I think to your point, like, everyone has been kinda like, let's see. Let's wait. We don't know what's gonna happen. Everyone that's been waiting and maybe metaphorically holding their breath Yes.
Is now gonna do something. They don't know what, but they're gonna do something
Ryan: now. Yeah. And this all comes back to control, which you can control. Right? So you don't need to be an idiot about it and just be ridiculous.
Steve: Mhmm.
Ryan: But when if you zig when other people zag, that's usually a pretty good recipe for success, especially in real estate. Absolutely.
Steve: Thank you so much. Always great Great having you. Yeah. Thank Thank you guys for watching. We'll see you guys next time.
Speaker: Shout out to Steve train. Jump on the Steve train. Disrupt us.
