Matt Larson Shares How He’s Flipped 3000+ Houses and Owns 200 Rental Properties

Steve Trang: Hey, everybody. Thank you for joining us for today's episode of Real Estate Disrupters. Today, we have Matt Larson, and he flew in from Davenport, Iowa. The sheriff has flipped over 3,000 houses and owns over 200 rental properties. If this is your first time tuning in, I am Steve Trang, broker and owner of Stunning Homes Realty, founder of the OfferFast Homes app, the only MLS for off market wholesale properties.

And I'm on a mission to create 100 millionaires. So if you'd be interested in doing that, let's connect on Instagram at steve dot trang. If you're excited for today's show, please give me a wave. Give me a thumbs up. And as a friendly reminder, I don't charge a dime for this show.

I don't make any money doing this. So here's all I ask. This is what it costs for you to listen to this show. I've been advised by a consultant that I need to get to 505 star reviews in iTunes to hit some of my crazy goals. So please do me a favor.

Go on iTunes, subscribe, and give a five star review if you can. And if you could write a review, that'd be even better. And this is a live show, and Matt's totally an open book. So please pose your questions for Matt to answer. You ready?

I'm ready. Alright. So first question is what got you into real estate?

Matt Larson: So okay. So I, just a quick background. I'll try not to tell too much of the story, but I grew up in a small town, outside of Quad Cities about 30 miles. Small town, 3,700 people. And, you know, did the typical thing.

I was really big into football. And after or after high school, you know, I wanted to go to college, but I wasn't a I wasn't a, like, a student. Like, I wasn't good at grades, and I wasn't good at homework for sure. School wasn't

Steve: your thing.

Matt: School was not my thing. And I really didn't even know what I was gonna go to college for. I just knew I wanted to play some football.

Steve: Mhmm.

Matt: After one season of the foot of of football and of one semester in college, my I didn't like football anymore. It wasn't as fun as high school, and my grades were so bad that, that I didn't even get to drop out. The college told me, hey. We we don't want you to come back. They

Steve: volunteered you out.

Matt: They volunteered me out. So I I I leave, and I come back home to my small town, and I'm like, I gotta do something. And my dad's like, well, there's a machine shop in town. You you need to find a job. So I applied to this machine shop, and, I started working in a machine shop at 19 years old.

Steve: Mhmm.

Matt: And so I did that type of work for until I was 30 years old. And Oh, really? Eleven years? Yeah. I was

Steve: 30 years old. And Oh, really?

Matt: Eleven years. Yeah. I was I was working in a machine shop. Never had, you know, just not really I'd never got good grades and wasn't really a book guy and didn't really know what else to do. I was, like, work with my hands.

Steve: Small town.

Matt: So, anyway, I was dating this girl for a little over four years. And one day, she tells me she goes, hey. I, you know, I wanna break up. I wanna date somebody that has status, has status, and I wanna date somebody that makes money. And at that point, I had never I had never thought about making money.

Yeah. I it just didn't cross my mind. I didn't know people could make money. I really didn't. I didn't know about, like, that that you could become a millionaire from being an entrepreneur.

I didn't know you could start your own business. I I had grown up. My dad literally, as we grew up, we I came from a very poor family. You know, we had stages of where we we went through where we're, you know, on food stamps literally. And always lived in a very, you know, kinda crappy house, and my parents always rented.

And so, I you know, when I was little, we every Sunday, we did the typical, you know, drive around town or Sunday drive. And every time we drive by a really nice house, like a what I thought was a super nice house, like a $200,000 house, I'd point to it and I'd say, dad, how does that person afford that house? And he'd say every time is the same answer. He'd say, they inherited money. So I didn't know money could be made.

And all of a sudden I just thought, you know, my dad always said, if you wanna make extra money work overtime, if you wanna make extra money, cash in your vacation so that you have, you can take the money and keep working. So So I didn't understand money. But that day that my girlfriend was like, I don't wanna date you anymore. I wanna date somebody with status. I was like, I gotta freaking figure this out.

I gotta figure out how to make money. So all of a sudden, my eyes were open Mhmm. And I'm looking. And the next thing you know, I'm up late one night. It was you know, I couldn't sleep, stressed out, and I see this infomercial.

And on this infomercial, it was how to make money in real estate. And I was like, man, this guy on TV, he doesn't look that much older than me. And look at and it's it's like flashing to some of the deals that he had done, and he's flipping, oh, I made 46,000 here. I made 22,000 here. And I was like, wait a minute.

I can make money with real estate, and it doesn't take money to do it. I'm in. Yeah. So I buy the book, and I literally get started. I I I'm I'm I'm reading the books, and I'm just again and again and again, and I can't get enough of it.

And that was really my entree into real estate.

Steve: That's a big one eighty from not do not being a school person.

Matt: Yeah. I mean, I and I went, like you know how some people will hear a good idea, and they're kinda like, I don't know if it'll work or, I don't think I can do that type of thing or something. Well, when I saw it, I was I was so convinced that it was legit. There wasn't even 1% of my mind that said that I couldn't do it. So I literally I didn't have much.

I had a ton of credit card debt. I had, like, $700 in my bank account at the time, but I had $15,000 of the credit card debt at this time.

Steve: Your girlfriend wasn't wrong.

Matt: She wasn't wrong. No. She wanted to date a doctor, and I wasn't that. But, so anyway, I took everything I I live had a small apartment, seven 300 square foot apartment. I could almost touch the walls.

But I took everything that I owned, and I sold everything. I took I sold my all my furniture. I had a motorcycle. I sold that. I had a truck.

I sold that. I had a four wheeler. I mean, I was down to nothing. There was nothing in my house. Sold everything and thought even though I thought, okay.

The book say I can do it with no money down, I'm and I'm that works for me. Any little bit of money I do have, I should invest it. So that's how I got started. I did my first deal, and it was a a no money down, deal. And what I did is I brought in a partner to help put up the cash, and I kinda did the renovations and and all that.

And we eventually refinanced it, pulled some cash out, paid him off, and then I owned it free and clear, plus I had a little extra.

Steve: So you've kept the first property you bought?

Matt: Still have it. Never gonna sell it. Yeah. I still have my very first property. So, you know, that's really how I got started.

You know, I just I just, you know, read a book and got excited. It's like Carlson Sheets? No. It was, Dean Graziosi. Oh, yeah.

Steve: Okay. I've heard

Matt: of that guy. Yep. So Dean did got his stuff, and and that's, that was my start.

Steve: Alright. So we talked about your first real estate deal. So what were your struggles then when you started?

Matt: So, you know, like like anything, so I started so my very first deal was in November 2005. So if you can go back in time and remember how hot the market was back then. Everybody and their brother was doing deals. And I'll never forget. I went to my real estate agent at that time, and I found this house, a foreclosure.

Idea how hot the market was. I went to her and I said, I wanna make because I was making all these offers, and they were getting turned down. And so I was, like, adamant that I was gonna I was gonna get a deal. And so this was, like, my second or third one, but I was working hard. And I go to make this offer, and my real estate agent was like, Matt, that's a really low offer, and I just don't think it's gonna get accepted, but I'll put it in.

And I said, I wanna put in a cash offer for this house. And she goes, well, do you have the cash? I'm like, no. But I don't care. I just wanna do it.

So I said, I'll figure it out somehow. So she makes this cash offer, and then the the agent on the other side representing the seller says this is how hot the market was. She goes, I don't care that it's a cash offer. Anybody can go to the bank and get a loan for this thing. So that's that's what I was dealing with.

So that the strength of the market back then, it was such a seller's market. But that foundation of going through o five and o six and o seven helped build my foundation and helped me get really, really good at buying houses even when the market was way up. Mhmm. So then so let's go through. So so it was a struggle.

I had to make a lot of offers to get one deal. And I started I and wholesaling quickly became it was difficult, but it became very difficult when the market crashed. But when the market crashed, it was a dream come true for me because what happened was I was still working during the first three years of my business. And like I said, I had built a lot of skills in going through the tough times of, you know, everybody can get a house. But, what happened was in o eight, I quit my job.

I had by that time, I had built up around 30 rentals.

Steve: Mhmm.

Matt: And I had done little

Steve: whole sales whole time?

Matt: Mhmm.

Steve: You had 30 rentals? Yep. How much were you cash flowing?

Matt: $5,000 a month after all expenses were paid.

Steve: Still working.

Matt: And I was still working. Now here's the cool part. So I had I was comfortable enough that I was like, I'm quit my job. Now everybody said you are stupid. You're crazy.

Nobody quits their job in o '8 when there's just I mean, every time you turned on the news, it was like, 100,000 pea a 100,000 people are getting laid off, and there's just unemployment spiking up to 10% in some cases. And and everybody's like, you're crazy. And I'm like, no. I see the opportunity. I had prepared myself well, and I still didn't have a lot of money.

In o eight, I had about $20 in my bank account, but I had $5,000 coming in for my rentals. But most importantly, I had the experience of what it took to build that foundation to be able to get those properties.

Steve: Mhmm.

Matt: So in o eight, I quit my job. And and now I'm, like, I'm scared to death. I'm, like, it wasn't like I was, you know, thinking I'm just gonna become a millionaire overnight. I was scared. It was scary back then, but I was confident enough in my skills that I went all in.

I went into o eight with about $20 in my bank account in late o eight. By February, I had a million bucks saved up. Wow. And I had hundreds and hundreds and hundreds of deals that I had bought, sold, wholesale, flipped everything.

Steve: So in that time, were you trying to acquire rentals or trying to flip? Were you trying to wholesale? What was your focus?

Matt: I was doing I was doing a little everything. I was doing a lot of wholesaling. But I was was doing a lot of flipping too. And, you know, a lot of times people say, oh, you know, you can't retail flip houses during down markets. That's totally not true.

You have to there's a specific way to do it, but I was doing it. And so, I was doing a lot of retail flips and a lot of wholesaling and then just keeping some rentals as I went. You know? Yeah. But, I mean, I had built up a pretty good portfolio by the time 2013 hit.

I had about thirteen, fourteen. I had probably 450 rental properties at that time. Not just doors. We're talking, like, some single family homes, duplexes, fourplexes, stuff like that.

Steve: Wow. Wow. So what were you cash cash flowing then?

Matt: It was over 30,000, 40,000 a month. You know? I was I was I was I put debt on a lot of those to leverage, but I was, very fast pay down, like, short amortizations, fifteen year, twenty year amortizations. So I was loading I wasn't as concerned back then during that time. I had built my foundation, and I was ramping up.

But now I had I knew how to wholesale and flip, so I could really take a lot of income that I was making from that and pour that into my you know, if I wanted to you know, anything I wanted in lifestyle, car, house, whatever. My my rentals, I was okay with leveraging hard to pay down quick. But I was most concerned. My my main priority was get as many of them as I can Yeah. Because the time was I could see the time is now.

And by 02/1314, we were climbing out of the the downturn. So you're

Steve: saying because you could see the appreciation coming.

Matt: Yeah. I I knew I was buying at a discount. I knew that when I went to do marketing and find sellers to sell properties, it was taking candy from a baby. It was it was it was almost to the point where I can't even believe this is coming true.

Steve: Yeah.

Matt: I'll tell you a story. During probably 2010, I made an offer on a on a on a property. And it was crazy because it was a foreclosure. So it was actually listed. This was a this wasn't a unlisted property.

It was a foreclosure, and I made an offer. And I can't remember the exact numbers, but let's say they had it listed for $59.09 or something like that. I made an offer of, like, $30,000, and they countered me back at 27. They countered me back less just to make sure I'd buy it. That's the type of crazy stuff that happened during the that crazy opportunity.

Steve: Yeah. And

Matt: a lot of times people think that, you know, people get scared of downturns. And if you're a real estate investor, it's the greatest time you could ever.

Steve: I am so looking forward to it. I know that sounds terrible, but I am ready because I've been through one.

Matt: Yeah.

Steve: Right? If it was my first one, it'd be kinda scary.

Matt: Yeah. And I I never wish ill will on anybody. I don't wanna see anybody struggle. But the reality is when a downturn hits

Steve: That happens.

Matt: That that is an opportunity for a real estate investor that hasn't over leveraged Mhmm. And has some liquidity built. Now you can wholesale. They'll they're going to the last downturn. I didn't have that, but I had the skill sets to be able to buy with no money down and wholesale quickly and make money.

Steve: Yeah.

Matt: So if you're not over leveraged and you have the right skill sets, the the downturns are a dream come true.

Steve: Yeah. So I I posted a couple of days ago. I was like, you know, Matt Lars is coming on, and someone referenced the testimonial that you recorded. So I went back and watched it. It's really grainy.

Matt: It's not

Steve: the highest quality on YouTube. Yep. But there was something you said in there that was interesting, kinda goes back to what you're saying earlier. They inherited the money or or the cash and vacation days, whatever. Mhmm.

Because you were saying, my family always told me you never wanna buy a house.

Matt: Right. Yeah. My dad always said, my parents rented for most of their adult lives.

Steve: Yeah.

Matt: And my dad always said, never never buy a house. Always rent. Because if something breaks, you don't have to pay for it. So that was the mindset. I had a lot to overcome.

You did. That was the that was so drilled into my mind that I'll never forget before I got into real estate, I was probably 27 or eight at this time. And I remember this conversation. A friend of mine came over to my apartment, and his dad was a real estate investor, had, you know, fifteen, twenty twenty properties. And he was telling me how he was gonna buy his first rental.

This is only two or three years before I got into real estate. And I literally we almost got into a fist fight because I I laid it out for him on a piece of paper how buying a rental property is stupid. Buying or buying a a a investment property is stupid. You should be rent or your own house. You should be renting because that's what I had heard my whole life.

You know? And it just I took that as the facts. Yeah. So I remember telling him, like, because I my dad told me this so many times, never never buy, always rent, that, I just remember that two to three years before that, I just I was literally arguing people don't buy a house.

Steve: You know, it's crazy because there are times that we think about, you know, like, Ohio is big. There's several states, Tennessee

Matt: Mhmm.

Steve: Where you go and buy properties and hold on to them because it's a great rental market. Mhmm. And I can't, in my mind, understand why it's a great rental market until this conversation.

Matt: Yeah. Right?

Steve: It's just the mindset Mhmm. That you have. Yep. So the other thing I wanna talk about because I I was going through the other videos as well. So there's a video of you where you showed your ten forty in a YouTube video Mhmm.

Of over 700,000, which you reported to IRS.

Matt: Right. Right?

Steve: And when you had mentioned even the year before that was your first

Matt: Million bucks. Million. So what

Steve: was the journey to get to the first like, what are the things that you had to do? I know we talked about it a little bit.

Matt: You know, it's funny because, I you know, a lot of times people you I hear I do a lot of deals with, you know, where I finance. So I talk to a lot of bankers. And one of the biggest things I hear bankers say is that real estate investors are broke. They don't have any money Mhmm. Or their financials are terrible because, you know, you know as well as I do, if you're a real estate investor, there's a lot of tax advantages.

Income and wash it out Oh, yeah. With depreciation and tax, some of the other tax write offs, and and show nothing. Unless you're making so much money that there's no way to overoutrun all of that, with lot with, you know, passive losses Mhmm. To the point where you're showing tons of income. And know, passive losses Mhmm.

To the point where you're showing tons of income. And so I had I was tired of people saying, you know you know, it's it's you're faking it. There's no way you're doing this. So I I I'm not I wasn't afraid to to post that online. And, but to how how I got there was I just created a simple strategy of, okay, what generates money?

Okay. Will rental properties do it? Let's take a look at the math. Yes. A rental property will generate you income, but it's very, very small and it's very incremental.

Rental properties are a long term if you don't have long term vision in real estate, don't buy a rental property.

Steve: Mhmm.

Matt: You you gotta want to be in it for a while. Because the day that let let's say you buy a property and you buy it on a fifteen year or twenty year amortization. Fifteen to twenty years from now, not only has the rent probably doubled over time, but you've also paid down all of the debt, and now it's free and clear. Now you're making real money.

Steve: Yeah.

Matt: So that that is but that's not gonna get you rich quick. The wholesaling and flips, that's your fast cash. Okay? Now if you're doing a retail flip where you buy it, buy the house, fix it up, you know, put it on the market and resell it, it's not really super fast cash. Right?

That's more of a I can get a big chunk of money in a, let's call it, ninety to a hundred and twenty days or maybe maybe six months depending on how long your rehab takes and how long it takes to sell. So you can make more money doing that, and that was part of my strategy. I'm gonna take, you know, two out of every 10 deals I do is gonna be a a retail flip because those are big chunks of cash. But then, you know, I need to take six or seven out of 10 that I do, and I need to wholesale. That's fast cash.

That's cash without investing a lot of money. So my strategy was wholesale primarily, pepper in some fix and flips, and then let's throw in a few rental properties while we go at it as as well. Yeah. Because I wanted to build a long term. And the only way you're gonna get financed for rental properties is if you have the financials that the bank can see.

He's got liquidity, he's got cash flow, and he's got a net worth. We're gonna loan money to him. Yeah. I had figured out that strategy early enough that I knew the only way to get to rentals, which is everybody's long term goal, you gotta have the financials so the banks won't lend you money.

Steve: Right. Not writing off too much of it. Right. So then 2015, something interesting happened.

Matt: Yeah. So 2015, it was terrible. I had I wasn't managing any of my own properties. I had a property manager managing them, and I had about 450 houses at that time. And one day, I get this weird feeling in my gut.

And I was living I was actually living out here in Scottsdale. All my properties were in the Quad Cities in Davenport, Iowa. And I get this weird feeling something isn't right. I didn't get my rents the the time that I should have. And then I called my property manager.

Hey. What's going on? I haven't seen my rent money yet. And one excuse kinda led to another. And over the course of a few weeks or maybe a couple of months, I went from getting my rents for that month on the fifteenth to getting my rent.

Like, hey. You know, she said, hey. We're we're a little bit behind right now. I'm gonna pay you the rents on the first of next month for this month. So okay.

Well, then it stretched out a little bit more. And next thing you know, I'm I'm two months behind on getting my rent money. And I just like something's

Steve: wrong. That's a lot. 450

Matt: houses. Okay? Do the math. On an average, 850 rent. Yeah.

It was a lot of cash. Plus, I had my security deposits, my maintenance reserves, everything with her. So I get this weird feeling. I send her a text message, and I'm like, hey. I want I want to meet you.

I want today with a cashier's check for all my rents. I want all my leases. I want all my keys, and I want to meet you at 01:00 today. And next thing I know, she's like, okay. I'll meet you.

And next thing I know, she tries to commit suicide. The money's gone. I I had figured out how to freeze the bank accounts legally through the a judge and the court system within three days, but it was too late. Money's gone. So I had about a million bucks disappear out of my life in a short amount of time.

And this was 09/22/2015. I had eight days. I'm I have two employees. I have my assistant and my bookkeeper. I'm living in Arizona.

My properties are in, you know, a thousand miles away. I don't know who my tenants are. And I'm like, I have eight days to collect next month's rent. So I get on a plane. I fly back to the Quad Cities, and I'm, like, scrambling.

So and my my girlfriend at the time was helping me as well. She was she her and I had we're pretty new, dating, but she jumped in there and helped as well. So I guess you could count, like, three employees. But we built a we had a little team, and I was posting ads trying to hire some people. I had to start a property management company overnight.

I had eight days. So imagine imagine you don't know who any of your tenants are. You gotta post a notice on your door that don't pay rent to the old property manager. Pay it to me. A scam waiting to happen.

Yeah. Exactly. People were saying, you're not my property manager. I'm not giving you my rent money. Yeah.

So we had to post on four fifty doors in eight days and try to collect the money. And I did a really good job, and we collected we were able to collect a lot of it. But then I forgot. Wait a minute. Some people pay ACH.

That's going into her bank account. Too late. That money's gone again.

Steve: So She's still stealing from you?

Matt: She she well, she that I I can't go into her bank account and get my rents. Mhmm. So some people had that ACH set up, though the rent's

Steve: gone Yeah.

Matt: The next month. And I'm I'm, like, trying to convince people, and I'm people are asking, hey. I need to see the deed. So I'm trying to get all that. I didn't have keys.

I didn't have anything. So, at the time, it was just it's it was a miserable time in life. And I you know, at the time, I was like, I don't ever wanna go through this again. And it was very, very painful. And luckily, I was one of the biggest lessons I can teach people is don't spend all your money.

You know, save some liquidity. Luckily, I had done that, which allowed me to, you know, kinda weather the storm. Because all of a sudden, I found I find out there were a lot of vacants that she didn't tell me about. We had about 200 houses vacant. But on the books, it didn't look like that.

And people were she it was to the end of the rope with tenants too. So many tenants had been fed up that they stopped paying rent and moved out within immediately because they're like, I've got all these work orders that nobody's ever called me back on. But, of course, we didn't know any of that even existed, so we're stepping right into it. And tenants are bailing like crazy. There were fake work orders put in where, you know, they had come in and said, hey.

This this thing's broken. We have to fix it, but then it never got fixed, but we got charged back. I mean, it was a it was a scam. Totally scam deal. So I'm, like, saying, okay.

I got 200 houses within a sixty day period. I got 200 houses to rehab. I gotta get these things rented fast. I'm writing a $100,000 check every month just to just to pay the bills. So I'm losing just so much cash.

It's unbelievable. And we get down. We've got about this is eight months later now, and I've just spent I've literally burned through my cash. I don't have any I don't have anything left. I got about $20.

But I'm but I'm finishing rehabs, and we're getting stuff going. And I'm thinking, okay. We can start selling some of these. So I had about $20, maybe a week or two left before I'm out. This is it.

I've all my work from the previous ten, twelve years, gone. So we start putting some houses up for sale. We start selling them, and I start gaining a little bit of momentum. And I was never gonna give up. I'm just not one of those guys that gives up very easy.

And I was working just insane crazy hours seven days a week. And at the time, I was thinking, man, I just I can't believe I'm going through this. A few months ago, I was in Arizona in Scottsdale sitting by the pool, enjoying life, cash in the bank, taking I mean, tons of rental properties. And now all of a sudden, I'm just the opposite. So so we, I'm thinking at the time, I'm like, this is the worst thing I've ever been through, but I think there's a lesson here.

I think I think

Steve: I'm gonna what I wanna ask you, what's the lesson here?

Matt: I I think I I told myself, I'm gonna come out bigger and stronger than I ever have. I kept telling myself. That's what got me going every every morning.

Steve: Yeah.

Matt: So, so the cool thing is it it started to come together. So the lesson was I have to build my own property management company, and I'm never letting anybody else

Steve: Really?

Matt: Manage my properties. So I I we build our own property management company, and we start actually cash flowing rental properties. It was amazing. Like, if you do it right, you can collect cash flow.

Steve: Yeah.

Matt: And so, I started selling some houses, and we sold and I so 2016 was the worst year of my life. 2017 rebounded, sold, made a couple million dollars net, got my money back, and, you know, was able to weather storm and create a property management company that I can trust and, you know, that all my my own properties are managed there. And anytime I sell a turnkey, they're managed there. And, so the the the lesson was if you really want true cash flow, you gotta find an amazing property manager. And the hard part is there's not a lot of them out there.

There really isn't. And so and here's here's why. Here's why there aren't. Most property management companies, they're they're a business. Right?

They're in it to make money. So the game is, how do you hire the least amount of employees and manage the most amount of properties to maximize the amount of money that you take, right, that you make? And so it's a it's a equation that has mathematically, it's impossible to make work. Mhmm. Right?

If you truly wanna property management's not a profitable game.

Steve: It's not a sexy business.

Matt: I know. So even to even today, we manage a thousand plus properties, and I own the property management company. We I still have never taken a check from it.

Steve: Yeah.

Matt: I I put all the money back in. And what we did was we put we invested into high high level employees. So I was like, hey. I've got my own rental properties. I don't need the cash flow from the management company.

I'm flipping houses. I've got that income coming in. I'm wholesaling. So I use the management company as a how good of employees can I hire to run this thing, top level people, give them the great pay, great benefits, and let the thing really run so that when I do sell a property, if it's turnkey, it is amazing? Or my own properties are managed there, and they're amazing.

And that's been that's really been the success formula Is that property management company being able to do a good job and not being, you know, hamstring on, hey. We don't have enough income coming in to really hire the the people we need.

Steve: Right. Oh, yeah. I mean, probably imagine that. I've done everything and every anything and everything related to real estate, and that's just probably, man, it's just one thing I don't ever wanna touch. Yep.

Alright. So meats and potatoes here, 3,000 plus flips. Mhmm. How are you doing hundreds of flips per year?

Matt: So I wish I could snap my fingers and we would be at my office. Yeah. Because my my operation's amazing. Again, it was create a created out of necessity when all when all that bad bad stuff happened to me with the property management. What I did was I went out and said, one day here's one cool thing I did, and here's what we do.

One day I wake up, and I'm like, I'm doing all these rehabs. Okay? We're rehabbing hundreds of houses a year, buying, fixing, reselling and keeping some. And I'm thinking, man, I spend so much money on, you know, materials at Lowe's and Home Depot, Menards, and all these big box stores. And I'm like, I'm really not getting much of a better deal than the guy that does a little kitchen remodel in his own home once in his, you know, ten year period.

Steve: Yeah.

Matt: And I was just not okay with that. And I went to the local Lowe's where I was buying all my materials, and I had I had built a relationship with the store manager over the years because we we were in there every day. And I told him, I'm like, hey. I I said, how much how much do I buy from this store a year? And he knew the exact number.

He goes, Matt, you buy $2,200,000 worth of product each year. You're our biggest customer. And so, I was like, well, how much do you do in sales per year in this store? He goes, we do 22,000,000. He goes, you're 10% of our sales.

Wow. I was like, woah. I never had any idea. But I was like I said, my next question was, well, let's start talking about a discount. I wanna get a better deal.

He goes, nope, Matt. We we automatically give you a better deal. The lowest possible price. Super nice guy. But I was like, no.

That's not true.

Steve: It's not his decision.

Matt: Yeah. Not my not not happening. So I go back to my team, and I'm like, hey. I got a problem. I don't wanna pay full price for materials anymore.

And, so I had this crazy idea. I said, what if what if we created our own mini Lowe's? So I literally looked around for a building. Because I I thought, man, I might this might be the dumbest idea on the planet, and I don't wanna lose a bunch of money on a crazy idea. So I went and found a 3,500 square foot building that I could rent for one year, just a one year lease, $1,300 a month.

So we rented this building. We got a carpenter over there. He built some wooden shelves out of two by fours and plywood. And we take our we take our stack of the SKUs we're buying every year. Like, right from Lowe's, we just print it right out.

We call Lowe's and Home Depot, Menards, and HD Supply, and Wilmar, and all these companies. And we're like, hey. I'm gonna I will buy a $100,000 worth of product and put it on my shelf at one shot. Here's the here's the list. Here's my annual usage.

Bid it. And I was thinking, they're not gonna give me 10% maybe. I was thinking 15 tops. Came back 40% less than I was paying. That was a $40,000 a month savings.

So this quickly, this 3,500 square foot building, we got it packed full. So I get it started, and I had hired a gal to just you decide where the stuff's gonna go. You meet with the vendors, and you put stuff on the shelf and be organized. And I left. And thirty days later, I come back, and she's like, stuff's, like, packed in the place.

There's no more room. She's like, Matt, we don't have any more room. We you gotta get a bigger building. And I I knew it was working because we were saving we saved so much money. I call my broker, my commercial broker.

I'm like, I need a building. I need 15 to 20,000 square feet fast. So we go down the street, and he's like, I got the perfect building. And we buy this 18,000 square foot building. And, I put an offer in that day, had it accepted within a couple of weeks, closed thirty days later.

And so now what we've done is we don't have the wooden two by four shelves anymore. We actually brought in a firm, an engineering team to to CAD draw out the layout. We built it, put brought in these nice shelves that go up to the ceiling. And Like, walk

Steve: around at Costco.

Matt: Yeah. Yeah. I mean and we added thousands of SKUs. And so now, I mean, we've got our own we built our own online store. So our contractors go on their own online store and buy literally pick materials from our online store that are on our shelf.

I think we hold 2,400 SKUs. And now our discounts are even further. I mean, because as soon as we built that I mean, imagine here here's one thing. You you you call a vendor and you say, hey. I'm flipping 30 houses a month.

And they say, sure you are, Matt. Sure you are. The difference is when you say, hey. Why don't you come over to my operation and take a look? And they walk in and their eyes get this big, and they pull out their phone.

Hey. Do you mind if I take pictures? And they're taking pictures. They haven't ever seen anything like it. And so the discounts kept getting better and better, and I'm buying it at cheap.

I mean, there's some products we get 70% off now. I mean, just in paint Mhmm.

Steve: In paint,

Matt: I saved a $100 a year. That made the payment one product made the payment for the whole building for the year. One product. But we've got 2,399 other products in that in that building. So that gave me a very unique, unfair advantage.

I'm buying materials at pennies on the dollar Mhmm. And everybody else is

Steve: going to Lowe's and paying full

Matt: price. Yeah. The other amazing thing Everyday low price. Everyday low price. The other amazing thing that happened, though, was as soon as I built it, now my contractors I I need more contractors.

I bring them in there. They you you go to a regular contractor and you meet them at Panera Bread or Starbucks or something. You say, hey. I'm flipping 30 houses a month. They say, sure you are, Matt.

You bring them into a warehouse 18,000 square feet that's that's got product up to the ceiling, and they say, how do I become part of this? Well, you put it you know, we can get you started. We do a little orientation, and we have them bid a product bid the the project. And they immediately further advantage. So, the other piece of it is, is most people have a contractor come in and bid a whole rehab.

They bid, the contractor contractor come in and bid a whole rehab. They bid the contractor bid bids labor and materials. And for years, my frustration was a contractor would come in and give me a price, and it'd be too high. And I'd be like, gotta gotta come down in price. And they always said, Matt, I can't come down in price.

Haven't you watched the news? Oil prices are so high right now. Remember when oil was like everybody's like petroleum products and oils? They're like, everything's oil, and the price is so high. It's not me, Matt.

It's not my labor. It's just the materials. So and now it's like the same contractor saying, Matt, it's it's the tariffs. The tariffs are so high. Yeah.

Well, I disconnected that by saying, I got the materials. All you gotta do is bid the labor. So labor came down because there was no more, hey. It's not the it's the materials. Mhmm.

So I never saw that part coming. I never saw the, hey. It's a better deal. I can get a better deal on labor if I supply the materials. And if I'm supplying the materials at a huge discount, I'm just it's again, it's just a unfair advantage.

Steve: Discount on the on on the materials. Mhmm. And then contractors coming to you Correct. And wanting to work for you because they know that you got work for them to

Matt: do. Right. It means volume. And and I'm not saying, like, right now, it's one of the biggest one of my biggest challenges is based on we're trying to grow. We we do 25, 30 houses a month.

I wanna get to 40. And the challenge is labor. You know, over the last few years, it's been a labor shortage. Right? Everybody and their brothers, they're a lot of new construction's being built.

Everybody's got a job. Unemployment's 3%, or less. So labor has been a challenge, but I think I've got an advantage over the the average guy trying to do a couple flips a year, you know. So let's talk about, like, a major remodel.

Steve: Mhmm. Okay. So what's, like, a major remodel for you?

Matt: So, I mean, as far as cost, typically, we spend about 45,000 per house. Okay. And then a regular rehabber is paying how much? If if a regular rehabber was doing the rehab I spend 45 on, they'd probably be at 65, 70.

Steve: Yeah. So you're you're making 25. I mean, you can basically bid on properties.

Matt: I can pay I can can pay more for a house than the average guy can and still make more money. Correct. Alright.

Steve: So that's gonna help you get a lot more looks.

Matt: Right. And yeah. So, I mean, we're able to we're in that that's kind of been like, that's the frustration of some of the other people in my market. There's a lot of sharp guys in my market, you know, and I've kind of popularized the whole wholesaling thing, you know, in the whole Quad City market. There wasn't a lot of wholesalers before I started wholesaling.

And now it's like there's a lot of guys doing it, which is great because I buy houses from them. So, but I'm kinda known as the guy that'll pay a little bit more, which helps me get more houses. And I can do that because I've got an advantage on the other side of things with the rehab. Okay.

Steve: So what is your number one source for deals then?

Matt: So we do let me just tell you I'll just kinda lay it out for you what we're doing on deals. Sure. A lot of cool stuff. So first of all, I do a ton of direct mail. I say a ton.

There's keep in mind, there's only 450,000 people in my market. So we typically send out 20,000 or so direct mail pieces per month. We do about 3,000 cold calls a week, so about 12,000 one other really cool thing I did was when I created the property management company, now all of a sudden, I needed I had to have some company vehicles for my project managers, and I had to have some company vehicles for our maintenance guys. So we bought these little Ford Transit vans and lettered them with our company name. And then on the back, we the tug takes up the whole back of the thing.

We buy houses, any condition, and a phone number. So I got about 15 company vehicles running around town with we buy houses on it, and we get a ton of leads from that. And that oh. I mean, people will call a bandit sign. You know, bandit signs work.

They're just it takes a lot of work to do them, and people throw them away. And a lot of people look at a bandit sign and think that's a scam. Right? And they won't call. But a van driving down the road with a company name on the side and we buy houses, they'll call.

The other thing I did now this is pretty cool idea. I've never seen anybody do this before. This is a few months old. I I was spending 20,000 a month on dumpsters. You know, we buy a house and have to be cleaned out.

Steve: Mhmm.

Matt: And I spent $20 a month, and I was like, man, I think I'm I think I need a better deal. So I went to the the guy and said, hey. We need a better price. No, Matt. We're giving you the best price.

Okay. So I went to my team and said, we're buying dumpsters. So, one of the guys on my team did a bunch of research, found out what truck we needed to buy and the dumpsters. So I spent a $100 on 20, 20 twenty fifteen yard dumpsters and the truck. So I got one guy on my team that all he does is drive around the truck all day, picks up dumpsters, dumps them, puts them back, puts them at the next house.

Okay? But it gave me the the real opportunity is it gave me another chance to advertise. So on the every one of these dumpsters, my company name and we buy houses and my phone number. And so we get you know, we're we're just new with that. That's just just starting to create some leads.

So we do the direct mail. We do cold calling. We do the trucks. Referrals, I buy from wholesalers. I'm I've been in the market for a long time, and I've done thousands of deals.

So everybody kinda knows to call me. So we get so many of those every month. And we always tend to squeeze out three or four MLS deals a month as well. We make hundreds of offers a month just to get a few of those. So that's pretty much the primary way that we're we're getting

Steve: deals. Number one so you're doing a lot of dark mail. That's number one lead source?

Matt: Yeah. I would say that's still that's still probably number one.

Steve: Okay. And so, like, you're and you're getting those are flips and sometimes wholesale?

Matt: Flips, wholesale, or yeah. Turnkey. Yep.

Steve: Yeah. Mhmm. And then cold calling and then the the the vehicles. Yep. I'm just curious.

Like, how many people are calling the vehicles?

Matt: I'd have to ask Amanda that, runs that. But, I mean, we we get I think we average a deal a month from that. Yeah. So the crazy thing is, we buy these vans. We averaged about $5,500 per van.

One of the guys on my team, when we made the decision to buy vans, within about a two week period, we had bought, like, 15 of these things. And this guy was, like, driving all over the country going to get these vans and bringing them back because we wanted a good deal on them. Right? And, and we needed them anyway. We needed them to run maintenance anyway.

Mhmm. So but the cool thing is, I would say each van per year generates at least one deal that we make two to three times the amount of money I spent on the van in a in return and profit from a real estate deal. So they

Steve: paid for themselves in one year. It's crazy. Just this all started well, that one's because of the property management company. Mhmm. So because of this misfortune Mhmm.

You've got this great fortune where deals are coming in. Mhmm. And then because you negotiated a deal for became your mini you became a mini Lowe's

Matt: Mhmm.

Steve: You've got cheaper costs, cheaper labor, and now you can compete against all the other flippers. They probably don't like you very much. Yeah. True. Because you pay more.

Everybody make Still make money. Yeah. So what is some I mean, obviously, that helps a lot. Right? Like, this is the it's helped you today.

You've got a massive competitive advantage today. Right. But for the previous, you know, not necessarily in the last two, three years, but the ten years before that, you were still I

Matt: was like grinding it.

Steve: You were so grinding. So talk about it. Because, like, not everyone can go buy an 18,000 square foot building.

Matt: Correct. True. I had to have, you know, you had to I had to have money to be able to do that. But, I mean, I'll tell you, you know, I started out just like everybody else. I I had the disadvantages like everybody else did.

And I was very frustrated like everybody else. In in the beginning, I didn't know what I was doing. I was I was learning as fast as I could, and I was making mistakes every single day, and I was wasting time every day. And so, so but I just I had this thing about work ethic. You know?

I was not afraid to put in the effort, and I was also afraid not afraid to fail time and time and time and time again because I saw other people making money. You know? And so I knew that if I put in the effort and did it long enough, I would get it figured out. And it's amazing. People can accomplish more than what they think they can.

I think I really think one of the one of my best characteristics, especially in the beginning, was the fact that I was naive. I really was. I just didn't think that it wouldn't work. And if I tried something and it didn't work, okay. Well, I guess it just didn't work that time.

I'll try it again. And I'll try it again, and I'll try it again. And I wasn't afraid to put so, like, I I'll tell you. I when I made the decision to learn real estate, and I was reading books as fast as I could, and I was when I was in my car, I was listening to audiobooks or realist anything. I remember I made a I set a little goal for myself.

I said, listen. I'm not going to listen to the radio while I'm in my car until I'm financially free. And I don't know how many years that's gonna take. But if I'm in the car, that's my opportunity. I either need to be making phone calls to you know, real estate related, or I need to be listening to something to educate myself.

It was like my own little training school on on on wheels. Yeah. So I'll never forget. I the day I became financially free, I said, you know, I made a goal. I can listen to the radio again.

So I turn the radio on and I hear a song, and I go out with my buddies that weekend. I I wasn't going on dates. I wasn't hanging with my friends. I was all in. There was no room for error.

It was a 100%, and that's what most people aren't willing to do. But I'll never forget. I start listening to the radio. I decide I can start hanging out with my friends again. And I I'll never forget.

I was out with my friends, and I'm like, man, did you hear this song that just came on the radio? This is awesome. I don't remember what song it was, but they're like, Matt, that song's been on the radio for two years. I just didn't know. Yeah.

I was disconnected. I I was reading books in my free time, and I was listening to audiobooks when I was in my car.

Steve: So I had this issue running myself. I was talking to homeowner, and they were they were talking about something. And they're and they're while I'm talking to the homeowner, right, bonding report, totally screwing this up. And the guy's like, yeah. You know, this is just like that episode of The Big Bag Theory.

And I'm like, I have no idea. What are you talking about? I stopped watching TV years ago. Mhmm. But in hindsight, I should've just accepted it.

Like, this this was just like the episode. Right. A Big Bang Theory. Yeah. Instead of, you know, violating that that bonding report.

But, you know, I was just learning at that time. Yep. Okay. So but there must have been some other things too. Right?

Like, I've, I've heard you say, like, when I saw you speak at Dean's event Mhmm. You're talking about, you know, how to get the best contractors. Mhmm. How to make sure you don't pay them the wrong way so that you end up screwing yourself. Like, what were some of the big lessons there?

Matt: So so one of the things I did was, one of the things that helped me was, I especially in the beginning, I was very, very, very careful with my money. Okay? And I had never been. I had I had always been careless with my money. But I realized very quickly I needed to start thinking about every penny I spend.

Mhmm. So one of the things I did was I I invested in a personal assistant. Now that, her name's Amanda. She still works, with me to to this day, seven year I think it's been about seven years. But the minute that that I did that, I I couldn't afford it.

I was like, I don't want to spend the money. I just was very against hiring people. I was always like, I'll do it myself. And when I did that, my income doubled the very next year because all of a sudden, it's time. Mhmm.

So I see a lot of people afraid to invest in themselves and protect their time. But when I when I hired Amanda, I'm really, really like, I don't know if you've ever taken, like, a DISC test Mhmm. Or a personality test, but my personality style is, like, 99 d.

Steve: Oh, okay. That's obvious.

Matt: I do not have a I do not I do not like, one of the reasons why I didn't, like, one of the reasons so when I went in when I applied for college, I didn't even do the paperwork. I literally showed up to college and, like, well, I'm here. I didn't fill out paperwork because I don't fill out paperwork. I just I hate filling out paperwork.

Steve: Mhmm.

Matt: And so anything like any of that type of work, I just physically can't do it. I can't. So I started I hired Amanda, and I started handing her off all of this stuff that I just was terrible at. And I started having her create, as far as, like for example, every time we'd come up with an idea on how to how to hire a contractor, I'd have her build a script and a fill a form to fill out, like, ask these questions. Before that, I would never do it because I don't do paperwork.

So so it one of the big thing is building systems around everything. So we got really, really good at every time we'd learn something, we'd film a video. And anytime we needed to teach anybody on our team, whether it be somebody that worked directly for us or somebody that worked with us or a virtual assistant or anything, we just send them the video. Here's how to do it. Mhmm.

Here's the forms you use. And so one of the things that really helped propel me to the next level was systemizing everything. We got super, super good at documentation and filming videos, and then duplicating ourselves was very easy. So when I made my first million dollars in one year, I did it with two people. Because of Amanda.

Yeah. Because I had Amanda working for me. And I just missing piece. And how I did it and then this is this is a really important lesson, I think, that everybody should do is what I did was I sat down with a piece of paper, and I listed out everything that I don't like doing or that I'm not good at. And I list out on this yellow pad all these things I'm not good at or I don't like doing.

That became my interview sheet. So when I started interviewing for a personal assistant, that's what I would ask them. Well, I'd say, hey. You know, how do you feel about doing this? What do you you know, do you like doing this?

Or how list some things that you're good at or that you really enjoy, and I matched it up to fit my sheet. And when I hired Amanda, I literally was like, what I thought was forty to fifty hours a week for her because that would have been what it would have been for me. What I realized is her unique ability was the things I'm bad at. Mhmm. And she was able to do those things in ten to fifteen hours a week.

And I learned a very valuable lesson there. I don't I'm not good at some things. And because of that, I'm not fast at some things. Yeah. So that was a people always ask me, Matt, how do I go to the next level?

How do I double? Do you have a personal assistant? No. That's their next thing.

Steve: You said you mentioned unique ability. Did you go through, through a strategic coach?

Matt: Yes. I did.

Steve: Yep. It's a great program.

Matt: Great program. Yeah. I was in it for about three years. Three years? Yep.

Steve: Alright. So Ryan Shalaba has a question. And, he's a big time flipper as well. So awesome stuff. Thirty, forty

Matt: houses a month. How many are you typically selling per year? So, 29 or 2017 flipped 334 houses, in 2018. We slowed down a little bit, focused a little bit more on profit margin. We did 209.

Steve: Mhmm.

Matt: This year, we'll probably be close to 2,018, but this last quarter's getting us prepped for probably twenty twenty twenty will be about 500. Yeah. Based on those fifth the fourth quarter of this year, if it rolls into 2020, that's where we'll be. We're having our probably our best quarter we've ever had.

Steve: And what do you attribute that to?

Matt: Slowing down for a minute and building better systems.

Steve: What'd you have to improve?

Matt: More again, more documentation. So I went to an event and, I was talking to a guy, and this guy had built, probably eight or 10 companies from 0 to a $100,000,000. And he I asked him. I'm like, okay. That year when I was at that thing, we had done thirty three thirty three million in sales, okay, in my real estate company.

And I asked him. I'm like, how do I get from 33,000,000 to 50,000,000 or a 100,000,000? He said he answered the question with one sentence. He goes, go to sweetprocess.com and start processing and do everything document everything. And I was like, that's the solution?

Documentation? And it really is. You have to build, like I mean, it has to be so simplified that if you wanna grow, you have to be able to duplicate yourself or anybody on your team. If they go and they're gone, you should be able to hand over a set of documents and say, this is how the job works. Sweetprocess.

Sweetprocess.com. How do you spell that? Just, sweetprocess.com.

Steve: Really? Okay.

Matt: And so we started documenting everything and to and we're even going to the next level right now. We're we're I'm, like, telling my team, hey. Document this this week. And I get it, and I'll say, okay. So if I hired somebody off the street, if you ran down to McDonald's today, grab somebody from from behind the counter and handed them what you get just gave me, would they be able to do the job?

Yeah. Okay. Well, what was what about this like, a script on how to do this? Okay. We got a little more refining to do.

So I'm I'm asking the questions. I'm having my team build it, but I'm asking the tough questions. And we're just more and more documentation. You should have it built so well that you can hand over a piece of a stack of papers for any job in the company, and that is duplicated as if you were doing it yourself. The only difference is, hopefully, one other big thing we do, and this was a game changer, is we do a disc test on every single person we hire.

Because I have it defined clearly defined every position in the company should be a certain personality type. Mhmm. For sure. And I made a lot of mistakes over the year. I made a lot of bad hires.

And every time you make a bad hire, you take a step backwards. You slow down. You lose ground. And I've made a lot of them over the years.

Steve: Yeah.

Matt: So now we have a clearly defined personality style for every single job in the company. And we we, you know, we put out an ad. We typically use indeed.com. It works really well for us. And as soon as a resume comes across that looks good, the next thing we do is send them the disc test.

And we have them taken. And if they don't fit, it's just we don't hire them.

Steve: Alright. Okay. So, other question, Ryan asked is, do you use in house crews or all GC?

Matt: So we we only have two in house crews of all the crews we're working, which is, like, maybe, like, 10 guys total. So I'm not real big on in house crews. We use a lot of GCs.

Steve: Mhmm.

Matt: That way, we can just get a bid, and it's it's predetermined. The the the downfall when you hire hourly people that work in house, for one, if you do it right, your insurance cost goes way up. And two, you could have cost overruns. Right? So if you hire it and you know the bid and it's $10,000 for the labor on this house, then you've got that set.

Steve: Yeah. And then specifically, how many active at a time? How many how many rehabs?

Matt: We have 53 going right now. I do know that because I counted them the other day.

Steve: And then on a 45 k rehab, what

Matt: does your crew look like? So that's, that's probably a three to five man construction crew on the interior construction. You've got a roofing crew. You've got a siding crew. The interior construction guys put in the windows, but then you got you got electrical, plumbing, and HVAC.

We do all that. If it needs any foundation work, we bring in somebody to do that. So we we sub it out. I mean, everything's subbed out individually. We try to the main key that a lot of people miss is they try to take again, just like I just talked, Unique Ability.

You don't you don't wanna take somebody that's really, really good at electrical and say, hey. Go do some plumbing. You don't want somebody that's good at finished carpentry to go put a roof on a house. Mhmm. And I see a lot of beginners try to do that.

They try to mold the crew into what they need versus finding somebody that's really good and amazing at that thing and let them do that thing.

Steve: Yeah. Well, I think that's the difference between scaling. Right? Correct. And when you're first starting.

Matt: It's the big thing is is the biggest thing I can tell everybody is that if you wanna go to if you wanna scale and you wanna double your business, you gotta figure out how to remove complexity fast.

Steve: Yeah.

Matt: And so you remove complexity by hiring the right people right out of the gate. If you if you hire somebody, the wrong person, and they it's not like if you hire the wrong person, they just don't do as good of a job. Mhmm. They do the exact opposite. The minute that you add complexity every 10, they're asking you, well, what about this?

Or

Steve: calling for paint right now?

Matt: Yeah. Yeah. What about this or what about that? And the minute that you'd say, hey, it's just easier for me to do this myself. I'm gonna fire that guy or get rid of him, you've added complexity.

But if you hand somebody off a task and you give them an inch of information and they're able to problem solve, figure stuff out, out, and make it happen. And all of a sudden, all the complexity is removed, and the job just gets done. Imagine if you could surround yourself with all of those people that remove complexity. Before long, doing 10 deals a month, 15 deals a month is easy. It really is.

It's all That's crazy. Yeah. It's Crazy

Steve: to think that you can get to 10 to 15 deals a month.

Matt: Yes. And and the crazy thing is it can be easier. I I I could probably do 20 deals a month easier than the average person getting started doing one or two because they're they've got too much complexity in their business where I've I've just gotten really good at removing complexity. I just that's just what we get up every day. How do we move remove complexity from our lives?

If we hire somebody and they add complexity, we remove them quickly because it's not gonna get better.

Steve: Yeah. Interesting. And how long does it take for you to get through a forty five k rehab?

Matt: A forty five k re it it just depends. But I'd say, on average, we're at sixty to seventy five days.

Steve: Okay.

Matt: You know, a lot of that depends on something outside of our exact control. For example, if you hire the, you know, the licensed trades, plumbing, HVAC, and, electrical, you're working around licensed trades, and you're you're pushing them as hard as you can. There's a fine line between pushing them really, really hard and we get to the point where they don't wanna work for you anymore. But you kinda have to work around their schedule. And if you do it right and you're pulling permits, you're working with the city, and the city's gotta inspect the work.

So that adds a little few extra days. Yeah. The guys that are doing the quick the carpet and paint lipstick, I mean, that's you know, if we were doing those, we're you'd be talking two, three weeks. Yeah. You know?

Steve: Alright. And then, Jared Barnes wants to know where what events are

Matt: you speaking at this year? Well, I don't have anything on my agenda to speak at. I am doing an an event, November at my office. Mhmm. You know, we're giving everybody a tour.

I I created a rehab manual because we got really good at rehab, so everybody will get that. But I'm doing that event at my office. It's small. There's only a few spots left, and I only it's only 14 people is what I'm allowing. But it's a two day event.

But other than that, I don't have anything else planned right now.

Steve: What software are you using to keep up with that many rehabs and bids?

Matt: That's a great question. And I'll tell you. So I love Podio.

Steve: Mhmm. So we started

Matt: using Podio to do our as our CRM to manage all our leads coming in when we're doing, you know, flip flipping and wholesaling. And we found that it was like, man, we need a construction software. But we didn't wanna use a whole bunch of different formats and try to make them all work. So we program Podio to do everything. So we run everything.

Everything in the company is run through Podio.

Steve: Really?

Matt: All of our rehabs, our turnovers, our maintenance. We have our maintenance vans, our dumpsters that we I was telling you about. All of that stuff's managed automatically through our Podio system's pretty pretty cool.

Steve: It sounds like it is.

Matt: Pretty sophisticated. But I I also put a lot of money into that programming cost. But literally one dashboard, we got everything. So pretty cool.

Steve: Alright. And then, Miguel Martina wants to know, how much are you spending monthly on just utilities? On utilities?

Matt: That's that's a good I haven't even looked at that in a really long time, but I'm sure it's, you know, tens of thousands.

Steve: I'm sure. Alright. So you mentioned earlier. Right? 450,000 houses in Quad Cities?

Mhmm. And you guys are, are cold calling or you're sending 20,000 mailers a week or a month? A month. A month. And you're hitting into the same list?

You're hitting a different list? Because 4,000 out of four fifty.

Matt: It's It's basically, we're we're badgering people to death that you where you either sell your house to me or we're gonna keep mailing you. But I'll just tell you what we're doing. So we buy lists from list source. Mhmm. We buy lists from listability.

And then, we also buy lists from, there's one other, exact data. And so, so we just buy those three lists, and we buy a non owner occupied list, high equity, non owner occupied. And that's what we found has worked the best. But the cool thing is, what we found is, if you buy that list from list source, it's different if you buy it from listability, and it's different if you buy it from exact data. So we buy all three.

We test we run all three, and we run, we run a third notice postcard. That's pretty effective. And, also, the Google view. The Google view is one that we've just started using this year, and it's crushing right now. I think that'll probably become our top postcard.

I also used a we created our own. When I did when I opened up my company at the new address, my 18,000 square foot building, the mayor came and they did this big ribbon cutting. So I created a postcard out of that, and we send that one as well. And that one will produce a little bit too. So, so, yeah, that's that's the postcards we're sending.

And we'll just alternate. We alternate list and postcard. And but, I mean, again, you're resending people all the time. But the amazing thing is, you know, you can't buy a list today and think that that list is still good in a year. There's a lot of transactions happening right now.

Steve: Mhmm.

Matt: So you'll see if you buy a fresh list let's say, you buy this list and you beat it up for two months and you're mailing it, you know, every week or every other week, couple months later, you rebuy that list. There's a lot of new names on that. You wanna rebuy every two, three months and start running them again.

Steve: So you're cold calling, but you're not texting or let or leaving email voicemails?

Matt: Yeah. Yes. We'd also we so what we do so we do RVM. And, but what we're doing is we're using RVM to rehit the leads we've already contacted. So once a month, we go back we'll go back a couple years.

And anybody that hasn't taken you know, had hasn't asked us to take off the list that we've already contacted, we've maybe been to their house, we made them an offer, We RVM them.

Steve: Once a month?

Matt: Yeah. Once a month for once a month. Sometimes it stretches to two months. Mhmm. But we're rehitting.

I mean, that's one of the main things that I think a lot of people miss. It's a follow-up game.

Steve: Mhmm.

Matt: If you're not following up with your leads, if if you talk to somebody today, I bet you I bet you we're at about 20%. About 20% of the people we contact every month, we buy their house. The other 80%, we need to talk to those people. We need to hit them every single month for six months. And it we buy a lot of houses six months later.

I mean, way more six months later than we do today.

Steve: That's a huge nugget, sending RVMs to people that you've talked to before.

Matt: Yep. So we do that. That always brings in leads, always. And then, we're getting in more we're just literally just this week and last week, we've started doing some texting. Yeah.

So I can't really give you too much data on that yet, but, you know, I I'm hoping that pretty effective as well. You know? So

Steve: so let's see. Do you have, an acquisitions manager in your office?

Matt: Yeah. We have a lead manager and acquisitions manager. Yep.

Steve: Okay.

Matt: One funny thing I'll tell you a funny story about RVM. First time I ever did RVM, I actually learned that because Sean Terry was speaking at an event I was at. Mhmm. And I was like, man, this is the coolest thing ever. I gotta try it.

So right out of the gate

Steve: I've heard this story.

Matt: Right out of the gate, we we try this RVM. Okay? First of all, we do it wrong and didn't didn't follow exactly everything, Sean. We messed something up, and my phone melted down. I mean, our phones, we we were like, we gotta stop this thing.

There's so many leads coming in. So we did it right and actually followed what Sean said. And then we resent it, and I got a 12 unit building under contract that we wholesale and made a $137 on. I had $200 in total costs in this RVM, and I just made a $137 on wholesaling this 12 unit building. I was like, I'm in.

I'm in on this RVM stuff. We, but now we found that it works really, really well with just the follow-up stuff.

Steve: Yeah.

Matt: It kinda makes it automated. Again, we run everything through Podio, so we kinda have a automated system set up through that.

Steve: And then, Jay Stiller wants to know how do you balance work and life since you've grown so

Matt: much in

Steve: your business?

Matt: That's a great question. And I was telling before we went on the air here, this year, I decided to buy or last year, I bought a lake house. And because I always had this guilty feeling of if I wasn't working, I felt guilty. I was like, I'm I'm taking time off, and I feel guilty, and I don't know what to do. And I don't know.

It was really weird. It's like something that maybe I got from when I was a little kid or something. So I made a decision to buy a lake house. We made we bought a lake house only an hour from where we live. So you get there, and you feel like you're a world away

Steve: Mhmm.

Matt: But you're only an hour away. So I this year, I've went to the I go to every about every weekend, I go to the lake house for two, three days, and that helps me balance. Because I I basically shut my phone off. And I don't get good cell phone reception there anyway, so it doesn't do me a lot of good. So I I shut my phone off, and I just focus on family and personal stuff that I wanna do.

And that that helps me balance. So for me, it was just getting out of the environment

Steve: Mhmm.

Matt: And just little getaways like that. So Gotcha.

Steve: Rick Boyd wants to know how much is it for the event in November 1?

Matt: $62.50. Again, there's,

Steve: it's only $2.50. That's not bad.

Matt: That's not bad. No. $6,250. Again, it's gonna be me teaching the whole thing, two day two full days. Got a lot of I got a lot of fun stuff planned too, so it's gonna be a good good time.

Steve: Adam wants to know if you can talk a little bit more about your follow-up process.

Matt: So I set this up quite a while ago. But, basically, the so two things. One is my if if you hire a good acquisitions manager, they should be following up some as as well. Mhmm. Not all of them some people some people disagree with that.

Some people will say, hey. I just want my acquisitions guy working on the brand new stuff. But there's a lot that goes that's said about having your acquisition guy follow-up on old leads because their goal, they really are. But the on top of that, we help him with this RVM. So what we do is we just basically send out a an e a voice mail.

Again, the r the way the RVM works is it drops a it looks like you missed a call and you see, wait. I got a voice mail. Hey. Hey. This is Matt's just wanted to check back with you.

We talked to you a while back, see if we could buy your house. Didn't work out. We're still interested. Give us a callback. And then that you then they call that back, and that goes into another voice mail.

Hey. This is Matt. Sorry. I missed your call. I'm on the phone with another seller.

I'll call you back as soon as I can. Leave me a message. And then the people that actually leave the message, that's who you talk to.

Steve: Mhmm.

Matt: But that's the whole system. It's very simple voice mails like that. You have to do two. Otherwise, you get bombarded because the first voice mail you drop. I mean, so many people respond, but you only wanna talk to the people that take the time to leave the second voice mail.

Steve: Mhmm.

Matt: So then so we hit everybody. We go into our system. We hit everybody that's in our system that we've talked to before that has that we've talked to before that has you know, we've we've sent them direct mail, cold calling, whatever. They've come into our system. We've talked to them about buying their house.

So everyone, everybody in that, it could be thousands of names, They all get dropped to RVM until they say, don't don't contact me anymore. And those leads come fresh, and then we jump right back into it. You know? It comes to the top. Hey.

This guy wants to sell now. Six months ago, he wasn't motivated. Now he is. And we re remake a new appointment to go see to go see the house again.

Steve: Cool. And then, Paul Richard Pierre wants to know where are you getting your negotiation skills from?

Matt: My negotiation skills, that comes from, you know so one thing we did do, about a year or so ago, we I sent my acquisitions guy, and I went with him to the John Martinez training. Mhmm. Great training. John's a really sharp guy. But before that, I I learned, I learned by by doing, by almost by necessity.

I would say something, and it would work. And I was like, oh, okay. I gotta start I gotta repeat that. And I created a whole bunch of these one liners. And I I could get to the point where I just step into a a lead back when I this is back when I was doing everything myself.

Steve: Mhmm.

Matt: I could just repeat one liner after one liner, and the next thing I know, it kinda just built its own script, and then I would get deals at discounts. You know, one of the big things I used to say back in the when the market had crashed was I, you know, I'd meet with a seller, and they would be have an asking price that was too high, more than I could pay. And I would say, you know, mister seller, I'm sorry, that my price is too low. It's it's not me. It's just the fact that I can get a foreclosure down the street for half the half of what you're asking.

And that always sparked in their mind. They're like, they never even realized they competed against foreclosures.

Steve: Mhmm. It

Matt: was like again, it was like, I'm sorry. It's it's not me. You're just competing against the foreclosure down the street. And that sparked their mind, like, wait a minute. I am competing.

Those are cheaper. And those little types of one liners are what I kinda built one after another to the point where the next thing I know, they're like, yeah. I wanna sell my house.

Steve: Yeah. Interesting. Let's see what else is there. Have you picked up deals from wholesalers that did not close the contract?

Matt: Like, you mean the wholesaler

Steve: Wholesaler, I guess, couldn't close, couldn't perform.

Matt: Yeah. I mean, that stuff. I mean, here's the deal is it's real estate. Right? I mean, that real estate isn't isn't perfect.

I'd say a very small percentage, maybe one or 2% of that time that happens. But, typically, that's because title can't get cleared. And that really doesn't have anything to do with the the wholesaler didn't necessarily do anything wrong. It just maybe the seller had some weird thing on the title they couldn't get cleared up. But I will say, I'm I'm very good at sticking with this thing long term.

I closed a deal a couple months ago that I had under contract for over two years, and that's how long it took for them to clear the title because there was, like, eight different people that owned the house, and they were all old. And every time they get ready to close, one of them would die because they were, like, you know you know, had owned this house for a long time. And now they had to start the process over again. And so, you know, it took me two years to close it, but I still closed it. I mean, the greatest thing about something like that is is you put it under contract two years ago, and the market's risen.

Steve: Mhmm.

Matt: And so all of a sudden, they ask you, like, are you sure you wanna close this? I'm like, yeah.

Steve: I guess so. Yeah. For sure. Maybe. Mhmm.

Alright. It's pretty wild. So, monthly marketing. What are you spending in your marketing?

Matt: We spend about $20,015.20 grand in marketing every month. That's not terrible.

Steve: No. The next number is kinda scary. What's your monthly overhead between all these different operations?

Matt: That's a scary number. So we pay out, between what we pay contractors and what we buy materials every week, about $200 a week. So it's it's close to a million dollar a month operation. It's not for the faint of heart, for sure.

Steve: Does that include the property management and the trucks and the dumpsters?

Matt: That's everything. Yeah. We bet it's about about $200 a week. Now that's not counting my mortgages. I mean, those kinda pay for themselves with the rents.

I'm just talking about the overhead. Just run your business. Yeah. It's just and, again, that's pretty scary if you sound if you if you're new. But I didn't that's not how I operated ten years ago.

Right? I mean, at one time, there's a there's a Panera Bread in in Moline at the corner of 41st Street and, Avenue Of The Cities. And there's one table that in that Panera, there's an outlet right next to it. And that was my office for years. I would get up in the morning.

The reason I picked Panera instead of Starbucks is because you could refill. And I don't know. Maybe Starbucks allows you to do this now. But back then, you bought one cup of coffee, and you could refill it. You didn't have to pay.

Steve: That's the grind.

Matt: So so that was that was what the world I was living. I drank tap water, and I and I wanted free Internet because I didn't have Internet at my house. Mhmm. And I wanted I liked coffee, so I would go there, sit at that corner, and I work all day long in that corner. And so, my overhead back then was nothing.

You know? So if I made, you know, a 100,000, 200,000, 500,000, or a million bucks a year, when you don't have overhead employees, you get to keep all that money. Right? I I have to do, you know, 20 something million in sales now to be able to make a couple of million bucks.

Steve: Right.

Matt: Right? It's a different deal. And people will say, well, I don't I don't want all the overhead, and why do you do that? And wouldn't it be easier just to scale down and, you know, still make a lot of money? But it's not about that.

It's something flips in your mind when you start hiring employees. And now all of a sudden, you get to know your employees and their families, and they're sending their families to college, and, you know, they're buying new cars, and they're living in nice houses, it becomes less about you and more about the company and everybody involved. And a company's no more than your employees.

Steve: Mhmm.

Matt: A building's not a company. A sign on the door is not a company. The company's the employees.

Steve: Mhmm.

Matt: And so, I get a kick out of that. I love one of my favorite parts is taking somebody that comes into our our lives through as an employee and watching them grow as a person and grow as a like, they get so good at their job. I sit back in amazement. I love starting somebody out. Out.

Like, they're making $10 an hour for me doing running and getting cups of coffee or or doing, you know, just simple tasks and watching them grow through the company. It's it's one of my favorite things that we do. It's Yeah. It's literally something I sit back at the end of my day, and I'm like, man, that chick is, you know, badass, you know.

Steve: It's incredibly fulfilling, and I have never had any idea when I got into it that it would be. Yeah. One question I didn't ask you earlier is what is I mean, how you're spending all this money, all this money, all this operations. You got all these go ongoing expenses. How much are you making per flip?

Matt: You know, we make about $18 on average. I think 18,500 was the last time I checked.

Steve: And what's your average what's your median price out there?

Matt: $120.

Steve: Yeah. 100. $120?

Matt: Yeah. Cheap. Jeez. I I I know. Everybody's like everybody's like, me and my buddies that all own our own companies, we're always like, man, we got the greatest thing ever.

We live in, you know, what what is considered in our area, like, super, super nice houses, and they are, but they're not expensive. Like, what I spend when if I spend a million dollars on my house, it's probably a 2 to $3,000,000 house anywhere else. Course with over an acre. And but that's the beauty of being in our area. So, the average starter home is, you know, a $120,000.

Steve: Yeah. It's crazy to me because, like, I'm looking at your prices like Californians look at our prices. Right.

Matt: Right. It's totally different. Like, somebody from LA will be like, hey. You can't do what you I can't do what you do in LA because, you know, the price of a house is 800,000 for a starter home. And I'm like, actually, you can.

And I've I've taught many people how to wholesale and all that out there. Your the difference is if you create a 2% or a 5% spread on a house that's 800,000, and I do on a house that's a 100, I make $5,000, and you make $50,000.

Steve: Yeah.

Matt: Right? You don't have to do as much volume to make as much money. That's why, typically, now, we we try to focus on wholesaling apartment buildings, versus houses. Because if I can wholesale a house and make $7,500, typically, it's better for me just to take it down, buy it, you know, fix it up and resell it, make try to make $18.20 on it.

Steve: Yeah. Alright. And, Brutus makes a remark that thank God for your girlfriend. I know. So you should probably send her a flower or something like one year or something just to let her know that you're appreciated.

Matt: I haven't seen her in years and years and years.

Steve: Well, let her know that you appreciate her. Yeah. Even that for her Right. This would be

Matt: a That's true. It's totally true. That was the one thing that that got me thinking.

Steve: Yeah. And Warren Adcock wants to know, whatever happened to the property management lady?

Matt: We have no idea. We have no idea. She's been gone for a really long time, and nobody's really heard from her. So I don't know.

Steve: You know, it's really not unusual for that to happen to property management.

Matt: You know what's funny is I've I literally have heard multiple people tell that exact same story. It's terrible.

Steve: So in the building we're in right now, in the next building over because my office used to be in the next building over. And the guy upstairs swindled 300 k. Just and it wasn't swindled. It was just really bad management. Horrific management.

And, I mean, he went to jail he went to prison. Yeah. Right? Because, you know, you can't lose 300,000 of people's money. Right.

Now that was of many clients.

Matt: Right. One client.

Steve: Right. But still property and management, that stuff happens. It's sad.

Matt: It's all yeah. It's all the time, and that's that's the that's the one piece that I told myself I was limbering and let happen again. And and that's been been been the anchor of my company. So

Steve: So what's your biggest struggle today? And you got a lot of really good things going on right now. What's your biggest struggle today?

Matt: You know, I would say we always struggle. We you know, when you grow, it's always labor. It's, you know, it's it's labor. Right? You know, if you're rehabbing houses, it's it's construction labor.

If you're trying to grow your company and you're just trying to find employees to hire, that's a process. Luckily, we've got that dialed in. We have a really good process for, screening out people and hiring we hire amazing people. My company is filled with total rock stars, which is why I'm able to do what we do. But I'd say right now, one of the biggest struggles is just construction labor.

But all that changes when the downturn hits. I tell my team all the time, just be patient. I know you're working really, really hard to find more, you know, electricians and plumbers and all that stuff. But as soon as the downturn hits, they call you. Yeah.

They they knock on your door.

Steve: Right.

Matt: In 02/2010, I I never I never searched around for construction labor. They called me every day. So it's just the phase that we're in.

Steve: Yeah. That makes total sense. What are your top three books?

Matt: Top three books. Well, I I I'm I'm real big into personal development. Well, one of the things I learned my sales sales skills, through was a book called How I Raise Myself from Failure to Success in Selling. That book's been around for eighty plus years. But literally, it's so simple.

It takes a couple hours to read and there's so many good nuggets in it to to learn how to sell, that I always I've read that a million times. I like the the magic of thinking big.

Steve: Mhmm.

Matt: That's another another really You're definitely living that life. Yeah. I mean, so I really like that one. And I'm I I like, books that are other entrepreneurs. So I don't know if this is my top, but it it's in my mind because, I I read the book Shoe Dog a few months ago.

Mhmm. And I love those types of book as well because there is you always wanna be learning, and you wanna be learning from books, from how to books, 100%. But you need to mix in some books that inspire you to to see what other people have done. So, like, the book Shoe Dog was an amazing story of how Nike, you know, came about and where it's at today. So I like that stuff.

I like books like, you know, Elon Musk. If you read a few of those. I like reading that type of thing too.

Steve: Yeah. Alright. So I'm gonna let you collect your thoughts. One thing you wanna leave the listeners with while I make a few quick announcements. So guys, I'm gonna be in Biloxi on Friday for a real estate run up live.

If you guys wanna check that out, go to bitly/rerlive. And then I'm gonna be finishing the year in New Orleans with Chris Ruh for Skillathon, December. Go to bitly/ two zero one nine skill, if you guys wanna check that out. And then Max and I, we had our workshop, a couple weeks ago, and we were blown away by the reception we've had. We have a lot of people blowing us up.

We're charging 5,000 for two and a half days. If you wanna find out how you can come for free, go to disruptors.com. That's disruptors.com. Recently learned there's a guy with spells it with an e. There's also a lead capture site.

Jerk. And next week, we've got Don Costa from Fresno, another big time flipper. So check us out next week. And with that, last thoughts.

Matt: I would say, my last thoughts for everybody is, you gotta have a just a serious persistence to you that, you know, no matter what it is, there's a solution for, literally, for every problem out there. Name the problem. There's a solution. There it's somewhere. Somebody somebody that you can bring into your life or a book you can read, you'll find the solution if you ask it enough times.

So I would say be persistent with finding answers, and ask a lot of questions. And so that's one of the big things I would also say too. If anybody ever wants to follow me on I I I don't post a ton of stuff on Facebook, but I do I've been starting my Instagram, and I've been posting a lot of videos on I try to do, like, a daily, like, how to or ins inspirational things. So I'm at at real estate matt on Instagram. Follow me there.

If you guys wanna learn a little more about what I'm doing. I always post pictures of my office and some of the people and and some of the stuff we got going on too. So Yeah. I just love I love interacting with people. I love real estate training.

I've done a ton of it. So Yeah. It's fun stuff.

Steve: I think definitely what we're talking about earlier as far as there's gonna be a way. I think, you know, you're talking about your '99 d. Mhmm. I think part of that is you got an indomitable will. Yep.

Right. For sure. You're gonna you're gonna get through that wall.

Matt: It doesn't matter. I'm I'm dying of exhaustion or I'm getting it. Yeah. That's it.

Steve: So I love it. Alright. Thank you guys for watching, and thank you. This was an incredible show. Thank you.