How to Wholesale 15 to 20,000 Houses a Year

How to Wholesale 15 to 20,000 Houses a Year | Disruptors Podcast

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Stu Denier: You mentioned the word wholesale before. I don't like that word. There are a number of bad actors out there that do nothing but I think cast a very large shadow over this industry. I think that that word synonymous with particularly that section of the industry. You know, I spent a lot of time around reading the law because of situations that you've highlighted before and trying to understand.

And there's a lot of gaps in it. Mhmm. And it's just not clear. And you can call and ask for answers and you won't get it. And so sometimes you've got to make judgment calls and sometimes you make a wrong judgment call.

Mhmm. But there's a lot of people that know what they're doing. It's just simply not correct. And I think that they push forward or they justify it somehow. That tag wholesaler is used so much on social media.

And, you know, I look at a guy dressed like a rodeo clown or or something like that that's whooping around on the stage. Yeah. And I do have issue with it. I don't think it looks good on us. At some stage, we've gotta say, okay.

I think that I don't wanna be associated with that. We're at that stage now.

Steve Trang: Hey, everybody. Thanks for joining us for today's episode of Disruptors. Here we have Stu Denier with New Western, and Stu came in from Dallas to talk about how they wholesale 15 to 20,000 houses a year, an unfathomable number. Really, really grateful to have Stu here, someone I look up to. He doesn't like it when I say that, but he's definitely someone I look up to.

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You ready?

Stu: I'm ready, Steve.

Steve: Alright. So before you got into real estate, what was life like?

Stu: Well, I was originally I base I guess I started my career in in, commodities Mhmm. And, in The US. So I came over here to trade commodities. At the time, it was gonna be the euro, but it ended up being oil and gas and and that sort of stuff. So I was a trader, and I worked at a clearing house as well.

Steve: On, Wall Street?

Stu: Chicago Merc.

Steve: Chicago.

Stu: And and the New York Merc. Okay. New York what? Mercantile.

Steve: Oh, Mercantile. Gotcha. Okay. So gotcha. So then how did you get into real estate?

Stu: I fell backwards into real estate. It was an accident. I actually even though that job was incredible, as a learning curve, I really didn't enjoy it. Mhmm. And, I had a two year deal, and I was gonna sort of round that out and be done with it and fell backwards into real estate, and had no intention to do it.

But Yeah. That's how it happened.

Steve: So what exactly is commodities trading? I mean, we're talking like is this

Stu: I was doing, when I started off, options trading Mhmm. And futures. So, again, oil, gas, I'm trying to think of the movie. I had Eddie Murphy in it. Yeah.

Steve: I'm thinking of the same one too with the orange.

Stu: Yeah. Exactly. Exactly. Yeah. That that was what it was.

That that was what I was doing.

Steve: Got it. But you fell backwards into real estate.

Stu: Yeah. I, you know, it's been a long time, but bought a house, sold a house, and was kind of taken back how straightforward, easy, and Mhmm. And then bumped into a couple of people, was dating a girl, and and introduced me to, real estate and her friend and yeah. It was truly just a hodgepodge of different, strange events that happened that sort of led me into real estate.

Steve: Okay. So how do you cut your teeth? Like, what what was it exactly you first did when you started doing real estate?

Stu: It was investment real estate. Mhmm. Way back in the day, there was a company that did a lot of investment real estate stuff, and I was based in South Florida at the time. And they had a shop. And I'd come from the investment world, and my degree had been around management and business, and and and so it just naturally happened that way.

Steve: Alright. So what were you doing at that particular shop? What were you

Stu: looking for? Again, investment stuff, buying, whether it be a multifamily, whether it be a duplex, whether it be a single family, something that may have needed Reno or anything along those sorts of lines. But, I mean, it was really the full gamut. You could do anything you wanted, any kind of if I met you and you had a desire to acquire a rental or you were looking at a new build condo or anything like that, I mean, it really was all flavors.

Steve: What year was this?

Stu: 2004, 2005, 2006 ish.

Steve: Okay. So it's funny today. Right? It's like we're so specialized in the the wholesaling world. Right?

We got the the cold callers, and then we have the inside salesperson. We call them the lead manager. We got the eyes outside salesperson, which is the acquisition manager. And then we got the dispo guy. Right?

And then that dispo guy, for a lot of people, is now is a cold wholesaling kinda role. But in o four, you just kinda sat in all seats. Did you find the motivated homeowner, and then you sold it to this other investor?

Stu: Exactly. I mean, it was really everything. So, I did a lot more work with people that were buying at the courthouse steps.

Steve: Mhmm.

Stu: But, yes, you were in every aspect of the role. Right. There was no direction. There was just in fact, I remember it was just like, here's your desktop, which I've already had back then. Mhmm.

There's the fax machine. This is your, rotary phone. Mhmm. And that was it. Go to work.

Steve: So you're cold calling?

Stu: I wasn't much of a cold caller. I was more of a networking and, again, courthouses. I went and sat and studied and became a nuisance for people at a courthouse.

Steve: So were you sourcing at the courthouse, or were you meeting buyers at the courthouse?

Stu: Again, I'm all I I got I got multiple seats. Yeah. Yeah. So so hat for, different hat for a different person, different occasion.

Steve: Yeah. Because that's it's it's an interesting world because, like, I got exposed to it a little bit around 08/00/2009 until, like, the institutions came in and just completely ruined it for all of us. But, like, you have this group of people that they all they did was just source deals from the courthouse, and they pay for drivers, take pictures, maybe there's some breaking and entering. Right? Whatever.

But then they would move the deal to a buyer, but there was, like even in, like, o nine and 10/11, they're, like, they're already specialized roles.

Stu: Yeah. I mean, it's very much sort of a shadow or a small niche part of the industry. Super niche. Super niche. I remember at the time, I had a little short English style car, and I was at Palm Beach County Courthouse.

And I remember driving, watching this guy come in the day I don't think he'd like to do it, and his motorcycle helmet's still on. Coming into this courthouse, speaking to this guy, old white haired dude, and I was like, what in the heck is this guy doing? Everybody's working in a sort of a melee, but looks like they're passing post it notes to each other. And I don't know what they were doing, but I'm pretty sure we frown upon today. Mhmm.

But I do remember getting in my car and following his courier, and he would drive from Palm Beach to Broward. And I don't ever think he went to Miami, Dade County, but I followed him all down to Broward. I I thought for sure I'm gonna get a ticket, and I was like, it's gonna be worth it. I'm finding out what's going on. Mhmm.

And, yeah, that was really how I learned a lot of what was going on and just wasn't kind of blown away by this tiny little niche section of the industry.

Steve: What did you find out about that guy?

Stu: He was funding just about everybody in two counties.

Steve: He was he was bringing the money.

Stu: He was bringing the money. He was

Steve: riding a motorcycle?

Stu: Well, the courier was. No. He was, he was, standing, at the head of the table, I think, in in Palm Beach.

Steve: Really?

Stu: Yeah. And and and he was funding most of that crowd that were buying houses there and funding down in Broward County as well.

Steve: Wow. Okay. So you were doing business down there. Was that the core function of your business at that time, or what other responsibilities did you have?

Stu: That was it. And and and there was really no guidance. It was just do what you can as much as you can. Mhmm. And, that was fine.

Yeah. I was having a great time. I was in Florida. You take any English boy off the beach of a you know, and put off a gray miserable island, and you put him on the beach in Miami. And it'll be ear to ear.

And I was. So I was just having a great time learning and, fascinated by it all.

Steve: Alright. And that's when you got a chance to meet Oliver? Yeah.

Stu: And then Ollie I don't know exactly what year, but around that time. Yeah.

Steve: Yeah. And, And, you know, someone that we miss a lot. Someone that was on the show. One of the first years

Stu: Oliver's on who?

Steve: One of the first years we were on we had real estate disruptors. Oliver was on the show. Right? I remember he reached out to me. He's like, hey.

I wanna be on your show. I was like, I don't know who you are. And he's like, here's what we do. Here's, like, holy crap. Right?

Stu: I I knew Ollie for a long time. You know, I teased each other an awful lot Mhmm. An awful long time. He's a good guy. I liked Ollie a lot.

Yeah. And I think he was another one of these ones. He didn't know the size of his organization. Mm-mm. He didn't talk about it.

Steve: He wasn't on social media. As a matter of fact, we have regular phone calls. He's like, should I, like, go on social media and, like, post cashier's checks? Is this how I should be recruiting?

Stu: Heck no. You should've said heck no. I, I the only thing I saw about Ollie was in on another jet flying to another place and skiing. Love to ski.

Steve: Mhmm. Love skiing. Loves being on the mountain, hiking, something.

Stu: Yep.

Steve: Alright. Yep. Okay. So then, any wild stories before you left to go do your own thing?

Stu: Really?

Steve: Yeah. No. So then when did you decide to launch your own thing?

Stu: 2008.

Steve: 2008.

Stu: Yeah. I mean, the ripples have been felt. Alright.

Steve: And 2008. So, I mean, I I I started in 2007, and it was an unpleasant time.

Stu: Yeah. I mean, I think if you'd if you were in probably a Phoenix or Miami, you probably started to feel weird stuff in 2006. Mhmm. And, I know I did. Yeah.

But it started to become rather glaring.

Steve: Were you in Miami?

Stu: Yeah. I I think I moved to Texas 2006, 2007. I mean, literally right at the end.

Steve: Because, what was, for me, the most memorable about Miami was they overbuilt a lot of condos.

Stu: Yes.

Steve: Yeah. Right? So, like, the Phoenix, everyone's moving from California or all these California was just buying all these houses, waiting for the new construction to be done, and then selling it. Right? That was that was the speculating

Stu: Same in Miami.

Steve: In Arizona. Yeah. But, yeah, Miami really took it extra with with the condos.

Stu: They really went the whole the whole gam I mean, it was all in on that. Yeah. It was it was it was a lot of crazy stuff back then. And, yeah, I wanna say it really was 2006 where, you know, like, a cartoon question mark appears over the head. You know?

That doesn't sound right. Yeah. That's not supposed to happen. Mhmm. And, yeah, I'd made the decision already that I was gonna, leave, leave Florida and and and head to greener pastures or at least what I perceived to be green.

Steve: Right. Which is Dallas. Which is Dallas. Very different than my Yeah.

Stu: I didn't enjoy it. I had come off my beach and and found myself in Downtown Dallas, which still to this day is not my speed. Not so it's not a great city, but it's not for me. Mhmm. I'm on the other side of town.

But, yeah, it was very difficult. It was a real shock.

Steve: How did you decide on Dallas?

Stu: There were many things. In Florida, there was no such thing as cash flow. Mhmm. And I remember doing a little bit of reconnaissance and finding you actually could buy houses in Texas that genuinely did cash flow.

Steve: Right.

Stu: And that was Different. Strange concept. New idea. Yeah. There was also, a gas boom that was really going on in Texas right then.

And I'd come from Florida where if you called this is gonna sound stupid, but if you called and tried to get a reservation on Friday, you you didn't try. You got it. Mhmm. And I remember trying to get into several restaurants and hotels in Dallas, and they were like, no. We're sold out.

I remember thinking that that that that's different. Mhmm. And, you know, it was noticeable the economy was still doing rather well there. Laws were very favorable. Mhmm.

Issues that were bunging up Florida, very long foreclosure timeline

Steve: Oh, yeah.

Stu: Things like that did not have the same impact in Texas. Mhmm. And then you had this gas boom that was going on at the same time. So it seemed to have this pretty glaring and obvious opportunity Mhmm. In the form of foreclosures and prices dropping significantly.

Mhmm. But you also had this robust economy

Steve: Yeah.

Stu: From under the ground that was helping to keep it afloat. And that additional liquidity that Texas maintained Right. Throughout that section of time, I think is what put Texas right back on the on the map.

Steve: Gotcha. Yeah. Fond memories of Dallas. For me, I would I had gone there, I wanna say, twice, during the REO days because when that's where the REO expos were.

Stu: Right? One of the craziest conferences I ever went to what was it called? DS News. Was it was that it?

Steve: There's, there's Distressed News. DS News, but there was also another one. But yeah.

Stu: It was a monster one that the Hilton Amatol. You ever go to that one?

Steve: I don't remember one.

Stu: I don't remember ever going to a real estate conference that was that crazy Mhmm. Where you had banks and REO agents. It was like being at the, commodities. Yeah. You know, screaming your bid Mhmm.

To try to get it stamped and people just basically queuing up to get lists of REOs Mhmm. And and, like, really sort of people that today you and I can never meet at the front just say, give me your number. Take the assets. Take the assets. It was crazy.

Steve: Well, that was me. Right? That was me going out to all the asset managers and, like, begging for business. Right?

Stu: Like It was incredible.

Steve: Yeah. So I I didn't what was the word? I was not one of the many that would harass the asset managers. I was one of the many that would be like, hey. Can I get your number?

I'll talk to you later. And then they would just get bombarded. Oh. And then I would just talk to them later.

Stu: They got mauled. If they dared to step off the stage Yeah. You know, you might lose them. Yeah. It was like a like a rock concert or something crazy.

Steve: Exactly. Well, it's not that different for me when I went to IMN. I saw you there again. Yeah. When I went to IMN, it brought me back to the REO conferences.

Right? The the the banker walks off the stage, and all these realtors just harass them. And then we go to IMN, right, which was I can't remember. Was it international multifamily network?

Stu: It's it's actually different. No. It's it's a different name, but it basically hosts, like, the SFR. They have multifamily. They have all kinds of subsections of of real estate involved in

Steve: it. Yeah. But now you got these guys like, yeah. You know, we have a portfolio this big. We're buying this many properties, and they get off the stage, and all these investors jump like, it took me right back to the REO days.

Stu: Yeah. It it it got like that for a minute. I've never seen anything like the big, DS News ones. Those ones were insane. Yeah.

I mean, it was I don't know whether anybody listened to anything, and I'm not even sure that people got to finish what they were talking about before people were clambering to get on the stage. Like I

Steve: mean, it's kinda like a zombie movie. Right?

Stu: It was like a

Steve: zombie movie. Like, you had to you had to attack that person because if you didn't get there, they're gonna be out of business cards before you got there.

Stu: And and, again, the names. I remember, the CEO of Blackstone Mhmm. Actually being and and, you know, within arms reach. And I know that he flagged down numerous people from in around the, DFW Mhmm. And recruited them for other platforms that he was building out.

I mean, it was you got face to face with the, with the, upper ups, at that event. No doubt. It was I've never experienced anything like those of those conferences. Nothing.

Steve: Yeah. Well, I mean, they might be coming around again soon. Who knows? So you found it. So talk to me about the how it was, the early days of of New Western?

Because how big you are today, did you even fathom where you are back then?

Stu: I mean, I think I think it's fair to say everyone always had big ideas and, you know, you gotta have that sort of concept of where you wanna go. So is this do we think it was gonna turn out like this? No. I don't think so, but I couldn't certainly say that we'd hoped and expected to to have a big outcome. Yeah?

Steve: Yeah. I mean, when I started this podcast, it was like, man, it'd be pretty cool if people listen to it. We're able to create an impact, you know, create relationships and and create millionaires. When I started my brokerage, it was a very similar thing. Like, I want to be able to give homeowners the experience they deserve because there are a lot of really lousy realtors.

So, like, you know, give them a good house buying experience. Give them a good home selling experience. Right? That that was the vision when we started studying homes realty, which, of course, you know, today no longer exists. But that was the vision when we started it.

Did you have, like, a mission? Like, we we were gonna, we will fight on this hill. This is what we demand.

Stu: No. I don't I don't think that was it. One thing that we knew was we had no investors. We had no real money, honestly. And, but I knew that everything was so broken Mhmm.

That getting into a new territory in a very, very fractured market Mhmm. Was gonna be easy. So so I I don't know whether the what we envisioned is is today, but I do know that we knew we were gonna try to put new roots Mhmm. As often as we could, as quick as we could, and push pretty hard, especially considering the amount of resources that were available at that stage. So the plan was to to grow.

It morphed into something else. Mhmm. Where the vision, the goal, the idea, was formed by what we'd experienced or what was happening in the industry. Mhmm. And and that continues to be the case.

Did you

Steve: know you're gonna expand past Texas?

Stu: Yes. Absolutely.

Steve: Because that was a plan from Denmark.

Stu: That was a plan from Denmark.

Steve: Gotcha. Okay.

Stu: Within reason again. You know, you're hoping in one hand and you're watching the conference in the other. Right.

Steve: So yeah. When did you, what were some earlier challenges in in that journey?

Stu: Our original office was a challenge. It was awful. And there were so many challenges. Understanding what you could and how to behave, what was the right way, explaining this new model, this concept, disrupting you know, when you go into any 2008 and prior to that, if you were in this very new space as we already talked about, the walls were pretty high. Mhmm.

And people didn't accept you and warmly embrace this at all. Right. And I remember when we were in DFW, there were four or five, you know, large players that have been around for a long time Mhmm. That wanted us don't know what the right way of describing this is. Gone?

Well, we they wanted they wanted us to pay our dues. Mhmm. And, again, I think we were just young and stupid, and and we didn't really feel like we needed to pay anybody any dues. And I would have gone about that slightly differently looking back on the things. But

Steve: How would you have done it differently?

Stu: I think probably it's better to, we were just very, very aggressive.

Steve: Yeah.

Stu: And and probably it didn't expedite anything. No. I don't think it hindered us on the same token, but but hindsight is twenty twenty. So so, yeah, there there were there were some bigger people that ran for a long time, and we didn't play by their rules. Mhmm.

And, yeah, I would probably handle that a little differently. Yeah.

Steve: Well, you know, talking about, like, people that have a a hold on the industry, one of the things that you hear about when you get into the business, at least I did when I first started, was there's this good old boys network. And the good old boys network did not want you to win. As a matter of fact, they would overpay on properties just to make sure you didn't get any wins.

Stu: We we definitely experienced that. Yeah. And that's what, you know, I was kinda referring to. But on the same token, 2008 has a awful lot of property.

Steve: Yeah.

Stu: And, you know, you could easily we were very agile. Mhmm. And the good old boys may not have been in the twilight of the but they probably weren't the twilight of their career rather than being the start of it. Mhmm. So I think that gave us a little bit of an edge as well.

But, again, I'm pretty sure I would have handled it differently Mhmm. Today to how we handled it then.

Steve: Yeah. What surprised you in that journey in starting in starting New Western?

Stu: I think there were constant surprises. Before coming to Texas, I had never really worked with realtors. Mhmm. Well, not realtors performing a realtor function. Mhmm.

Coming to Texas, my first experience of working with REOs and and lots of realtors was shocking to say the least, I would say. So So so that's the one that would really stick out in my mind just in absolute shock.

Steve: Shock as in how amazing they were?

Stu: I mean, honestly, it was, you know, you felt like I I felt like I didn't know. Mhmm. Like I was missing something. Like, I hadn't got some script or I'd missed some piece of news Mhmm. Because it didn't add up.

I I didn't experience many good ones. Mhmm. I guess, is what I'm trying to say. Not to say there aren't plenty of good ones out there.

Steve: I think there are a lot of

Stu: good ones. But also, I think it's yeah. Just to backfill off because I'm a little older now, and I don't do the 2018 again. No. There were lots of good ones.

There really were lots of good ones, and the industry was changing, and it was overwhelming with the amount of inventory that was coming through. But but there was a vast number that were were really shouldn't have been doing what they were doing, and that's probably still true today.

Steve: Yeah. I mean, that was my experience as well. Like, one of the most aggravating things was trying to buy an REO property, and the realtor never returned your call.

Stu: Well, this this was what this is how what we got going. That was it. You could send out a 100 offers and never hear back on one not to say that you were close, not to not not to even say that they had received your offer. Yeah. Nothing at all.

And, again, I think it was a again, we just talked about the craziness that was back then. You'd never seen anything like this. The defaults were off the I mean, it was ridiculous.

Steve: Well, I mean, I think it was, a lot of incompetence. Right? And I wonder how much I don't know. Maybe it wouldn't have made a difference. But the they're not returning calls, they're not knowing not confirming receive your offer, not saying, hey.

Here if you can come up 5,000, it's yours. None. There's nothing to that.

Stu: There there really wasn't. Mhmm. You know, there was nothing like that. But that also allowed the concept of the marketplace to form in our heads

Steve: Mhmm.

Stu: Because, you were able to acquire these things. And and and when we started these out, we actually sort of had already formed I had already formed relationships with asset managers that were sort of one the people that you were referring to, do you know, and and the likes? And so I just went straight to them Mhmm. And acquired units.

Steve: Right.

Stu: And and the realtors would call and say, who are you? Mhmm. Ridiculous accent. What's going on? And and it's, I submitted these to you.

You'd never responded. This is what's happened. And and the shock from that but also the fact that when we went to sell these things, it was first come, first served. It was this price. Steve, if you want this, this is the price.

You don't have to run around. You don't have to wait for me to get back. Mhmm. And and then that sort of shaped a lot of the way that we

Steve: do

Stu: our business because, you know, we when we started, the our business was right behind Texas Instruments. A lot of people taking money out of the stock market. A lot of people with retirement accounts. And even though you heard lots of people didn't wanna be anything to do with real estate, I'm not sure that that was necessarily true. Mhmm.

I think there was a wave of people that did, but they couldn't get their hands on them.

Steve: Right.

Stu: And I think that what we did is we just said, hey. Do you want this? And if this is the price, and you can have it now, you don't have to worry about waiting to get told we're going to highest and best or or just never hearing anything at all, which was always usually the case. And I think that that was refreshing for people that wanted to do it.

Steve: So from the get go, you were able to separate yourself by providing good a good experience for a buyer.

Stu: I I think that was more luck than judgment. It just happened that way. We had this inventory, and we just you could speak to us. Mhmm. Speak to me.

Right. And I could say, it's yours for 50,000. Just send me the contract. Mhmm. Meet me and give me the the down payment, and we're good to go.

Yeah. And that was just so unique. And so, again, a lot of these guys that were coming out of this big company that had their retirement accounts, had just been murdered in the stock market, that had cash on the side. They just said, I'll see you at lunch. And they come and you get five people that will sign a deal at lunchtime and then go back to work, and it was like, oh.

Steve: I mean, I can say for sure again living in that world because I eventually became an REO agent myself later on. Like, I hated that experience. Whenever I had a buyer that wanna look at REO properties, like, oh. Can we look at something else? It's like, do I wanna show this REO property while I get zero feedback, or do you wanna show this short sale property that's gonna take a year to get approved?

Stu: Yeah.

Steve: Right? Have there been an option that, oh, there's this other guy with inventory where he's gonna return your call, and I don't have to wait twelve months. That's attractive.

Stu: It was then. And and and, again, that was not I'd like to say that was really you know, we'd planned this out and it was judgment. That wasn't that wasn't the case at all. Yeah. It just happened.

First time we actually did, I I remember doing a major showing. I remember going out and, thinking there must be a carnival because I couldn't park my car anywhere near this piece of inventory we had. And as I walked closer and closer to this house, ruining the date and the time that we'd set up to do this test this concept Mhmm. I realized they were all at the house. This is just like a little 25, 35,000 square dollar house, $25,000 house.

Mhmm. And we were overwhelmed with people. Yeah. It was just it was rather clear.

Steve: Yeah. And that was the thing that was always fascinating to me for for me as well, like, while I was going through that time was that the news is terrible. The markets crashed. Nobody's buying. But that couldn't be any further from the truth.

Stu: It was not true at all.

Steve: There were so many people buying.

Stu: There there there's a lot of variations of these kinds of things Yeah. News that aren't really true. There was a lot of people buying. There was a huge amount of demand. Mhmm.

It was just how that demand was managed and how that demand was channeled and funneled. Mhmm. So so that was just not the case at all.

Steve: Right.

Stu: And it's easy to believe.

Steve: It's it sounds reasonable.

Stu: It sounds reasonable.

Steve: But not if you're actually in the business.

Stu: But it actually wasn't the case. No. There was I mean, there was a reason they weren't returning your calls, and and a lot of them were just social butterflies, but it was also because of the amount of offers that were pouring in, whether they were at least or not, whether it was a slower to respond asset manager. No. There was demand.

There was lots of demand. That was that was, an urban myth or a media driven. It it just wasn't the case.

Steve: Definitely a media driven narrative.

Stu: Yeah.

Steve: So, one thing that's different about you than most operators is that in your organization, you have to be licensed.

Stu: Yes.

Steve: Why is that important?

Stu: You mentioned the word wholesale earlier, which we'll probably touch on later. Yeah. I think it's important to be part of the industry that you're part of. Mhmm. And, and so from and also back in 2008, you know, a lot of inventory was coming from Mario.

Mhmm. So it felt important to be a part of the industry, and and you wanna have a voice rather than being told, I suppose. So that decision was made very early. Mhmm. And and that's just that's just our feeling on that.

I I think in today's day and age, you have to be licensed. Yeah. Well But that's maybe another conversation.

Steve: Yeah. Well, that's gonna happen one way or another. So, did you have, like, success right out of the gate, or were there, like, a lot of learning opportunities and lessons along the way?

Stu: No. We got everything wrong about five times. So so yeah. No. No.

No. I mean, it took a lot, not just in how to do the transactions, how to acquire, how to sell. It takes a long time to get business acumen, and only when you hit I don't know how old you are, but I'm pretty dusty. When when you get to a certain age, you know, you suddenly realize, okay. With age comes wisdom.

Mhmm. And, you know, when you're young, you don't really understand it, but it's absolutely the truth. So so you've learned a lot of things, not just about the transaction, just about general business, overall. And and being a niche industry as well, there's no playbook in how to do this. Yeah.

It's not like you can go and read how to rewire a a breaker box. You know? This has not often been done by many, certainly not at scale. And and and so, yeah, you're gonna occasionally grate your knee. We've done it plenty of times.

Steve: Yeah. I was just at a mastermind, last week, and what was different in this mastermind was that I was the voice of reason, which, like, should never should never be the case. Right? I'm the one that's like, well, don't do that. Don't do that.

And, you know, there are a lot of guys talking about all these things they wanted to do, and we were consistently I was consistently, like, you might wanna consider this. Hey. Have you considered this possibility? And then they do we'll just go. What was the biggest, lesson as far as the business acumen in the early stages of your business?

Stu: Failure well, pretty much from day one explaining what we were doing, that was different Mhmm. To a standard transaction was important to us. Yeah. And and I don't know there was any specific moment in time. It was just very clear.

Steve: Disclosure.

Stu: Yes. That you needed to let people know, what was going on. Now is it as detailed as it is today? No. But but we knew that right from the get go that that would be problematic.

Mhmm. And, and so we I think we did that from day one and and probably got it bigger and bigger and bigger and bigger and and developed that disclosure. Yeah. Over the the years.

Steve: When did you know that New Western was going to, like, be what you thought it was gonna be? Like, when do you know that?

Stu: Not what I that's gonna be. It's we're we're still not there. No.

Steve: It's not there? No. It's not but, like, there was a moment where you're like, okay. Like, you went off your own to start your own business. Right?

Like, was there a moment where there you were doubtful about, like, is this is my idea of new Western

Stu: going to work? Beginning, honestly, no. Mhmm. Again, young and dumb. No.

I I don't think that there was. I know that that sounds a little arrogant. It's not supposed to be. I was just young, and I just the concept of it not working, you know, I don't think it did end of it. No.

It just people always talk about how much work I mean, we used to work. Not that we don't work now, but not that we did then. Mhmm. Probably work a lot smarter now.

Steve: But Right.

Stu: I mean, the hours. And it was I loved it. We would get up, and we would work early until late every single day, Saturdays, Sundays. It didn't matter. And, yeah, I I don't know.

It's not supposed to sound arrogant, but, no. In the beginning, I I didn't have any doubts. No.

Steve: When did you expand to other cities?

Stu: After about the first year, and then every year thereafter, I guess.

Steve: Okay. So, what was your second market?

Stu: Well, we were in Dallas, and we went over to Fort Worth as memory and then and then I think went Houston and then San Antonio, Georgia. I I can't remember the order.

Steve: Yeah. But Georgia was the first out first day outside of I could

Stu: get that wrong. I think that that's right, though.

Steve: Yeah. Gotcha. Okay. Any challenges expanding to a second state?

Stu: Everything's a challenge all the time. I mean, managing one office

Steve: Right.

Stu: As compared to managing two offices, even if they're in the same city Mhmm. Is a very different game. Managing three offices all in different cities is very different. Managing across state lines, even more different and difficult.

Steve: How do you manage?

Stu: By making mistakes, I think. Yeah. Infrastructure, rebuilds, tear downs, stand ups, reps. Mhmm.

Steve: One of the I mean, you're here because you just wanted to do a check.

Stu: I just wanna hang out with you.

Steve: Oh, on top of that on top of that Yeah. You're checking a a local office. Right? What are you looking for? I mean, there's a lot of offices.

Stu: Yeah. So so there's multiple things you're looking at when you're building out these offices. You wanna make sure that the activity is right. Mhmm. KPIs, you and I have talked.

We've every event you probably go to, you hear about checking what's working here, what's working there, what's not working. I wanna hear from the team. What do you like? What don't you like? Mhmm.

I wanna hear what's the market doing. Yeah. And and and, you know, this we have another meeting coming together, that's company wide later in the year, and I wanna be able to talk, with knowledge on multiple localized areas. And I I still believe that this is a hyperlocal market Yeah. Dynamic.

I think there are some activities that can be nationwide, but as of today, I still think it's a hyperlocal model. And, and everyone is nuanced and everyone is different.

Steve: It's pretty cool. As big as you guys are, free to take time to go in. Because, like, you look at, Sam Walton who built one of the wealthiest empires, right, in the history. And what did he like to do? He just like to fly into all the different, what were they called back then?

But all these different stores. Right? And just talk, just mingle with the people there. And that's how he knew. He didn't listen to he didn't read these BS reports.

He didn't listen to middle management. He went boots on the ground, eye to eye contact, shaking hands, and he knew better about his business than all the other CEOs.

Stu: I was in, an office yesterday, and one of the guys has got a candle. And it says, the smell of this candle smells like this meat this, meeting could have been an email. I've not you know, we went through a window specifically after COVID when there was just meeting after meeting after meeting. There is nothing like getting on the on the ground, meeting with the people, understanding the challenges. Selfishly, it's a big learning lesson for me as well.

The travel can be a bit much, especially recently. I know you've been I think you were on one getting off one as I was getting on one or I don't know. But but, yeah, we crossed in the air probably last week. It can be a bit much, but but actually getting any officers in the field is my favorite part. Is it?

Yeah. I like it the best of all the things. Again, I enjoy some strategy and and strategic things that we're trying to do. But, yeah, I like being in the field.

Steve: What do you like about being in the field?

Stu: I like the hustle. I like meeting people. Not all of them, but I like meeting most of them. I like learning what they can do. I think there's something very rewarding when you meet somebody that maybe isn't doing so great, and you suddenly find them in a short window of time when you've been working with them and they're doing great.

Yeah. And that's rewarding, so maybe it's selfish.

Steve: I don't think it's selfish. I mean, maybe it's selfish because you feel good about it, but I I think they appreciate it as well.

Stu: Well, I I yeah. I mean, but, again, I think selfish in the fact that I might be I might be hoping to help you out, but I'm making myself feel good. Yeah.

Steve: Oh, for sure. Maybe. How many members are on the, in the organization now?

Stu: How many people? It was about 800.

Steve: 800?

Stu: Yeah. And and that goes down and it goes up. So I

Steve: would expect a significantly larger number.

Stu: I'll do better.

Steve: Yeah. No. But, I mean, like, to do 15 to 20,000 deals a year, right, to move that many properties, I would expect it a larger larger body as it is an impressive number.

Stu: It's not that, this is gonna sound it would be one of the things we're trying to do is we're we're trying to do more with less. Mhmm. You don't you want as many people doing well and achieving.

Steve: Yes.

Stu: And it doesn't serve any business well to have not everybody doing well. Mhmm. So in an ideally, what we're trying to do is we're trying to provide a tech enabled team that can do more with less. Mhmm. And that that's easier said than done as a cheap words because because it's a lot, and it's a lot of different steps.

Steve: Right.

Stu: And technology doesn't always work with you, but that's the goal. So, ideally, we'd be doing twice the volume with half the people. Mhmm. Whether that's realistic or not, I'll tell you in about a year's time. Oh,

Steve: gotcha. And then, you know, I first heard about New Western in 2019 when I was in Dallas, like, my first time speaking at an event. Like because I'm a I'm a Phoenix guy. It's like, hey. What do you know about New Western?

Like, I don't know. Who are they? And they were saying, what they do is they take properties from wholesalers and sell them to buyers. So, okay. That's interesting.

He's like, yeah. We don't like them. I was like, okay. But that was, like, my experience with New Western. Come back home, keep put put my head down and working.

And one day, I get a cease and desist letter from New Western. Like, who the hell do these guys think they are? And do you do don't they know who I am? Alright. Ego gets in the way.

Alright. And all it was was I imagine you have a boilerplate document for for all the brokers that say, hey. So and so was a realtor at New Western. What they did was move properties, and we wanna be clear that they have they agreed to not do any of these activities for at least twelve months with any of their database when they joined their new brokerage. Something along those lines.

Sounds about right?

Stu: It may have been. Yeah. Yeah. So I was

Steve: like, okay. I'm not really a big fan of this new western thing now. Right? And then I meet you, but I actually don't know who you were. Right?

So I'm at Collective Genius. I joined, in 2020. So I'm at an event, and there's a member talking about a tax saving strategy, captive insurance. It was a really impressive presentation. You do this over here and this thing over here, and then all this stuff over here.

Stu: I forgot about this till you started talking about it.

Steve: Right? And then after all this, your taxes go down. Sounded wonderful. I never heard this before. It sounds great.

And then you raise your hand. You say, you might wanna reconsider that. Right? Something along the lines like, you know the IRS loves people that do calves of interest. So you remember this now?

Stu: I I yes. You jog my memory. I do remember that. Making friends again.

Steve: Yeah. But it was good. Right? Because now you're talking about, like, hey. Like, this is something you need to be aware of.

Obviously, something you've investigated.

Stu: Yeah.

Steve: Alright. But then for me, after, I was like, I asked I can't remember who it was. Maybe it was Leon, another member. It's like, who was that guy over there with the accent? I said, that's Stu.

I was like, who's Stu? And so, oh, he's the he's the one that founded New Western. I was like, Oh, that guy. I'm gonna have to talk to him. And the other thing that struck me was in that same room, in that same meeting, there was, someone was having a different situation, a a challenge, they're they're they're trying to overcome.

Stu: I think I remember that challenge as well. Is that multifamily building?

Steve: Yeah. Insurance. Yes. Yes. Yeah.

The insurance company denied the the claim. Right? It was fire damage or water damage or something. Yeah. And then you said, a, I got a guy who specializes in this.

And on top of that, if you need any help with that, I have four attorneys on payroll. And I was like, what? Why does this guy have four attorneys?

Stu: I don't remember that part, though. Yeah. I'll take your word for it.

Steve: But I was thinking, that might be a noble goal. Right? Because, like, the things that I've said on the show before is if you're not getting sued, you're not doing business. Right? Have you I imagine you've ex you you you know that feeling.

I'm I'm filming

Stu: this video for the man himself, mister Ian Ross. The guy crush is the guy's the best person in sales I've ever seen. I've invested elsewhere, and I haven't got the same results. I've gone from being a seller, making 5 k a month, to being a hybrid role, making 11 k a month, to now be four months down the the line from 5 k to on a closing opportunity, inbound, full calendar with the best opportunity, the best offer in my space. OTE is around 20 k a month from month two.

So I've gone from 5 k to 20 k. If that's not a return on your investment, I don't know what it is, man. If you're a salesperson and you don't invest in sales training, you're gonna get left behind because your job is to be better at sales, and sales training directly makes you more money.

Steve: My name is Lance McCann. I have recently switched in sessions with Ian Ross. Those conversations with Ian has made me $50,000 in the past two deals that I've had. I was able to renegotiate go back and renegotiate the original purchase price

Stu: on one deal, and

Steve: I saved $40,000 and I got another $10,000 off by other deals. Call Ian, give me

Stu: a chance. He won't be ready.

Steve: If you like what you just heard and you'd like to have similar types of results, similar success, text close, c 0 s e, to 33777, and we'll see if you qualify to join Advanced Sales Mastery. We are taking people from good to great that feeling.

Stu: Yeah. I I I would go completely other way, though. I mean, ideally, you wouldn't have any on stuff. I think

Steve: Ideally. Ideally. But I'm a handshake guy. Ideally, we wouldn't have any contracts.

Stu: The the business that we're in, there's not many like you. Right. The business that we're in is evolving so far, so rapidly. There is so much pressure at just about every level, whether it's the lending, whether it's how properties are bought and sold, however, whether it's a commission, whether it's click, anything. Mhmm.

Any one of these different things. And, and I think probably the only group left in The United States that still will try to go to trial are the +1 800 call me now lawyers. Mhmm. And, Billboard. And and Yeah.

And and so, yeah, we we learned fairly early on that, you know, you gotta protect yourself at all times.

Steve: Right. Are you getting what was it? I think, they were saying, what was, who's the Virgin Airlines guy? Brandon? Sir Richard Branson.

Stu: Yes. Ah, yes.

Steve: Right. And I think they said he's, at all times, has because of how many companies he has. There's something like 400 active lawsuits at all times. That doesn't surprise me. Yeah.

Are you anywhere near there?

Stu: Not near 400. But, oh, yeah. We always have there's always there's always lawsuits going on all the time on on all kinds of different things. And, it's just part of the business, unfortunately.

Steve: Yeah. Now the other question again was, why is a guy who's doing that many deals inside Collective Genius? Collective Genius is an amazing, amazing mastermind. I owe a lot of my success for being inside of it. But I was curious still curious.

What are you doing in there?

Stu: I don't know, but I think Liam and Jason should probably start, like, throwing me some spits because a lot of people have signed up that I used to work with, and they want to join in. It's a great group, man. I really enjoy it. Again, I think it's a little selfish on my end. Mhmm.

I definitely don't go for the same reasons that a lot of other people go. I really enjoy the groups. I enjoy learning. There are things that I don't get these days Mhmm. For good or for bad Right.

That I I can learn from in in those groups, in those sessions. And and, again, there's often some interesting ideas in there. There's some things that I'm not excited about that that happened in there. But, again, I think it's very easy to drift into this la la land.

Steve: Right.

Stu: And, you need to stay rooted. Mhmm. So, yeah, I think my my reasoning is different. I enjoy the group. I enjoy the camaraderie.

But but I do go more to keep myself up to date with what's going on. Mhmm. I don't I don't get a huge learning impact, but I do get lots of other really nice byproducts, and I like the group and like meeting people. I enjoy Leon and Jason enormously. Mhmm.

So, yeah, I I plan on continuing to go, and I continue to enjoy it.

Steve: Yeah. I appreciate Jason. Leon is like, whatever. But Jason is good. He's

Stu: so tall.

Steve: And then you, I remember there's a big presentation you gave. I don't remember what year it was. But it was something along the lines, like, we as an industry need to stop screwing around.

Stu: Right? We can take the whole podcast with this if you want.

Steve: Yeah. Let's let's go for it.

Stu: I've gotta think about how I approach this.

Steve: Sure.

Stu: And I guess I'll just go straight in there. Yeah. You mentioned the word wholesale before.

Steve: Mhmm.

Stu: I don't like that word, and it's not because I don't specifically I haven't got an issue with the word wholesale. Mhmm. But, but there's probably a number of bad act there are a number of bad actors out there Right. That do nothing but I think cast a very large shadow Mhmm. Over this industry.

And, I think that that word is synonymous with particularly that section of the industry.

Steve: Right.

Stu: And you're not always gonna get every business practice right all the time. And, frankly, you know, I spent a lot of time around reading the law because of situations that you've highlighted before and trying to understand, and there's a lot of gaps in it. Mhmm. And it's just not clear. And you can call and ask for answers, and you won't get it.

And so sometimes you've gotta make judgment calls, and sometimes you make a wrong judgment call. Mhmm. But there's a lot of people that know what they're doing. Mhmm. It's just simply not correct.

Mhmm. And I think that they push forward or they justify it somehow. And, that tag wholesaler is used so much on social media. And, you know, I look at a guy dressed like a rodeo clown or or something like that that's whooping around on the stage. Yeah.

And I do have issue with it. I don't think it looks good on us, and and I don't think that anyone that's in investment real estate Mhmm. At some stage, everyone's gonna get tired of it. Everyone's gonna get dragged in for somebody else's behavior, and and you're gonna get tired with the same brush. And I think that at some stage, we've gotta say, okay.

I think that I don't wanna be associated with that.

Steve: Right.

Stu: I think we're at that stage now.

Steve: What are some of the most egregious things you're seeing that are gonna get us all into trouble as an industry?

Stu: There was a change in, this is just one example.

Steve: Sure.

Stu: There's there's a lot of them out there, and almost everybody will know what we're talking about. And nobody's perfect. I'm sure that I got agents and and people that are doing things. So I'm not trying to say that we get it right every time. Not at all.

But but there are some people out there that I think go out of their way. So so there was a change in law in South Carolina. I think it's probably well documented, and there are different opinions. And I have mine, and I know that they're different to some. But there was a thread that I was reading in which a guy said I just got a letter from the state, and it was saying not to behave in a certain way.

Mhmm. And then the next five or six comments were just like, screw it up, throw it in the trash, carry on, they'll never come for you. And I just was in shock.

Steve: Wow. That was the advice.

Stu: That was the advice? Somebody's finally stepped in and said, I don't know who these people are, but you you can't listen to that sort of advice. And, you know, I don't know what we're supposed to do

Steve: with that. Advice on Facebook.

Stu: Come get it here. You know, again, stuff like that. Mhmm. It's just you know, that's on social media. Mhmm.

That's gonna live forever. And Put your

Steve: name on it.

Stu: And and, yeah, and you just tagged it. And and, again, if that's the mentality of I don't know how many comments now. Again, I don't do that thing much, but, you know, that that that's not good. Mhmm. That's not the approach.

Find out what it is you did wrong. Maybe you knew what you were doing wrong and change it. I don't know. But Right. Just throwing in the trash and imagine what and everyone else just laughing about it.

Mhmm. That that's an example, but there are so many.

Steve: Do you think another one or two off top of your head?

Stu: Yeah. I mean, I think you're gonna make everybody just hate me or something. I I you know, there's lots of instances out there. There's lots of different approaches to do real estate. Let's just stick with the one we've already discussed.

I think if you're doing a certain behavior, you should disclose what you're doing. Mhmm. And if you're worried about disclosing it, then you shouldn't do it. Right. And if you think that your disclosure is gonna stop you from being able to do it Mhmm.

Then you shouldn't do it. Yeah. And I don't that that would be one right there. I can just go with that one.

Steve: It's pretty good rules of thumb.

Stu: And and and yeah. So so that would be

Steve: Yeah. We have, Jerry Noren. He's been on the show a couple of times. And one of the things that we talked about because he's also, a licensed real estate agent, was a broker owner. I'm a licensed real estate agent.

I was a broker owner. And the things we've talked about is, like, when someone says don't go get your real estate license, that just increases your risk. The answer that we both ponder

Stu: The last few words of what you said. Yeah. Increases my risk? Yeah. What are you suggesting?

I agree with what you're saying. Yeah. Yeah. Like, that's that that should immediately bring it into frame what we're discussing. Right.

Like, if you have already got a risk that you're trying to hide in the shadows Mhmm. With, and you worry about getting license, it's gonna just make you more of a target, then you've already got the problem.

Steve: Right.

Stu: And and, you know, not everybody. I I I'm not trying to say everybody.

Steve: Well, but the point is that there's always a few bad apples that spoil it Yeah. Right for everybody else. And that's basically the message. It's like, hey. Like, no one's saying don't wholesale.

But if you're gonna wholesale, don't do things egregiously when you know you can get in trouble.

Stu: Yeah. And and you don't always know. And, again, I was trying to make I

Steve: was saying I was saying intentionally earlier. Like, intentionally.

Stu: Didn't know, and it's it's not always to understand and interpret the law. Mhmm. But when you intentionally know yeah. And and there's there's too many people

Steve: doing that. Right. So I had to honor, a couple weeks ago to, we had an event. Chris Iman was on a show a month or two ago, big player here in the Phoenix market. He was hearing murmurs that wholesale was gonna get regulated in Phoenix.

So he has this bright idea. Why don't we just bring the real estate commissioner into my real estate investor association event, and then let's have a conversation about it. Brilliant. Right? And so I'm standing in the back of the room, and I'm listening to her talk.

And which as she was speaking and personally, I already disliked her before, like, I even met her because she's already cost me money in in other things. Yeah. But as she's speaking, she was saying, I don't know why they asked me to become the commissioner. I'm like the last person they should ask. I come from a family whose wealth was created from real estate investing or not I I'm not real quote, unquote, realtor friendly.

I'm like a real estate investor sitting there. And so then they started asking questions. What are you looking for? What are you opposed to? And she says, I have zero problems with wholesaling.

I think wholesaling is totally fine. Here are my three problems. If you guys could not do these three things, there won't be any problems. And if you have friends doing these things, maybe slap them upside the head and ask them to stop doing these three things.

Stu: I know.

Steve: First, the contracting properties when there is zero chance you will ever close on it.

Stu: Sounds like a great one to start with.

Steve: Right? And I think that's was it fraud by deceit or it's it's whatever. But it's it's clearly an immaterial fact Uh-huh. To a contract. Because if you're contracting properties

Stu: If you don't have the money to buy it Mhmm. Don't put it on the contract.

Steve: Or know someone, like, have the that can fund it. Right? If you have a hard money lender, something. Yep.

Stu: But if

Steve: you have zero intention to ever close on it, that's fraud. I echo that. And she she will forward your contact info to the attorney general. She says that's not a real estate problem. That is a criminal activity, and and she just forwards all those complaints to the attorney general.

Stu: Okay.

Steve: Second, if you contract the property and you don't close on it, and you refuse to release your memorandum, now you've put the homeowner in a in a bind that they don't deserve to

Stu: be in.

Steve: Because you promised to buy it for, say, for example, 200,000

Stu: Mhmm. And

Steve: you wanna do a price drop to $1.60, and homeowner says no, you have an obligation to close at 200,000. Seller's unwillingness to lower the price is not their problem. It's your problem. And, again, that's not a real estate thing. She redirects you to the attorney general.

Again, sounds reasonable. Sounds reasonable. And the third one, I don't agree with, but she's the commissioner, so she has a stronger voice Yeah. Yeah. Is, she believes sub two is a problem.

She thinks that if you are, what's the word, the moment you buy a property, buyer and seller have an obligation to notify the mortgage company immediately. And she says failure to disclose that is a violation of the due on sale clause. I

Stu: agree with her.

Steve: Alright. So on that one, I didn't agree with her.

Stu: I think that I think that that is actually written into,

Steve: Is that written into the mortgage?

Stu: Yeah. It's in there. There's a lot of clauses. That you agreed to it, to do that. However

Steve: I need I might need to look at it again. I

Stu: haven't looked at it for

Steve: a long time.

Stu: It's been years since I looked at it too. Yeah. But I believe that that language is in there. Mhmm. However, if you do mail that letter off Mhmm.

And disclose Mhmm. I'm not aware of one person in The US. In fact, I'm aware of, like, very few cases. I think it's less than a handful Mhmm. Where they have called that note due.

Really? So so that was what I found. Again, it's been a long time, but

Steve: I looked into this

Stu: thing for disclosing. Yeah. That was kinda what I was trying to but, yeah, I I am aware that when you sign on that dotted line, I believe that you do say, hey. I will acknowledge and I will, let you know.

Steve: Right.

Stu: If you have you ever done a hard money loan?

Steve: Yes.

Stu: Would you like to know if somebody did something like that to you?

Steve: You mean as a lender? Yeah. Oh, no. I haven't done it on the lending side.

Stu: Okay. Again, I think if you were a hard money lender and you did that and someone did something like that to you Mhmm. And completely changed the documents, I think you'd wanna know. If I let you know Mhmm. And put you on notice, I'll let you know.

Steve: You've done your part.

Stu: I've done my part. Right. So so I looked into and and, again, this is probably yeah. It's it's it's probably more than a decade ago when I looked into this because it was a fascinating subject. But I am I'll go ahead and say I'm a 100 that that documentation, that language is written into the paperwork.

Steve: Well, I will sit here and tell you I've never studied it.

Stu: I I I I did, but, again, it's been a long time ago.

Steve: I am aware of a due on sale clause as a paragraph. Right? You got the black bold font, due on sale clause. And And my understanding was they reserve the rights when it changes hands.

Stu: Yeah. And and and, you know Yeah. You can balance it. Sure. And and But I'm with you.

Steve: If it says you must disclose, then you must disclose. I just don't remember it saying I must disclose, but I'm not a big sub two guy either.

Stu: I'm not a huge sub two guy, and and there were many reasons why, but this was one of the main reasons why we never sort of did it. And because we wanted to really focus on what we were doing. But but I think they're there. You will find a lot of that when you're signing on the line. I think that there is language that suggests that that that

Steve: So you're okay with her positions?

Stu: I'm okay with her positions. Yeah.

Steve: Yeah. And so when you're saying stop monkeying around, like, that is kinda what you're referring to.

Stu: Yeah. Examples of things like that. You know, when it's really obvious. Most of those were pretty obvious. Mhmm.

If you didn't close on the deal, I understand the use of memorandums, and and if if there was a fault on your end, it seems fairly obvious. No?

Steve: Yeah. I mean, I've got no issues with memorandums. If they change their mind, we sign a legal agreement.

Stu: Yeah.

Steve: But if you can't honor the contract, like, what are you doing?

Stu: What are you doing? And and a lot of those are kinda like that. When you we start looking at it, it's kinda like, Carly, what were you doing? Yeah. Like, in what world are we justifying this?

Yeah. But but, yeah, most of them are really obvious. Mhmm. But, yeah, that's that's why I have a bit of a problem with that word. Not because I necessarily disagree with it, don't like the word.

Just because I think of a lot of things that are associated with that. Right.

Steve: And the people that are screaming about it.

Stu: Yeah.

Steve: Right. And then, hard money, you have a similar feeling.

Stu: Same thing. I think I'd like to think that we were one of the ones that that really took this, and then there's a number of people at private lending associations around The US that have popped up that have also said this word. Have you ever looked at what hard money is?

Steve: I mean It's

Stu: a political donation. Is it? Yeah. That's what it means. That's the definition in in one of the Webster or whatever it might be.

Mhmm. It's not even you say hard money to me. Mhmm. And I think of a smoky room with mirrors, person that you never meet, speaking in a deep voice. Mhmm.

Steve: You know? X Files stuff. Yeah.

Stu: It's not it's not it's not connotation is not good. It's unnecessary. Mhmm. That section of the industry, I think, has been cleaned up rather nicely. Right.

And you see it it's, you know, the sure. Don't be wrong. Localized, you'll see people saying, hey. This is a hard money lender. But I think on the bigger picture, on the bigger stage, I I think you'll find most people call them fix and flip loans now.

Mhmm. Institutionally, they're known as fix and, suddenly, that's cleaned up.

Steve: Right.

Stu: Just because you took this name Mhmm. And you put fix and flip loans, and now, apparently, you can securitize them.

Steve: Yeah.

Stu: Right. So so I'm just saying there's no real difference between these things. Mhmm.

Steve: But the the connotation, the image that comes along with

Stu: Yeah. The the what you conjure up in your mind around these these these terms that have been sort of misappropriated or or consumed by Yeah. An actual two that that isn't great. Yeah. I I don't like it for those reasons.

Steve: Yeah. I mean, now that you mentioned it, when you're asking, like, what do I think of? I mean, it's like, if I really had to think about it, I'm thinking of, like, you know, a loan shark. Yeah. There you

Stu: go.

Steve: I'm thinking, like, if I don't pay

Stu: This guy is happy to take the house back. Again, little bad egg. Yeah.

Steve: Or your knees.

Stu: Yeah. Yeah. Exactly. They'll be the boys will be round with a bat and, Yeah.

Steve: This afternoon.

Stu: Yeah. Yeah. Again and I again, I think for for and that's largely partly because not not large largely because institutions and and and and securitizations and people that wanted to get involved in that have have gone a long way to try to change that. But it's something we push for a long time, and then it was carried on by numerous people that have sort of worked into that big secondary market now.

Steve: How I guess going back to, the the hard money loans. I mean, the securitization of it is a newer thing. Right? Was it, Kiavy got bought was it two years ago now? Lending Home has changed hands?

Stu: Lending Home became Kiavy.

Steve: Okay.

Stu: And I think it was I'm not aware of being bought. I think it was No.

Steve: No. It's Anchor. Anchor was

Stu: Anchor, was acquired, and, Civic Mhmm. Was acquired. Mhmm. But, yeah, I think I think scrutinizations, there'd be many versions of it now. They're called RTLs.

Steve: What's RTL?

Stu: A residential transition loan. I think I can't I may get the middle one wrong. But, yeah. So so they gusted them up, and they retitled them. And now

Steve: As it's it's it's, what's the word? It's sterilized. It's a

Stu: It's rebranded. You know, it's for you and me, I never dealt with the knees, and the guys that were coming with the bat. But, you know, hard money, there's really not much difference. Mhmm. With that said, I think that there is also kind of a differentiation happening now.

I think in the marketplace for lending, you have got true guys that are doing hard money lending. I'm talking localized experts Mhmm. That will lend on the a deal and, you. They know Steve. They know you're a good operator.

They know what you can do. And you may not pass the underwriting that securitization type lender might want. Mhmm. So I think there is a real divergence right now, and and and you'll see out there there are some people that are just very much local experts Mhmm. Still lending in similar terms to these, institutional people, but they can get the money turned around in twenty four to forty eight hours.

Mhmm. So they offer a different and they needed to. Yeah. They offered a different value proposition. Mhmm.

I'm sure that the loans are as successful, maybe more, maybe less. I don't really know. But I think that that I don't know if you've seen that, but I see that in the marketplace now. Securitized kind of model Mhmm. Which all flow back to two or three big buyers and and and packages of these loans.

And then on the other side of the room is is is a localized guy that really knows the market very well and can provide a fix and flip loan to a good candidate in short notice.

Steve: It is fascinating. Like, me, when I started o seven, Wall Street wanted nothing to do with real estate.

Stu: No. Nothing to do with not I think the the first thing that they got into was the lending side.

Steve: Yeah. And then everything changed with Blackstone. And then, not too long ago, you were doing a presentation. You were asked to speak about how you find buyers. Because, obviously, with New Western, my understanding of the business model so you correct me if I'm wrong.

My understanding of business model is you guys are really good at finding people that have contracted a property with a home or direct to seller one way or another, whether a realtor or or or a wholesaler. Right? And then you're good at creating these relationships and then moving these properties to an end buyer that makes sense.

Stu: Yeah. I I I don't necessarily agree. I understand that that is the perception. It doesn't matter what I can say. People

Steve: Oh, here's your chance

Stu: to fix it. That. No. I I think, we work where we can work. Mhmm.

And we have a new product director to to sell a channel, and multiple brands. Mhmm. People don't know that, though. Right. And and so so I I think that we we we try to fit in where we can fit in.

Mhmm. We'll expand one section of the acquisition window. We'll expand another or a different vertical and and and so it can come from anywhere. You know? Yeah.

I I always tell the story. I went to a family office one time, and, you know, family offices, incredibly wealthy people. Mhmm. And I walked out with the house. And so so there would be all kinds of different places that we can get deals from.

And if we see an opportunity, yeah, we'll go there and we'll acquire that opportunity or we'll try to expand that footprint in that section of Mhmm. Or the subsection of the acquisition. Mhmm. And the same for for Dispo. The presentation I think you were talking about, everyone's always saying, where do you get your buyers from?

And and it's the same as you. It's no different. Now do we distill our data a little differently? Yes. Do we manage our data differently?

Yes. I think we probably do. Right. But everything else is no different to anybody else, I don't think. Mhmm.

But, you know, not all data is the same. Mhmm. Everyone always says, oh, I can do this. I can watch a YouTube video and do what you do. And it's just like, can you?

I think we know that that's not the case. Because, you know, I can give you a piece of data, and I can give my by BI team, business intelligence team, the same piece of data. Mhmm. And I'll make five buys, and you'll make one.

Steve: Right.

Stu: Or, likewise, I'll make five sells, and you'll make one with the same data. And we've literally done that, and we've run those sort of tests to see what we can do. So I don't think there's any, there's no different to how anybody knows. There's no, you know, finding John Smith. Everybody finds John Smith.

It's what you do and how you control and manage and and educate and and get John Smith to the point of the sale or or buy.

Steve: And, yeah, I remember that presentation. You used these two words, which I've never heard put together until your presentation, business intelligence.

Stu: Yeah. It was all new to me. But but they've been fabulous, and and and they just tell you things that you otherwise wouldn't see. You see patterns, create algorithms, you know, tell you potentially for somebody to buy versus somebody else. Mhmm.

Just just those things are the, you know, things that that create different outcomes. Mhmm. And so, you know, again, you will hear arguments, but the reality is I'm not suggesting we don't have John Smith's number Mhmm. Or his email or, you know, whatever it is. But but knowing and understanding what John Smith's behavior is Mhmm.

His preferred financing, that stuff's all that's that's that's the secret. That's the Right. That's the source that that makes the

Steve: So you have, are they in house analysts that's studying studying the data? How how are you able to figure out what John Smith's propensity, or desires are?

Stu: Again, that's all our business intelligence group that's doing that, having a look.

Steve: Is that, like, a group within your company? It's just business intelligence.

Stu: It's our team. Yeah. Ah. So we have a whole department that's dedicated to to doing that. And I think lots of businesses do.

Mhmm.

Steve: Outside of wholesaling. Yes.

Stu: Yeah. Outside of wholesaling, that's probably fair. But but, yeah, that that that that's the difference. Yeah. And and and so there's no secret.

There's no to how we meet John Smith or how we hear about John Smith. Mhmm. All those ways are the same. Right. But, yes, having a group that starts to study data, and we've been keeping and tracking our data for an awful long time.

So you can sort of go Very

Steve: long time.

Stu: For a very long time. Yeah. Take a look at it and see and get different patterns and and and and expectations around what's gonna happen and whom. So so yeah.

Steve: You know, one of the definitions I've heard of intelligence is that who can connect the dots better. Right? With we're all looking at the same set of data. Who's better at connecting the dots, finding the patterns, seeing the patterns? That's the more intelligent person.

You have a department whose sole job is to just connect dots is what it sounds like.

Stu: Yeah. Yeah. Absolutely. Yeah.

Steve: Yeah. That's pretty tremendous business advantage.

Stu: They're tremendous people. Yeah. So so, yeah, it's been it's been it's been very good, very helpful. At the beginning, you didn't have to deal with any I mean, you weren't round like you were, but you're in different slightly functions. So maybe you were around the pie, but you weren't pecking at the pie.

So we didn't have barriers to to so so it was different then.

Steve: Right.

Stu: Again, I think that the other thing I when I speak to people, they bump into us, and they always say and I think I said this at that same conference. They always say, I could never buy a deal from you. Mhmm. And I always say, well, I don't wanna sell to you.

Steve: Right.

Stu: And they always just look at you just like, why wouldn't you wanna sell to me? And I said, because you're a professional, and you know how to buy your own deals, and I don't wanna service that client. That's not the client. And and having a distinction in who your client base is and who you're working with Mhmm. And that's important too.

And something that I think when I met groups, you guys and and and numerous other people, I think they will look to me like I was an alien. I was like, I don't wanna sell to you. Mhmm. Would not be good.

Steve: Yeah. I would never wanna sell to Eric Brewer or Frank Cava or, right, or Phil Green. Like, I'm I'm doing something wrong. I can I can maximize that a little bit more?

Stu: And and and still have somebody on the other side of that transaction that has a great transaction because their expectation is different. Their understanding of what real estate asset is. Right. I would be a great buyer Mhmm. For somebody that's bringing I'm not doing rehab Mhmm.

Personally. I've done my first year. I'm not doing it anymore. I just wanna buy it, forget it, never see it ever again, and hopefully collect your cash flow over the years. But, yeah, you've gotta find out who the expectation, what the expectation, and and who that person is.

And and and I think the distinction in your client base is lost on so many people. They think, you know, everyone's the same. Mhmm. And I think fairly early on, I think I think I'm gonna say it's probably this probably was me. The you know, I was just like, I'm not interested in that client.

And what it was, I'll tell you how I looked at a realtor that was in town that was selling deals that I was buying Mhmm. So much higher than me. And I just it was the same asset. And I would go out and look at these things, and they were dumped. She was selling really beat down houses.

I was selling beat down houses, you know, zombie houses. Right. And I just could not understand. And her clients were stoked, happy, happy Mhmm. Because they didn't wanna do anything.

They just wanted to buy this thing, get it stirred up, and get it rented out and never see it again. Mhmm. That's my client. Alright. Me.

I don't wanna see it. I don't wanna know about it. We have to have more than five conversations. We've already wasted. I'm I'm out.

You know? And that was sort of so, again, that distinction and that that that sort of carving up of who you're buying and who you're selling, is important.

Steve: Yeah. And another thing that I thought was interesting was that you you mentioned that you had expanded to multiple markets in the meantime. Like, the rest of the industry like, 2022 was interesting. And a lot of people were like, what should I do? Downsize, let people go, cut back on marketing, whatever.

And that was the time you guys were increasing your elbow room.

Stu: Yeah. I think, strategically, we definitely slowed down. Mhmm. But strategically, yeah, we made you know, if we could if we could make a little win over here, we can make a win there, we we would do it. But at the time, if you remember when in the government, I think you and I were at, everyone was saying it's over.

Mhmm. And I think that I was pretty much the only one saying this is not the one this is not over yet. Mhmm. There's plenty of that to come, but not just yet. And so so we weren't on the same, economic cycle.

Right. I think it was, big narrator out of South, yeah, out of LA had spoken at that conference. And other people and some people are just flat out shut their businesses. I don't know if you remember when all the interest rates started going crazy. I know

Steve: there are a lot of people that shut their businesses.

Stu: Yeah. And and and, I guess, I just didn't have that belief. That wasn't my understanding of what was going on Mhmm. With the market. And so, again, it was just a different philosophy, whether it was right, whether it was wrong.

But And and different strategies were right for different people.

Steve: But there's a couple of things here. Right? I mean, I think the business intelligence probably helped. Right? You could

Stu: I I honestly yes. I'm sure. But but I I don't think anybody in our thought this is time to Mhmm. Hunker down some But

Steve: the other thing too is you were wiser with your money and that you could expand at this time. You know? You've gone through a previous crash. Mhmm. You see what happens when the market slows down just a little bit.

Stu: Yeah.

Steve: Right? Or a lot.

Stu: That goes back to the experience thing as well. I think our sold heads have been around. We've seen this, and you can see how quickly things can go upside down.

Steve: Right.

Stu: You you know, you attach a piece of debt for thirty years and you think that that's super. Except when you don't get the cash flow to cover that debt, it's not so super.

Steve: Right.

Stu: And that thirty year mortgage wants to carry on being paid long after the renters don't wanna pay.

Steve: Yes. They do.

Stu: So so, yeah, you gotta balance it. And and, again, it's gotta fit everyone. So so, yeah, we had managed ourselves, and and had and had insulated ourselves from from potential problems, I think.

Steve: How's the expansion been going?

Stu: Slow. But with that said, more more to come. Mhmm.

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Stu: So that's been a a journey. Yeah. And something that I think a lot of people in real estate are prone to is shiny objects. Mhmm. It's multifamily.

That industrial, that storage, we didn't do any of that. And and there were plenty of temptations and plenty of loud voices and knees in the back saying we should do this. We should do this. Look. There's an opportunity over here.

But we didn't do any of that for thirteen, maybe fourteen years. Mhmm. All we did was the core business. And once that was stood up and stable and and, again, there's there's a strategy and a plan of where we're trying to go. Mhmm.

We had to take a a bit of a breather. We had to add on certain aspects of the business, and those became fundamental to the bigger plan to to to where we're trying to head. Mhmm. And so, yeah, we've added on title. We've added on a loan marketplace, which is bolted onto our, software platform for our agents, and we're adding on insurance as well.

Mhmm. And and that's all available in the marketplace. But, again, it was all timing, and it had to be right, and we had to have a bunch of other infrastructure built out

Steve: Right.

Stu: Which is hard to see sometimes, especially if you're not in the machine. But that's really been the core of of what we've been doing for the last probably two years, getting the technology up to where it is just to potentially talk about tearing it down and building one that's completely proprietary and over and you know? So Yeah. Yeah. As business changes, as as as things add on when it was appropriate, we've added on other businesses.

Yeah.

Steve: What has been the biggest surprise or difficulty in, in those last few years?

Stu: I think well, we can all say that we've been great at real estate since about 2008, 2009, 2010, whenever we Yeah. Have we?

Steve: We've got at at least the market was able to cover our mistakes.

Stu: The market has been wonderful. Let's just go there. Yeah. And this has really been my thing. So so, have we been good?

Have we been great? Has the market been really nice? Tailwinds are a really nice thing. Mhmm. And often we don't even notice them.

But when you get in that jet stream and you're just flying so I think we were in a jet stream for an awful long time, and and and people were very happy with their results and what they were doing and and started to think, their stuff didn't stink. And then when you try to explain to people that have never experienced the recession, that have only known real estate to increase Mhmm. Going up and up and up, you gotta you gotta reexplain to an audience. You gotta reexplain, hey. Now you've actually got to have structure Mhmm.

Do your things, and you can't just rely on the phone to ring Right. For you to be able to do biz. So so, I would say that in all the years, for the most part, we were just right place, right time. We all did well. Good good market.

And now you gotta recalibrate sharpening your pencil. Mhmm. And and so right now, we're in the middle of of some fairly significant change that we're trying to make, which primarily was technology, but we shifted to the field. Mhmm. And so right now, going through this shift and reeducating, you know, a deep decent number of agents and people Mhmm.

It's a challenge, and there'll be a new challenge next year.

Steve: Yeah. And another one the year after that.

Stu: And and so on and so forth. That's how it is. Right? But but, yeah, in in recent memory, that that that's the one explaining to people that you're not necessarily God's gift to real estate. It's actually in control.

Steve: Just make

Stu: sure you're swimming with the, tide rather than against it. As long as you're with it, it's gonna carry you in. So so yeah. I think I think changing markets has been interesting.

Steve: But what I like about it is, you know, Gary Keller, founder of Keller Williams, he wrote a book, Shift. And, basically, the premise is, you know, when it gets hard, that's the time you increase market share. Right? Because people are leaving. Newer people don't know what's going on.

So you increase your market share. And then when the market returns, you get to reap all the benefits. Right?

Stu: Yeah. And and but it's a double edged sword. Everything is so cyclical in real estate. Mhmm. You've gotta get your timing so good.

Yeah. And if you get and I got timing wrong a bunch of times. Of recent times, the COVID stuff, it was like, I don't like this and and, you know, whether we we pulled in our lending vehicles and all the stuff. So, timing is is critical, and and fake, or not fake. Thinking that things have changed when maybe they haven't changed.

I'll give you an example. I don't think that they've got inflation under control. Mhmm. They may show up for a little while, but in the long run, I think that there's plenty of headwinds available from that, which might lead to other situations or things that we don't know about. And so, while other people are sort of saying we should dive back in after that 50, you know, bits Yeah.

Everyone was like, we're back. We're back, baby. There's another 50 coming. And then maybe I'm a little more hesitant and and, you know, maybe I shouldn't be, but but I am a little bit more hesitant, and and it's all about time. You gotta get it timed right.

Steve: Yeah. I think, Jason Medley has a great quote, which is if you worry just a little bit when the times are good, you won't have to worry a lot when the times are bad.

Stu: Yeah. And that that's fair.

Steve: Yeah. And the other thing too, and this is what it really blew me away, was that I have quarterly strategic meetings. Right? Literally, this week, Gary Harper is coming to my office. Gary and Susan, they're coming to my office, and we're having our quarterly strategic meeting.

But you don't have quarterly strategic meetings. You have them twice a month.

Stu: Frequently. And and stand ups if there needs to be more. But it's really more built around, management and execution. Mhmm. So while I'm you know, we have the big one once a year, which is multiple days.

And then you're meeting every two weeks on a Monday, to make sure that this is on track or that is on track. And I wanna be clear again. I wanna go back to that that that that candle that, you know, this this candle is smells like this meeting could have been an email. You know, if we have that, then then we cancel it. But but, yeah, it's important to have them.

Mhmm. And the check ins, the balances, communication is not easy. Mhmm. I am not a big Zoom guy.

Steve: Yeah.

Stu: It's just not my jam. Everyone's always on the phone, me included. Mhmm. But, yeah, we check-in frequently.

Steve: Yeah.

Stu: It's important to.

Steve: But what I like about that because, like, right now, what we have and so we modified a little bit courtesy of your inspiration. So it used to be we have a rock, and we have three months to get that done. And we've got, like, eight things that have a three month deadline. And what happens is we don't get those eight things done when the deadline is up because

Stu: It's exhausting.

Steve: Everything gets done in the last few weeks In the last week. Yeah. Of the quarter. Yeah. And so looking at that, it's like, oh, wait.

We can stagger these. We're allowed to stagger these objectives, initiatives.

Stu: Some of the other teams, I don't have a great corporate background, but, you know, we've got quite a few people in there that have, like, really solid corporate backgrounds right now. And, you know, building out swim lanes and time charts and everything like that to show, especially if you've got multiple projects, multiple, initiatives that are taking place that have some overlap but aren't necessarily the same like two different departments. But for example, HR and accounting in in in h in a payroll world. Those two have gotta be over able to overlap and understand, you know, who's passing the bat and at what time. Mhmm.

And if you fall behind two weeks without telling them, then they're gonna be in the holding position waiting for you to pass the baton while they sprint around the the next corner. Mhmm. And so, yeah, again, it all depends on size, scale, what you're trying to achieve, when you're trying to achieve it, and and and for the reasons. But, again, there's there's often every department's got multiple different projects going on at any one time. If it's tech, it impacts every single department across the network.

Right. And so to have a month or a three month cycle without speaking to those people is unimaginable.

Steve: Yeah. And the one thing I I I appreciate it because we and I we had a private conversation. It's like, you talked about it as a, woah. I need to learn more about this. And one thing that I was really excited about, my team was not, but I was really excited about it, is that all the department leaders are fighting for resources.

Yeah. Right? Which leads to less wasted resources. Can you talk about that?

Stu: Yeah. I I so let's go back to the the BI team or or anything, accounting like that. You know, those resources are wanted from everybody. Mhmm. You tell a field guy, I can tell you this, this, and this.

Mhmm. And the field guy's like, I want this, this, this, and that. And and so they're all hankering and trying to get at it. And all of a sudden, you've got an overwhelmed department, and it's you know, you've got not enough going on and and all of a sudden burnout, and they're not they're not hitting targets, and you don't get anything done. Mhmm.

So we've experienced that again with multiple overlaps, and you just have to tell some people this is just not it can't happen that way. There's no room for that to happen. There's no time. And, again, that's gonna upset people because you can't get something done, or they don't understand why you have to get this, in your example, rock done before you can even consider that. Right.

And and, yeah, and and so much of that is depending on the stage of the business and where you are and what you're trying to do. If you're in the early stages, probably not as important. Mhmm. But as you get on and on and on and and and more and more people are demanding on each, you know and they're getting dragged everywhere. Yeah.

You quickly and easily lose control of what's happening and what you really need to have happen.

Steve: And then, the the last thing I wanna make a point on here is, you've got a really sharp organization. Right? And part of it, a lot of it is gonna have to do with personnel. So, you know, for majority of my career, I've hired referrals or LinkedIn or Indeed. And I take somebody, pay them $40.50, $6,080,000 dollars a year, and then we level them up.

Right? I would give them access to some resources. Hey. Go talk to so and so's team. They've got some, you know, SOPs that we wanna go implement.

You just hire Wall Street people.

Stu: No. I mean, we we have. Yeah. I've been very proud to work with some guys that used to work at Invitation Homes, and and we had we've had people come from large construction companies, and and you gotta surround yourselves by people that know more, are smarter, are better. Anywhere that doesn't see that is mad, and, they bring something different.

Mhmm. I'm a I always say this. I'm an operations guy. Like, I'm in the field. I'm doing it.

You just you pointed it out.

Steve: Right.

Stu: That's what I like to do. I'm I'm the guy that doesn't wanna attend your stupid meeting. But I need that structure. I need that insight. And then and then you listen to someone, speak or or or learn from them.

That's been a a more corporate background of Blackstone company, for example, and and all these kind of people. And it is a wow. You're like, oh, heck. Mhmm. And so, again, we're lucky.

We're very fortunate. Got this dynamic thing going on where we're to attract people that are very interested in learning and understanding. And, yeah, we've been very fortunate with that. But but but, again, selfishly, I might have learned quite a lot from them.

Steve: Oh, yeah. For sure. You have to learn from them. Yeah. Yeah.

I mean, I think the big thing is,

Stu: They don't know much from me.

Steve: They don't have to. They don't. Yeah. I mean, that was, like, the best thing, you know, like like I said, you know, seeing what you're doing here is and I I've seen this other places. Right?

But, like, to go the first few years, you bootstrap it. You hire who you can afford. Right? Like, there's no shame in that. We've all done that.

That's I'm still kinda in this season. But the the next season is when you have when you're responsible with your finances, when you got operations working, you got effective communication between all departments. Now you unlock this whole other world where you get to hire talent that's done it

Stu: Yeah.

Steve: Better than you can ever do it. Right? And then now they're all contributing ideas.

Stu: You could never, up until probably four years ago, I would never have understood what a data lake was and why it was important Mhmm. And things like this. And I remember having the first meeting when we got this guy to come across, and he did this meeting. And I said, we need to do that again.

Steve: Mhmm. Yeah.

Stu: And then we finished it again. Mhmm.

Steve: What did he do?

Stu: He did a he did a presentation for me Okay. Talking about data and how they stack the data and how they, extract information and how they make sure the information is distilled and appropriate and how it's stored safely and how we're gonna have cybersecurity and all these different things going on. And I'm a CCR. It's just I've literally got no idea what you've just said for about an hour, but I'm gonna need you to do it again. And I did it again.

I still don't understand, and I actually said, hey. You know, now I just need you to email this to me. I'm just gonna send you Bitmail because I gotta learn up on this. Mhmm. And, it was it was awful because I'm not that guy, but on the same token, I was also like a kid in a candy store.

Mhmm. I'm like, this is very cool. Yeah. But, yeah. I mean, getting those guys that have come in that know what they're doing, have done it before, and to them, it's easy.

But there's also a great learning opportunity for me too. There's certain things that they those people don't bring, don't understand.

Steve: Of course.

Stu: And, and I actually see that in the industry right now an awful lot. In fact, I would say this, lending home care, we spoke about before. That that's an operation that I think has got a ton of operators in it now, and I think they used to they came from a big background of having really smart, clever Capital Wall Street. Mhmm. I would say that they've still got all those clever folks in there, that I think they're all supporting some really smart operators, which is why that business is booming right now.

Yeah. And and and I think the industry will get to that place. But but it was a great learning opportunity for me as well to learn from and and also for them to understand sections of the market they don't understand.

Steve: Right.

Stu: But, yes, working with those types has been very, very good for us.

Steve: Yeah. Absolutely. And, like, you know, Liz Wiseman, she wrote a book multipliers, which is, you know, the importance of having input from all members of the organization. Right? And we've all heard the expression, you don't wanna like, you never be the smartest guy in the room.

Never be the smartest guy in the room.

Stu: Right? And

Steve: it was easy to say. Right? But we hire people and we train them. Unfortunately, there is some limit and the limit is us. You hire some really sharp guys with a track record.

Now you take that room and you go with the multipliers. Right? Like, what's the best idea that this group can come up with? You're light years ahead of the competition.

Stu: Yeah. I mean, again, I I think we hard with that understanding, but it definitely helps. Mhmm. You've got a big idea. You've just invented the next iPhone.

What now? And and and so, you know, if I try to rate that to you or me, you know, businesses that we starting with the big idea. Yeah. Yeah. We got this big idea.

What do I do with it? And it's just, you know, so you get these people that come in. You say, hey. I think we can do this, this, and this. And they're like, great.

But you'll need this, you'll need this, and you will need this. Mhmm. You know, I've never heard of any of those this, this, and this is. And and so, yeah, you need those people to come in to actually lay the foundation. Mhmm.

It's difficult. I found it difficult. We found it difficult in the last few years because I can't explain that to people that are working and grinding out in the field because that'd be the same as me four years ago if someone had sat down and explained the data lake and and what that actually meant Mhmm. To your infrastructure.

Steve: Right.

Stu: And you can't explain that and and and things like that. So, it's valuable in so many different places, but when you're starting to formulate a plan or you've got a strategy or you're moving to a place Mhmm. Having someone that's been there, done it, literally got the, the picture of them ringing a bell, it helps.

Steve: Alright. So, yeah, I just spent, like, the last hour talking about everything and everything about your business. So let's talk about something different.

Stu: Good.

Steve: I don't know if you've noticed, but the industry changed a little bit.

Stu: I'd I'd picked up on

Steve: There are some people that, do not care, for wholesaling in one way or another, and they're trying to regulate it. So what are you seeing out there right now?

Stu: It's not just this. It feels like this because maybe this is a space that you talk about. Maybe you're involved, I'm involved, you know, whatever it might be. But it's everything. There's been a ginormous shift in what people believe Mhmm.

Understand, and don't understand. And, yeah, I think everyone's kind of running around trying to figure out which is the right which is the right direction, what's the right thing, who's the good guy, who's the bad guy. But it's coming in in all areas. I see that clear co op is now on the chopping block.

Steve: The clear.

Stu: Co op. That's about Really? People don't know what clear coop is. But They're

Steve: really trying to get rid of clear coop operation.

Stu: There's a whole the the the the competitor to NAR just launched over the weekend. It's That's

Steve: been like for years,

Stu: there was this big

Steve: hoopla about clear cooporation.

Stu: Companies went out of business because of this thing that they are now saying is any number of different things. But, yeah, over the weekend, they they they, the the It wasn't? End up it's the I can't remember. I think it's areas. Is that the it's the competitor to NAR, and and they launched the whole campaign.

Mhmm.

Steve: This guy's I think it's all over the news.

Stu: Down. And NAR has got it under review. I think they just can't get to it till the end of the year. I can't remember exactly, so don't call me. But, yeah, I mean, again It was like Rex

Steve: or something like that?

Stu: Rex is one of the ones that was involved in this kind of a thing because of the clear co op and and the issues that came out of that. Yeah.

Steve: Yeah. Because there's And

Stu: there's a but there's a number of others.

Steve: Yeah. They were trying to come on the lot

Stu: of them.

Steve: Coming out here and, like, make their point. I was like, I don't know if people on the show.

Stu: And the thing that was so odd is that certain realtor bodies just said no. Mhmm. That's what just said to click on Austin real realtors in Austin, Texas just said, no. We're not doing that. Yeah.

So it was just kinda like, good lord. So so if I which which MLS do I join? Which realtor body do I join?

Steve: So let's before we go too too much further down this, like, not everyone knows a clear cooperationist.

Stu: Clear co op was basically this concept that you were doing a seller or a buyer an injustice or you weren't treating them fairly. If you didn't, there's a lot more to it. But you had to if you got a property, you had to put it onto the MLS within twenty four hours.

Steve: Right.

Stu: And I can probably list a 100 reasons why that's a terrible idea.

Steve: Correndous idea.

Stu: And, I can understand what the thinking behind well, I think I can. Mhmm. Why were they were trying to do this? Yeah. But who were they doing it for is really what you get the question.

Mhmm. And, and that's the question that's being framed up now.

Steve: So so so my perspective on cooler corporation, my understanding of it is that it they do it to avoid discrimination. Right? If we're gonna sell a property between this seller and help this buyer buy it, if we don't put it on MLS, then we're not giving minorities a fair stab at buying the property. Right? And I think a lot of it came from, like, the Northeast, whether it's Philly or Jersey or whatever.

That was the argument. And for me in Arizona, it's like, I don't care about the nationality. Am I gonna get paid? Will I get a commission? If I will get a commission, I don't care.

Stu: There there there's so many considerations that just weren't taken into account

Steve: at all. And so the the the fine is if you if you post posted the property on Facebook, if you send an email about the property Whack. You had twenty four hours, 5PM or 12PM twelve midnight next business day, right, or next day to put it on the MLS, or it was like a $500 a day finder, something outrageous. Right? So now the time I'm getting like, all this hoopla, like, the last few years.

Stu: And and and so that goes into your original question that coming after I mean, everything. I think everything is being reviewed. Everything is being looked at. There's all kinds of different concepts, ideas. Is it good?

Is it bad? I don't think that's gonna come to a stop anytime soon. I've been involved in, several different states and their versions of legislation and change. And and they have a base knowledge. It's about 50% of what actually goes on in the industry.

Steve: Right.

Stu: A lot of people. And so that I'm not saying that they aren't experts in one section, but you say real estate. I always joke. I travel a lot. You travel a lot, and people say, what are you doing?

You say, real estate. And they say, commercial. And you're just like, yeah. Commercial. Mhmm.

And, you know, there's so many different aspects We

Steve: were talking about

Stu: real estate.

Steve: Auctions earlier.

Stu: And it's just yeah. So so so it's just there's a lot of consideration. There isn't much given to it, and there's an awful lot that's changing very, very quickly in this space. It's gonna continue to happen that way. So, yeah, are they coming after what is titled as wholesaling?

Sure. And and any number of other different areas as well. But, definitely, if you're in that version of the game Yep. Don't just scrump it up, throw it in the beginning.

Steve: What are you doing to compare your organization for what what feels like an onslaught? What feels like they there's

Stu: Well

Steve: They're looking at us harder.

Stu: They they definitely are, and I wanna be clear with good reason in some examples. Yeah. Which one have dialogue? Mhmm. I wanna know why you want to achieve that.

What is it that you actually want to achieve? Why are you saying that? What's happened? So we try and have dialogue. As a company, you know, we have a compliance team that that will sort of keep us up to date with changes and and and additions that are happening in any one of the states we're in or the ones we're going to.

But that that doesn't mean you're you're protected because, again, you read the section of the law Mhmm. And you've interpreted it one way.

Steve: Right.

Stu: And I've read it completely different way.

Steve: Right.

Stu: And he's just like, so what do we do here? And then you call, and this is an experience we've had. Mhmm. I speak to regulatory body, phone answer number one. Mhmm.

He tells me one answer Mhmm. Sends it to me in an email. I call again because I just wanna double check, but I don't get regulator or phone telephone operator number one. I get telephone operator number three.

Steve: Yeah.

Stu: And he or she says exactly the opposite and sends it in an email to exactly the same question. And even then, you so it's difficult. It's difficult. But but it's not to be it's not to just it's not to be don't disregard it. Take it like it should be taken.

And if your business, if your livelihood is based around this and you spent some time doing it, be aware sticking your head in the sand is not the answer.

Steve: Not the best answer.

Stu: Not the best answer.

Steve: What would you do if 2025, January 2025, they all get together, all the real estate commissions, so on, and they figured out a way to say, alright. Nobody is allowed to market a property they don't own. You got a pretty sizable operation.

Stu: Sure.

Steve: What would you do? You spent countless weeks going back and forth with a homeowner only to lose a deal because the seller changed their mind, another wholesaler made an unreasonable offer, or what the seller needs from the sale, he just can't pay. Now imagine you've got the ultimate control on a property that you just locked up, meaning you're on title and every decision has to go through you eliminating virtually every external threat. That's why the installment method was created. Through installment payments,

Stu: you have full control of the property as your name is now on the

Steve: Imagine combining the best creative financing with the flexibility of Imagine combining the best creative finance with the flexibility of marketing the property on the MLS to collect the most amount of revenue possible, all while having total control of the property. This is just the tip of the iceberg. The concept here is simple, but implementing is challenging. So visit wholesale2024.com to learn more so that you'll never have another deal blow up in a pretty sizable operation.

Stu: Sure.

Steve: What would you do?

Stu: We've got multiple concepts around all of these things as we track them and we see. So one of the reasons we wanted to be licensed was so that we could step left if that did change or something like that did happen. Same with our our licensing for our, fix and flip arm and the mark marketplace label license, we don't need to be. Mhmm. So I I think we have multiple strategies that that we would incorporate and we would move to.

But with that said Mhmm. I think having the dialogue and getting in front of those discussions and understanding, what, where, and why is probably a more likely approach. It is the approach from us to try to understand and say when people say something like that, I would need you to explain why. Mhmm. And and and trying to understand what their issue is.

Again, there's no need not always a need to be combative. It can get combative. Mhmm. But, yeah, we're trying to approach it,

Steve: With curiosity.

Stu: Yeah. And and and what is the actual activity you don't like, or what is the thing you're doing? The problem is this just, again, like I've said many times, they've got so many examples of of bad actors.

Steve: Yeah.

Stu: So so that's problematic.

Steve: Have you ever, with one of these conversations trying to understand someone's position? Just wanna, like, walk out of the room and just bang your head?

Stu: I I I've been involved in one situation where I was speaking to a lady, and she just started, I mean, losing her mind screaming at us.

Steve: As she was, like, a congressperson, a person who writes the law?

Stu: No. She was a part of a real estate body. And, and it was very, very difficult. And it took everything, you know, biting my lip. Just and just you had to just sort of sit there and waited until this lady.

I don't know if she passed out or she just ran out of breath. And I just said, I'd like to break your points down one by one. So firstly, this is just a a you know, you've misunderstood. That's absolutely not what happens. And yeah.

So so there's been there's been numerous instances. The the this is this is I don't pretend to understand residential real estate listing business. I don't pretend to understand that.

Steve: Yeah.

Stu: And so I I have to take that as a grain of salt when I'm speaking to a realtor that probably has done a thousand listings. I don't know what they do. Your listing presentations, presentation. I don't know. You know?

I know what's going on. But I do know our section of the industry. And so if you can be a little down to earth and say, you know, I'm not suggesting I know everything about your space, but can I explain and understand and then you can understand and you can explain to me? I was actually on the way over with my Uber driver, very rounded chat. Good egg.

Just telling me we all need to come together a little bit more, and I was agreeing with him enormously. But, yes, there's been numerous times, but one in particular, just a very, very unreasonable it was around the clear cooperation issue in which our fine was significantly more than what you said.

Steve: And then the the last question I wanna ask for everybody here is, you'd mentioned something to me privately, which was, Steve, whatever you're doing, if it takes you more than two minutes to explain it to a judge you wanna explain?

Stu: Well, it was just that we were just having a conversation around different business models. Mhmm. And I think people use this word creative, and sometimes it's very creative and clever, and it's very good. Mhmm. And I'm not suggesting if you title yourself as a very creative guy that you're not a good guy.

I'm not strong. But, there are some where it's just like, that doesn't sound as creative as it sounds devious. Mhmm. And I guess what I'm trying to say is when it comes to homeownership, I think there's very few people Mhmm. That are gonna side with you, whether you're a good egg or a bad egg, if you can't explain what you do very, very quickly.

Mhmm. If a judge or, you know, a high power is questioning you about what's going on and you can't explain it where you have to have multiple different versions of the story and draw a diagram and do all these different things, then, yeah, I think I think you probably if you get into a legal wrangling situation, you're probably not gonna get the the

Steve: You might be speaking from a little bit from experience.

Stu: Yeah. I am. Yeah. I am.

Steve: Yeah. So the reason why it it has such a profound effect on me when you said that was, in my mind, if I'm ever in a courtroom, of course, the judge is gonna be of sound mind, not rushed, right, doesn't have all these hearings going back and forth, right, like a movie, like a TV show.

Stu: Yeah.

Steve: Right? But that's not a reality.

Stu: It's not a reality.

Steve: Our reality, the all the, the the as a the docket the docket is overloaded.

Stu: 100%.

Steve: All these hearings have been stacked for months. I mean, there are cases, like, in California where murder cases are being thrown out because we passed the the the, right to a speedy trial.

Stu: Yeah.

Steve: Right? It's like everyone's overwhelmed. Everyone's under a mountain of stress. God knows what the judge is dealing with when he goes home as far as grocery bills. And I'm gonna sit here as, like, well, your honor, here's how this works.

Right? If I can't and when you said that, I was, like, yeah. I need it's not about whether I'm right legislatively.

Stu: It's definitely not about whether you're right.

Steve: Yeah. It's about, are they even gonna listen to you?

Stu: It doesn't matter whether everything you have done is based on the amount of times we've heard, I've heard. My attorney reviewed this and said that I'm good. Alright. I am sure that he or she did. Mhmm.

So what? Yeah. And and I don't know. That sounds rather flippant. But but I'm just trying to say, you got a window of time if your model is complex, confusing, and not based around something that is digestible.

You've already seen what we did with the Frank Dodd, etcetera, etcetera, up to 2,008.

Steve: Right.

Stu: And they are very, very concerned about a homeowner and the real estate market. Heck, look at the new political parties that we currently Mhmm. Have to work with and their different agendas to this too. So make it easy. Make it quick.

And if you can't, just know that this is a space that is gonna be heavily protected. And it doesn't matter what team your judge is on. It doesn't matter anything. If you can't explain it, they're not they're not gonna look favorably on you.

Steve: Right.

Stu: So, yeah, that was really the discussion we were having. When people get up and they explain, it takes an hour to explain what they do each deal. Mhmm. And it's like, we did that to do one deal? Yeah.

Are you kidding me? And and if you, you know

Steve: So it's not about whether it's right or wrong. It's that is a judge who is overloaded

Stu: If you get into a pickle Mhmm. Most definitely. That is it. If he's overloaded, she's overloaded, and you try bringing this thing With diagrams. And then I take this piece of paper, and I slide it over to this side of the desk.

Yeah. And here's my disclosure. What page is that, sir? Mhmm. Now, that's page 340.

Mhmm. But this one had a POA. So the homeowner didn't even sign. You just signed them half of yeah. That sort of stuff is is

Steve: Yeah. Yeah. We just said it to me. I was like, oh, yeah. That's that's real world Yeah.

Versus

Stu: And, hopefully, nobody has to experience it or go through or understand it. But but, again, I think you I don't know where that chat came from. But

Steve: But the idea alright. Because we go about it. We have all these legal brilliant legal minds on Facebook.

Stu: Yeah. Yeah. Right? Media, lawyers that

Steve: are the best. Right? And then we have our ideas. Right? And then there's, like, well, what actually happens when you have to stand there in the courtroom and there's another older lady or gentleman on the other side

Stu: Nothing good.

Steve: And the judge is, like, walk me through what happened here. You already lost fighting an older woman.

Stu: Yeah.

Steve: Right? Like, someone that's 75, 80 years old. You already lost. You got a lot of ground you gotta gain.

Stu: Real quick.

Steve: And then you show over, like, well, with this and this and this and then this and then this and then this.

Stu: And that's just the truth of it. And, again, I wanna be clear. I am not sitting here trying to suggest that you or I are better or worse. I'm just suggesting that I hope to be better, and I would like to, you know, advocate for that and and and help people under pretty strict instruction, but, that is a 100% the case, specifically with your recent example. Mhmm.

I mean, the judge will it's alright. Let me stop you there, mister Train.

Steve: Right. Yeah.

Stu: Yeah. It's common sense.

Steve: It's common sense, but also it's real world experience because you've done a lot of transactions. You've had to have conversations you probably didn't want to have.

Stu: I've been we we've been very heavily scrutinized. Yeah. Yeah. That's fair.

Steve: And so you have a different perspective than a lot of these other guys are showing cashier's checks on social media.

Stu: And that oh my gosh. That was actually my first presentation. I don't know if it was sorted out.

Steve: I did not.

Stu: It was very embarrassing because I presented to a group and, well, I think, yeah, I was showing somebody on a workbench with stacks and stacks and stacks of cash. Mhmm. And then they had some anyway, it was very embarrassing. Yeah. But but, yes, that's not a great image.

It's not a great look. I don't know who you're doing that for, but stop.

Steve: Yeah. So, before we wrap up, are there any last things you wanna make sure all the listeners take away today?

Stu: I don't I don't think so. No. I I think I appreciate you. I generally don't do the social media. I think if I haven't said that already, I wanna make sure I got that in.

Yeah. So thanks for inviting me.

Steve: Well, I had to call in all my favorites.

Stu: Yeah. Did you guys with the, baseballs? The Yeah. Baseballs. Vinny down there.

Yeah. Yeah. No. I don't think so. It's been fun.

Journey's not over. We're still gonna carry on doing things. And, no. I hope hope the people have found it useful. Yeah.

It'd be more fun. We should have a cocktail or two.

Steve: Thank you so much, everybody.

Stu: Appreciate it. Appreciate it.

Steve: Appreciate it. Thank you guys for watching. We'll see you guys next time.

Stu: Shout out to Steve train. Jump on the Steve train. Disrupt us.

How to Wholesale 15 to 20,000 Houses a Year

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From Owing $60M To Funding $4B In 2025

How to Wholesale 15 to 20,000 Houses a Year

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