Zachary Kepes Shares How He Built a Personal Portfolio of 150 Single Family Homes and Buys 8+ Houses/mo

Steve Trang: Hey, everyone. Thank you for joining us for today's episode of Real Estate Disruptors. Today, we've got Zachary Keeves with Zach Ventures, and he's here to share how he's acquired over a 150 rental properties and is consistently buying eight to 10 houses per month. If this is your first time tuning in, I'm Steve Tring, broker and owner of Stunning Homes Realty, founder of the Offer Fast Homes app, the only app you'll need for wholesaling. And I'm on a mission to create 100 millionaires, 100 millionaires.

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First question, real simple. What got you into real estate? Estate?

Zachary Kepes: Yeah. Great question. First of all, thanks for the opportunity to come on the show, and thanks for PACE, Morby and his beautiful wife, Laura for the introduction. Yeah. Yeah.

That's awesome. So I woke up in real estate. My grandfather was a developer. I'm a Midwest guy. I used to travel around with him, you know, a few times and see his developments

Steve: and Mhmm.

Zachary: You know, was, always admired his passion in entrepreneurship. My father also an entrepreneur and attorney. My other grandfather is all, entrepreneurs. So I learned in life early on, you always wanna kinda work for yourself, you know, build your own fortune. I was living out in Australia, and I was gonna start my own financial consulting business.

I didn't know what it was. I'm an entrepreneur, like I said, at heart. Mhmm.

Steve: And I

Zachary: got an email from my cousins, about a joint venture opportunity to come out to Arizona, to buy distressed assets in 2002. And I looked at the email. I said, you know, talk to me about the opportunity. What's the upside potential? And made a decision to fly from Australia, to Arizona and, started, you know, nine days later licensed and, you know, hit the ground running.

Steve: Nine days late later licensed.

Zachary: Nine came out on 08/05/2002. Nine days later, went through the crash course, very focused, got my license, and started hitting the ground.

Steve: That's awesome. Yeah. I tell everyone, like, I got licensed in two and a half weeks. You can't do that today. No.

But, yeah, nine days, that's that's really impressive. Okay. So talk to me about your first deal. So it was 2002, you said?

Zachary: 2002 came out, had capital because my cousins were some of the largest buyers in, the St. Louis area. Mhmm. So that was a huge bonus. I remember, you know, I was reading newspapers and looking at classifieds, and I saw this deal down in South Phoenix on Rosier in 24th Street.

You know, tough neighborhood, 2002, drove down there, you know, ghetto, bust open the front door. There's some bums living there with, you know, garbage disposal, whatnot, lighting fires. And, I remember $60,000, block home, figured you can't go wrong. Right. So I bought the deal.

I think I made about $15, and, it was kind of the whole start of the career. It was actually with John Rosenberg and Bob Levine through Love Rose Real Estate.

Steve: I don't know

Zachary: if you remember those guys. Do you know what those guys are?

Steve: They're commercial, aren't

Zachary: they? They're commercial, but they have a a residential wing. Oh, a residential wing. Yes. So just randomly.

That was the first. In fact, I ran into John the other day.

Steve: Small small world. So I have a couple of, personal records, and those records are lowest single family home sold. And all three of them back to Rosier. Wow. We got we got a 17, a 21, and a 23.

And that was back in the REO days, right, working for Bank of America. And you go into these properties and wow. Yeah. Land value. Land value.

Zachary: But, I mean, at that even those prices, we go back and buy those a 100 times over today.

Steve: Oh, absolutely. Without a doubt. So, you you guys already bought that property off Rosier. What were some of the early struggles?

Zachary: Really just kind of learning the business. You know, I was fortunate my uncle was out here, and my cousin joined us, and we started, again, finding good crews and reliable people. Finding deals is always the struggle. Right? It's all about the acquisition.

So, I mean, there's no secrets. Back in the day, it was about door knocking and looking at distressed deals and making phone calls and just grinding. I mean, it's really obviously, the the business has completely materialized into more, you know, cold calls and sitting behind a desk today, but I'm still a huge advocate for going in the field. People ask me, hey. You know, what do you do to get involved in the in these dealers?

Go out in the field. Look for anything distressed. Knock doors. Talk to people. Get out get out of your car.

You know, create a presence, and and just ask the question. You know? Is this distressed? Do you wanna sell? I'm a cash buyer.

Right. You know?

Steve: So that first property, was that a flip?

Zachary: That was a flip.

Steve: Okay. Yeah.

Zachary: All the properties back in the day were all flips. We didn't really have a buy and hold strategy.

Steve: Mhmm. It

Zachary: was more about turning those dollars back in the day.

Steve: So you were flipping for how long before you got a change in strategy?

Zachary: Sure. I mean, basically, with the joint venture with the cousins and the family, we did it, from 2002 to, basically, till the market imploded in 2007. Yeah.

Steve: So it

Zachary: was a wild ride. You know, we did first year, 60 deals. The next year, probably a 100, a 150. Even at the time, we had a company called one eight hundred no agent, which was our platform. We're spending $5,060,000 dollars a month on advertising.

Right. We competed with the, you know, Homevestors guys, the We Buy Ugly Homes, and and those guys, which were all buddies now. I mean, at that point, you drive out the house, you'd see the We Buy Ugg Homes cars and seven other buyers sitting there with the suitcases. And who's gonna get the deal? I mean, it was a massive competition, and and it was a lot of fun.

We befriend each other. Oh, you got that one. Sell it to me for 5,000 more. You know, you create that camaraderie.

Steve: But, of course, I'm not interested. That's brilliant.

Zachary: Do you

Steve: guys still own that?

Zachary: No. No. We our joint venture was done when the market imploded, and that and that's it. Today, I actually spend $0 on advertising. So it's all about relationships I've cultivated from, you know, the early days to today that I still have agents and wholesalers and, you know, you name it.

Steve: And we'll definitely get to that. Yeah. So, so it imploded. Alright. And at that point, did you own any rentals yet?

Zachary: No. I had zero zero rental properties. Okay.

Steve: So then you you you shifted gears.

Zachary: Yep. What happened in 2007? 2007 and and you I believe you started in 2005. I started in 2007. So you started 2007.

So the really I mean, you were just watching prices tank. I kinda sat on the sidelines saying, what are we gonna do? Everyone's, you know, pulling out of the market. Mhmm. Banks don't wanna loan any money.

There's a lot of fear. One of my favorite quotes, Warren Buffett says, when people are fearful, be greedy. When people are greedy, be fearful. Yeah. Well, there's a lot of fear.

Again, there's no capital available. No banks wanna loan anything. So I kinda sat on the sidelines for a few years and traveled the world to kinda figure out what do I wanna do? I mean, you can't really you can start dollar cost averaging, but when is it gonna hit a bottom? Mhmm.

And I remember strategically in 2009, I'm sitting there having some Vietnamese food, my favorite restaurant talking to my buddy, and he's like, man, this real estate, you can buy those same houses you were buying for, you know, a 150,000 or 200,000 or now trading at $30,000. Right. Start investigating rents and realize, jeez, these cap rates are serious. You talk about your book. Yeah.

It's astronomical. So I said, okay. So if I go out, raise my own capital, and and pick up some money and, pick up some deals to flip or hold Mhmm. You're getting a 20%, 25% return. These are you can put 25,000.

You're putting more money in rehab than you are buying the house virtually.

Steve: Yeah.

Zachary: And if you're in a house for 50,000, you're renting out for a thousand, there's, you know, 20% yield. Pretty selling. Yeah. So all of a sudden, that was the buy signal. Again, Warren says, hey.

People are fearful. No one's even writing offers. All the REO agents. Hey. Any offers?

No. Great. Submit 25. Well, you got the deal. It's buying everything and anything I could get my hands on.

Steve: Yeah. And we've had multiple clients that we were working with at that time that we were writing offers, buying houses for, like, $30.40 k. It's like, man, I wish at that time I was liquid. And so I know the next recession gotta be ready for that.

Zachary: Hopefully, that's not coming anytime soon.

Steve: But Anytime soon. But it's gonna happen eventually.

Zachary: It might?

Steve: So how did you raise your capital? Pace wants to know, how did you raise your capital at that time?

Zachary: Sure. 2009. I've always had, been a transparent, good business person, never screwed anybody in my life. In fact, I got burned a lot of them capital that I made in from 2002 to 2007. I invested in, alternative markets.

Steve: Mhmm.

Zachary: And, unfortunately, you know, it didn't pan out for me. But every there's always a lesson from, you know, every experience. And that is, you know, about documenting, any investments, doing you know, getting deeds of trust, being being first positions. At that point, I was more, you know, laissez faire with the money and hands off. So when I went out and I I called every wealthy investor I've ever met or or friends of family or friends, hey.

I have this opportunity. Here's the yields. We're gonna go fifty fifty. So I did what's called OPM, other people's money. Mhmm.

They gave them first deeds of trust on the property, just one and one. And I said, hey. First opportunities that come up, you commit. We're gonna utilize this capital in this deal. I'm gonna provide full reporting and transparency again.

And the goal is to flip and turn those dollars. And that way, I would just go out and get as many deals as I could, and in the interim, the capital was coming. Alright. So that's how basically it transpired. Just one off, you know, from individuals, friends and family.

And any well, I mean, I would be in a room over Christmas. I'd meet some wealthy people, write their names down on the beach, fly out to Toronto, fly out, you know, to Michigan. I flew to New York. Wherever I could go where I could get a a lunch meeting and know somebody who was accredited investor that had, you know, disposable income, I wanna get in front of you. And I'm gonna show you the opportunity.

I'm gonna show you my background and lever all the contacts and and, everything I've done in the past.

Steve: Wow. That's awesome. So you started buying in 2009. So you took two years off.

Zachary: Yeah. You

Steve: started buying 2009. Yeah. And then has that been consistent throughout? Has there any shifts or adjustments since then? Yeah.

I mean,

Zachary: obviously, pricing has been a major shift for many. You can no longer have $30.40, $50,000 deals. But what happened was, kind of serendipitously, right place, right time, and just kinda taking the risk, started buying, and then I get a knock on my door. Literally, people calling me saying, hey. Do you wanna sell some of these homes?

We started building sizable portfolio with, you know, other investors' money in my own capital, and a company represented a billion dollars. Oh, we were gonna buy a billion dollars. Turns out my old neighbor in DC Ranch was, one of Jay from Colony Capital, Jay McGee. He's like, yeah. No.

I'm running this company, and we wanna buy twenty, thirty year homes. I'm like, show me this money. I need a proof of funds. You know, billion dollars seems a little excessive.

Steve: Yeah.

Zachary: So I remember I went down in their office. The first hedge fund that came to me said, yeah, we're gonna pay x for these, you know, 20 homes, 25 properties. And if things go good, we'll buy another 20, another 20, and then more hedge funds are knocking. And it was crazy. February.

So I started selling into the market with, irrational frenzy of the hedge funds. So everything the dynamics change you before you just buy a single family homes and say what kind of rent are you getting when people started throwing around cap rates on single family family homes, that was a major transitional time period. I mean, you're like, cap rates, isn't that used for commercial? Not really single family. So, really, the whole REITs and and these private, you know, trust coming in and buying hundreds of thousands of doors really changed the dynamics of the market.

It also made it really exciting if you were, you know, early mover, adopter.

Steve: Yeah. And that's around around the same time you were quoted. I think it was The Street. Are you talking about about the the institutional investors coming through? Yeah.

Zachary: And The Wall Street Journal.

Steve: Yep. Yeah. And we had, I I remember doing this distressed properties, right, negotiating short sales. I was like, okay. Let me see your proof of funds.

Right. $86,000,000. Like, could you not just put, like, a million dollars Right. Into a different bank account? Exactly.

Zachary: And, like, these guys are for real. Let's do this. And it was fun. I mean, basically, they said, hey. We love what you're doing.

Can you just use the same paint color, same stuff? So I'd have stuff in escrow basically presold Mhmm. You know, to these funds saying, we'll take it. Just finish it the same way you've done the other ones. We've done inspections.

And part of the way that I differentiate my business model in terms of my rentals and everything moving forward is to spend money to make money. There's a lot of people out there in their models. Let's do some lipstick. Let's get in and out. You're not gonna pass any inspections.

You're not gonna build a good brand. You're not gonna have, you know, a good reputation, etcetera. So, I'm of the believer to spend money to make money.

Steve: Sure.

Zachary: And it works.

Steve: So did you see at that time you had your partner with people? Yep. Right. And you sold off these properties, these hedge funds. Did you then liquidate all those properties?

Liquidate all the partnership stuff.

Zachary: So I eventually, every, you know, every couple of partner deals, you had enough to buy your own, do some more, you buy your own. Anything that came in, you did your own. I was lucky enough that I came across one large individual family for didn't even know them before. And I asked the question, which is my big things. Always talk to people who do you know with capital?

Who wants to invest in real estate or buy notes or, you know, who's got liquidity or wants diversification? And so I did a cross sell with a realtor, and she she was in a high net worth community. I said, who who do you know? I know you know people. She didn't know much about notes.

She introduced me to a family, and, a guy flies out to see me. And I remember I pick him up in, Ford Explorer Sport. I don't drive around some fancy cars or, you know, pretend something I'm not. Picked him up, gave him the lowdown of my business. I don't even think I cleaned the car.

I didn't know much about the guy, but I'm

Steve: like, let's spend the day.

Zachary: You wanna come meet me? Come meet me. Driving around. He's like, I love you. I like your business model.

I like your ethics. You're just, you know, salt of the earth and straightforward and transparent. I want to invest in your business. I'm like, Well, I just really want to sell the notes. He goes, I'll buy all these notes, but I want to invest in your business.

I'm like, Well, how much are you you talking? He goes, Let's just start with, you know, half 1,000,000. That time, that's pretty good. I can get you, you know, six properties or whatever it was. Yeah.

Okay. And then we immediately in that first month we sold, you know, six deals. He's like, Go to a million, go to 2,000,000, you know? So I was lucky enough to come across one really large guy to do those deals with. But ultimately, you know, paid everybody off and kind of just run my own show now.

Steve: So now so when was the exact day that you went fully, on your own? Sure.

Zachary: I mean, I was on my own except for the fact that, a 100% of the financing, if I get huge deals and I want to bring somebody in, I have that. And I'll continue to engage, those high net worth families and other people that invest with me because you never know when major opportunities come around. I'm not a greedy person. I don't say, hey. Let me just get every single deal.

But in terms of building my own portfolio was probably around, you know, two well, starting really in 2009 and up. I, you know, started accumulating and just isolating those deals for myself, in terms of buy and hold, but really a 100% autonomous, you know, probably in the last couple of years.

Steve: Okay. So in 2009 so Pace wants to know again, 2009, did you start when you started all over, you were all by yourself, solopreneur?

Zachary: All by myself. Yeah.

Steve: Okay. So, Colin Ferrell wants to know, are there any tips for developing connections with acquisition routes for hedge funds?

Zachary: Yeah. I mean, yeah, basically, you can go it's all public information. You see what, and large cash buyers and you're seeing the the homes that come in through there, the progress residentials, the Cerberus, all those guys.

Steve: There's

Zachary: the local offices in those areas. I'd literally just go right into those office. If you have the deals, then, you know, you're a huge asset to them. So you can come in and say it's all about getting the deal. When you have deal in hand, everything else will follow.

We all know that. So everyone's deal.

Steve: Nothing else matters.

Zachary: Nothing else matters. Everyone says, do I need the capital first? I said, tie up the deal, and then everything else will fall into place. So I would say, come in there, build those relationships, but they'll wanna talk to you, especially if you could say, hey. I can bring x amount of deals or what is it that you want.

I can be an asset to you and understand their business

Steve: model. So you got was that a

Zachary: 150

Steve: rentals? 150. Yeah. Okay. So the 150 rentals, you're managing them Yeah.

Zachary: Yourself.

Steve: Yes. That sounds like brain damage. Like, talk to me about that.

Zachary: Yeah. Everyone says how many people I I have a full time bookkeeper. I'm an assistant, you know, and whatnot. And I have full time handyman, basically, two right now. Mhmm.

And I have great crews. I run six crews pretty much full time. Okay. The key, component is making, the payment streamline. Nowadays, you could do, you know, Zelle.

There's all these online apps, but I'm a I'm a old school guy. I give everyone deposit slips. You go to Bank of America. I don't accept cash. I'm a fully reporting and transparent company, which comes into play for, you know, the future in terms of, leverage in banks.

They wanna see a lot of these small guys go out and collect cash, and they say, let me see your your your deposits. Yeah.

Steve: It's a good scheduling.

Zachary: Exactly. I wanna see everything. So I I hey. You wanna pay? Great.

You wanna pay cash? Deposit in my Zac Venture. So everyone can deposit in, the bank, fully reporting, in terms of streamline and rent. So it's all coded. It runs through.

The bookkeeper gives them the credit. So there's none of this, hey. Let's show up at the office. Let's you know, there's none of this hands on stuff. And like I talked about before, before, building a good quality product.

I mean, again, I think I differentiate myself in the sense that I spend good money on these homes. I'll put in $30,000 on a Maryville home, for example. Mhmm. But most people wanna spend 10 or 12. We'll do the plumbing.

We'll do the AC. We do the roofs. We do dual pane windows, to build a durable long term product to mitigate, future calls. If, water heater's on the brink, just replace it. The guys are already out there.

It's a better economies of scale to spend the money up front Mhmm. And, again, mitigate those brainless calls. You're gonna spend more money going back and tracking and pulling up tile, fixing plumbing when you can do it right the first time. When it's vacant? Right.

When it's vacant and just get it done. You're not disturbing tenants and headaches, etcetera. So, again, I mean, if somebody needs something, they can text me, and it's all about those relationships and trust. They can

Steve: text you, not even your assistant.

Zachary: They could text me. Anyone can call me or text me anytime I'm available.

Steve: So I saw, I was going through your Facebook and your and your Instagram. So you got is it Jones? Buddy Jones. Buddy Jones. Talk to me about Buddy Jones.

Zachary: My dog or or the collector?

Steve: The collector. That guy looks right.

Zachary: That was really a satire. He's he's a he's a buddy. He's actually, he's actually gonna be a future tenant of mine. He's Okay. A brother of one of my tenants.

And, in fact, that tenant invited me

Steve: to his barbecue. Great guy. Yeah. And so that was just a joke. We really don't use muscle.

I follow the laws and

Zachary: Yeah. You know, do formal evictions when necessary. Very fortunate that, again, by having access to people, it's all about retention. So I'm always willing to work with somebody in terms of, hey, Zach. I don't have the full rent.

Great. What do you have today? Let's work out a plan. Text me. I'll I'll give that information to the bookkeeper.

Steve: As

Zachary: long as you abide on that, I'll work on payment plans. People neglect the fact that it's an expensive turnover. You know, say, oh, well, I can get more money or, you know, you're difficult to work with. There's always gonna be difficulties in anything. Alright.

But it's about maximizing the situation at hand.

Steve: Absolutely. So at which point then did you start buying houses to flip?

Zachary: I still do. So, I mean, I can look at stuff. Fortunately, now I'm very stabilized Mhmm. Company. So I can take a home, and part of my exit strategy is put it up for sale or for rent.

Obviously, the stuff that works in the 300 under is much better long term rentals because the yields are better. You start getting into the half 1,000,000, 6 and 700,000, there's kind of an inverse relationship in terms of rents and units. So I stick to basically the 300 under. If the home's more expensive, which I'm gonna buy one, actually, with PACE today, thankfully, you know, that's gonna be a flick because that doesn't make sense to rent.

Steve: Alright. So what year did you start flipping?

Zachary: I've always been flipping along the way. So the flip so anyone who gets in this business, people like the advice to say, hey. The flipping is great because it's a guarantee. In your highest yield. Of course, you're paying 40%.

Now my tax adviser says stop flipping, keep retaining, and then as things get, you know, seasoned, sell, you know, with the 40% versus the 20%. Mhmm. But, again, you never want a 100% make a tax, you know, decision a business decision on a tax implication.

Steve: Alright. Talk to me about that.

Zachary: What do

Steve: what do you mean by that?

Zachary: Okay. So what I mean is if if I go buy a home to tomorrow and pay a $150,000 and I can rent it for, you know, 1,400 or $1,300 and get an eight to 10 cap, which is still pretty good, unlevered. I always evaluate everything on a cash on cash basis. Mhmm. So if I go and buy that deal, and now I I can put in $10, let's just say, $1.50.

I'm in a $1.60. If I sell it for $1.80, I really make about maybe 14 or $13,000. After I pay 40% in taxes, I make $8. Not the best of deals. But if I rent that out for a year and let's assume, you know, a few points of appreciation, something moderate Mhmm.

That home's worth maybe $1.85 or $1.90. I'm bringing in $1,516,000 dollars in rent, which will be a great return for an annualized return Mhmm. Plus some appreciation, plus a long term gain that makes sense if you have the liquidity to do that deal. So for me, again, it it make on that particular instance, it's better for the long term hold, assuming the market doesn't there's the risk in market volatility and correction which no one thinks about. But I do haven't gone through the volatility in the markets.

Mhmm. So I always look at what's the downside risk. But conversely, hey, the 40% really kills people say, I just made $50 on a flip. Well, first of all, it depends. That's a massive amount of money.

I don't look to hit home runs. But, if I can mitigate 40% taxes versus 20 from a long term hold, I'm always game for that, especially if I have additional income, available, sedentary capital to redeploy.

Steve: Right. So PACE wants to know about how you maintain your your day. How do you manage your day? What's your schedule like?

Zachary: It's all about the acquisitions. If someone calls me on a deal, no matter what, that takes precedence. So if they want me to come out there and evaluate with them, you know, underwrite a deal of a lot of wholesalers like PACE. And and, yeah, I mean, there's a zillion of them. Hey, tell me I'm going out to this property.

What do you think you'd pay for this? Give me a ballpark. So I'll always spend the time and energy prioritizing those relationships, cultivating with people that bring me real deals to be a massive resource for them to give that first opportunity So if I say, hey, here's where I would be, it's huge because it gives them, you know, that threshold of where do they need to buy, what's gonna be their spread, with a high degree of certainty of where to acquire those homes.

Steve: So it's

Zachary: all about the acquisitions. If I every morning I like to work out, but if someone says, hey, I need you to be an appointment at 09:00 with me to go buy this house, I'll be at that appointment at 09:00. You call me yesterday. Hey, you know, hey, pulling you from the bullpen. Let's go.

This is a great opportunity. Anytime there's an opportunity that aligns with your business model, which is, for me, acquiring deals and building relationships, that's the priority, and that's what you do. But, otherwise, I'm all about health and, physical fitness and and deals. That's kind of my mantra. So I wake up and, you know, go to the gym, get a good mindset and, you know, carries forward through the day, mitigate the stresses of managing multiple homes and, you know, multiple issues with tenants, etcetera.

Steve: Right.

Zachary: And then, you know, focus on buying and seeing my crews and driving projects and just immersing myself in the deals.

Steve: So you're driving the properties too?

Zachary: Absolutely. Yeah.

Steve: What Sonya wants to know why do you choose a property managed versus hiring it out?

Zachary: I like to be vertically integrated because I'm a hands on person. For me, it's all about those relationships. Once you outsource, you know, number one, it's gonna, you know, dollars 150,000 a year, that you're gonna outsource with some sort of management company and there's a lot of great companies, Hawkins and E and G Real Estate and a lot of management companies that, you know, I love. But for me, again, it's all about the retention and having that personal relationship with my clients. I've gotten so many deals, thankfully, from my tenants because they know that they're like family.

Truthfully, you can call me anytime, Zach. I have an issue with backup. No problem. Here's my plumber, Zach. Hey.

I have a question on this. Hey. I have my front my grandma's moving to town. I mean, I get this all the time that you get that self generating leads. I can pre rent most of my homes way in advance.

They say, when you get your next home in Buckeye or in this area, $3.02, I want it. Here's my price point. Wow. So that's huge. So once you outsource that, the management company is gonna take those commissions and fees, etc.

So for me, it's maximizing that return. But most importantly, it's about the relationships.

Steve: Okay. And Laura Morberry wants to know, how are you maintaining life work balance?

Zachary: You know, it's a great question. You know, ladies, I'm single, probably because I work too much. But there was a time where I had, you know, two phones. And, I mean, I'll tell you just, you know, getting raw and real. And, it was always about the money and the chase.

And then that was early on when I felt like that's the most important thing. But it's not. I mean, I remember a day when my dad called me. He's like, Hey, do you have a minute to talk? I'm on two phones paying contractors.

I'm not really being present. And he's like, I got to tell you, I'm like, Yeah, hurry up, dad. I'm in the middle of something. He's like, I just got diagnosed with cancer. I'm like, Holy shit, I'm just an asshole.

I don't know if we can swear in here.

Steve: That's fine.

Zachary: Yeah. So I'm like, I'm just a dick and selfish. And what am I doing with my life? All I'm doing is chasing deals and kind of gives you a lot of perspective and clarity. Yeah.

And, at that moment, I've just consolidated into one phone and I just try and be present. That's what, you know, light, live, work, balance it. Again, that's why I work out. I got a dog. You know, I'd like to settle down and have a family one day, you know, a couple of kids.

But for right now, being single, I can be somewhat selfish and put my time and energy into my health, my fitness, and building the business. But, I recognize that it's all about being present. I like using FaceTime a lot now in terms of doing business with people because I like, again, looking them in the eye. I'm the old school kind of mid rise guy. Like, let's let's be present.

That's what

Steve: And that's something that Pace is always harassing me about. He wants me to get a freaking iPhone. Right. Alright. So Jared Barnes wants to know how much equity you'd like to leave, home, percentage wise, when you're done renovating and renting it and getting it rent ready?

Zachary: So at the end of the day, in terms of leaving, in other words, what you're probably trying to ask is what I'm looking for in terms of equity in the deal after I all in before I sell, I'd like to make at least 10% of my money. If I can't get a 10% yield, there's not 10% left in the deal net after any fees or commissions.

Steve: Then

Zachary: to me, it's not really a good buy.

Steve: 10 cash on cash.

Zachary: Oh, in terms of my return or equity?

Steve: Well, this the question here, maybe, Jared, you should, if you could re repost that.

Zachary: I'd like to get 10% return, and I like at least, you know, it's kind of the if I'm flipping it, then that's 10% equity. And if it's gonna be a long term if I'm renting it, I could work on an 8% or even a 7% depending on how much equity is in there. Right? So if I can get someone says, hey. I'm gonna rent back at below market, and it's gonna be a lower short term yield, but I know that I have more equity in the deal, I'll still do the deal because I know it's offset based on the back end equity on the flip.

Steve: Absolutely. That makes sense. Right. So one thing you and I were talking about before we started, was you like to do more of a consultative approach when you're talking whether it's a wholesaler, homeowner, or whatever. Talk about that.

Sure. I mean, a lot

Zachary: of times people come out to the house. They kinda have a number in mind or they prequalify the owner. Hey. If I come out today, you know, what are you looking for? And it's all about just numbers.

Mhmm. And, really, this business is consultative. It's it's, again, going back to relationships, relationships, relationship. My relationships with my contractors, my relationships with my tenants, my relationships with my wholesalers, that's the key. So when you go out and you're interfacing with sellers, which, you know, I'm not doing that much anymore, but I love to do and I'm happy to do for any wholesalers who want me to go out and buy with you.

I'll be the first guy there. Just give me the first opportunity to buy. Mhmm. It's really about understanding what, their utility of selling is. I treat it like a buffet.

Instead of me saying, hey. I'm gonna offer you x, I say to them, what are you looking to achieve? You know, what are you hoping for? Is it money? Is it time frame?

Do you need, timing on the back end? Let's treat it like a buffet. You want, salad? You want greens? Are you a vegetarian?

Do you eat meat? Know, when do you wanna close? Do you want me to close in a week and run back for two years? What's important to you? Mhmm.

Do you wanna leave everything in the house and not worry about cleaning it up? I mean, there's cats in here and furniture. So it's a you tell me in an ideal world if you can create your own buffet. What do you want? And then from there, I extrapolate what's important and put the deal together.

Right. Old school negotiation, understanding the utility of the seller, digesting it, and creating, you know, a win win situation.

Steve: Right. And I think that's a really good point. A lot of people are so worried about price

Zachary: So worried.

Steve: Whether buyer or seller, and there's so many more pieces to the puzzle than just price.

Zachary: A thousand percent. When you're building those core relationships and you truly understand somebody and you can really, meld and mold with them, and and they'll say, listen.

Steve: To me, it's not even about price. I like you.

Zachary: I wanna do business with you. I have a good feeling about you. Yeah. And I had some other wholesalers say, I they offered, you know, $10,000 more. I just wanna do business with you.

I don't even like he seems sketchy. Okay? But there's also the realness of of qualifying your offer too. So not only you go in there and you understand that, but commit to executing on this. So don't then make an offer where you're gonna have to I don't like this.

Retrade stuff and go back. If I'm out there and I give you a number, I'm never gonna retrade you. My number's firm, and I'm gonna close. So if you bring me the deal, I'm not gonna reassign. I'm not gonna do, you know, any of the games.

You're gonna get full price, cash, no contingencies, and that's the deal. A 100%.

Steve: And I see, you know, again, when I was stalking you before, I see pictures of you in in hazmat suits and a big smile on your face. So talk to me about that.

Zachary: Sure. I mean, a lot of times people say I should do these shows and, you know, I've always been averse to social media.

Steve: Mhmm.

Zachary: But I almost, like, a class clown growing up and like to have fun. That's kind of my mantra to it. Like, we're, again, we're gonna do business. We're gonna have some fun along the way. I do these satires.

I mean, I bought some hoarder houses, and I literally went on Amazon and bought these suits. And I'll go in there with my guys and start clearing stuff out, but just showing people, like, this is real life. Like, this is how some people live. It's fortunes. It's disgusting, but it's amazing to turn literally trash to cash.

My buddy Bruce McNeil, just give him a shout. Big investor as well out in, in the South. And it's funny. My dad's ex, business partner at his law firm, her son's a big time real estate guy, and we both doing real estate just randomly. Mhmm.

And he's like, trash to cash. And it's a great tagline. So I gotta give

Steve: you wonderful tagline.

Zachary: So, that's what we do. Literally turn this trash to cash, and revitalize these neighborhoods and provide, you know, good homes for good families and good people at fair pricing. And Yeah. That's kinda the deal. But, again, just having fun along the way.

It's disgusting. People are like, I would never touch something like that. But that's really a gold mine. I mean, that's just the nature of our business. The more distressed it is, the more value we can create through rehab, through good economies of scale.

That's what we do. So I, again, I like the satire in these videos, and I hope we can do more videos and social media stuff, which is the future.

Steve: Oh, yeah. Having fun while doing it. Right. So, John Alvarez wants to know, what kind of rehab are you doing for thirty k? Like, when you're doing a rehab, like, right, either whether rehabbing for sale or rehabbing for rental, like, what

Zachary: are you doing for 30 k? 30 k goes a long way, especially when you have, good builder relationships, good good contractors, again, being vertically integrated. So I get good discounts through my Home Depots, through my buddy's builder's warehouse, give them a shout. We import a lot of stuff from China in big containers. Oh, really?

Yeah. So, that really helps the value, in terms of what we're providing. So what we could do for 30 k may cost somebody else 50 or 60. So in a Maryville home, 30 k can go a long way. We could do all new floors, new kitchen, quartz counters, appliances, two tone paint, interior, exterior, sometimes a roof, some basic landscaping, and then bathrooms and plumbing.

So most people

Steve: 30 k.

Zachary: For 30 k. So that's a huge value. And that also enables me to buy deals that other people can't buy because I've got the cost down pretty much to a science. So that's huge. I mean, again

Steve: Definitely helps that you have, six crews. Yeah. Okay. So, I know we talked touched on this a little bit, but I I wanna see if you can elaborate. How is your operation different than all our local friends and competitors?

Zachary: I'm different because, you know, I'm not using hard money. I don't have a big overhead. I drive around in my Prius. I don't have office space and whatnot, so I can afford to pay more. Mhmm.

I also, as I kinda touched on before, is if someone brings me a deal, I'm not competition to them. I'm an I'm, I'm an asset to them Right. Because I'm the one that's gonna come in there and buy it. I can help you buy it. I can help you, you know, negotiate the deal.

So really kind of create those synergistic relationships. But knowing that I'm not competition, again, the asset, I can come in there and pay more than pretty much anybody because, again, I have my costs under control. My overhead is nil. I have zero money in advertising. So when someone wants, you know, it's a tighter deal for them.

They want an outlet for it. I think I'm pretty much a good go to guy. And additionally, I don't retrade stuff, so I don't take your deal and then try and remarket and blast it out. And I think that that's huge. A lot of times when you're going to escrow and everything is full disclosure and again I'm licensed, so I'm all about keeping everything above board and doing things to, you know, the whole protocol of the industry.

And just that transparency. So if you're gonna bring me a deal, I'm not gonna go shop at 20 times and there's 40 people outside the seller's home and they're like, where are all these people coming to my house? I'm gonna cancel the dealers, 50 people looking through my windows. No, I just need to walk in it one time. Let me see it for twenty seconds and I'm gonna buy the deal with 100%, certainty.

I mean, I like to use the phrase this, I say, hey, if you order a pizza from Domino's, you pay $99.95. They deliver it. You don't need to inspect the kitchen. The pizza is shit. You throw it away.

But if you're spending 6 figures or 5 figures or 30,000, it doesn't matter. And you don't have the time to walk through a property yourself for 26. I know there's people that buy on pictures. God bless you. But, you know, through experience, go out to tax records are not always right.

It may not be a two bath. It may not be a three bath. It may not be 1,500 square feet. I've been in many deals that say it's a four two. I get out there.

It's a three two and twelve hundred square feet or it's the opposite. You go out and it's represented 1,200, it's 1,500 square feet. Go out there, stop being lazy, walk the property, see it, feel it, touch it. The tangibility is key, and go from there. So once I get out there, I'm not bringing a 100 people, just myself.

I'll meet you personally. We're not gonna disrupt anything. If anything, we'll enhance your existing relationship. I'll make you look good, and, we'll buy the deal.

Steve: You know, it's funny. We have one deal that we we have contracted. You know, we we even gave the lady, 1,500 nonrefundable earnest. Right? Like, based off of what we, the conversation we had with her.

And we liked the deal, and then I sold it to a flipper, wholesaled it to a flipper. And he's like, okay, no. Let me just go through the property one time. So he did. He measured it.

Everything looks good. I get it. I get it. You know, he's like, based off what I see, this is good to go. Yep.

Get a text at 08:00 at night. Hey. We have a problem. I was like, what do you mean we have a problem? When we measured it because when whoever goes out is an appraiser.

It's not, just, you know, I'm gonna look at it and see if it looks good. Like, they actually go out with, like, a measuring tape.

Zachary: Right.

Steve: And we're missing 400 square feet. Tax plan or the tax floor plan is just flat out wrong. There's no there's nothing above the garage. So in the tax plan, there's something above the garage. You look at the picture, it's just a garage.

Right. So, I mean, that goes back to what you're saying, like, tax is definitely not a 100% correct.

Zachary: A 100%. I mean, it's happening multiple times, folks. I mean, again, get it on pictures, get it with a twenty second walk through period, whatever. But, I mean, I think that's huge advice. Again, it's not like you're you're buying the pizza or a candy bar where you can throw it out.

This is serious money. And if you're gonna buy even if you're gonna buy a car, I'd wanna test drive it. No different. This is houses. You know, this isn't, like, taken lightly.

So I've been in one where the guy's like, hey. I need $1.65 for this deal. And I'm like, sounds great on paper. 1,600 square feet. North Phoenix deal.

Good location. I go out there. I'm like, I asked the tenant. I'm like, how big is this house? She's like, 1,200 square feet.

There you go. And right away, he and I said to the wholesaler, I'll buy this deal if it's 1,600. But if it's less, let's go. Let's prorate price per square foot and back engineer this deal. Yeah.

And he's like, well, I don't have that much room on there. And we put the deal together, but there was a significant discount, and he had to retrade the seller because it was significantly smaller. So just wanna be careful. Yeah.

Steve: So, Jared Barnes wants to know, what's your endgame?

Zachary: You know, that's always a great question. I I'm passionate. To me, it's like a big game of monopoly. There's no, you know, 82 year old that didn't wake up one day and said, god. I'm tired of having, you know, 200 rental properties.

Keep building. I like my my crews are like family, and my team is amazing. I like the engagement of the business. I'd look for some level of diversification out there in other alternative businesses. But just being an entrepreneur, I like I love what I do.

I mean, it's it's blessed. I think there's no other business out there where you can create amazing, you know, strategic wealth in a tangible fashion where you have control, and and just have fun with it. You know? It Keeps you engaged. So for me, you know, I mean, I could sit there and do nothing, but, you know, there's no purpose.

So I I love it. And as long as I'm continuing to have fun, I need to keep building the business and keep growing it.

Steve: Makes a lot of sense. Tam Trang wants to know, do you find any deals on MLS or is it all off market?

Zachary: Everything I buy pretty much is off market. Most of the time through these broker relationships and where I source my deals from, they'll bring it to me prior to hitting the MLS. They'll say to the seller, hey. I have a cash buyer. We can look at this first and always tell people, look.

You can retail probably at this. So if you don't want the headache, look. I'm looking to make 10 or 12%, whatever the number is. Is it worth it for you to sell prior to the MLS and just be done and and not worry about inspections and disclosures and all those headaches today and the agent gets paid first, and and I get, you know, some equity in the property, then it's a win win. Otherwise, you know, they retail and always give someone an option.

I don't have to buy your house. But if it's a win win win, let's do the deal. So, yeah, most of my stuff would be a listed property or from agents or wholesalers or whatnot, but I have not bought an MLS deal in forever.

Steve: Okay. Yeah. So one of the things I'm gonna be talking about, at WeLive in a couple of days is the evolution of the licensed wholesaler. So, I think it makes sense these days

Zachary: Yeah.

Steve: To be licensed because it gives you more options.

Zachary: Sure. So how

Steve: has that been a benefit for you?

Zachary: Love the question. I mean, even when I had the one eight hundred no agent, we were also you know, half of us were licensed in there. And I'd go out to them and literally use the analogy of a cap. I walk in and say, okay. Hi.

I'm a licensed agent. I think your home retail is gonna be this. And do you wanna wait thirty, sixty, ninety days? And, you know, we're gonna have to do some fix up and spend a little money. And if that's the route you wanna go, money's the most important, great.

Let's wear the agent cap, and I'll help you achieve that. It'll even bring in crews. We'll help create value, etcetera. Or listen. I know you're looking to move out of state.

You just got divorced. This house is disgusting. It's not showable. You don't have the capital to improve it and turn my cap backwards so you can physically see kind of the change. Mhmm.

And here's what I'm willing to offer. But let's be real. I'm, you know, giving you straight up concrete information. Here's the value of your home. There's the MLS.

Here's the comps. Nowadays, you got the Zillios and Trulia's. And anyone knows what their home is worth REITs are or they think they know what it's worth for the most part. But what they're neglecting is the fix up. So me being licensed gives you a lot about let's either a, you can work I don't do, you know, outside representation.

But if that's the route you wanna go and you can create ancillary income by just representing end users, amazing, or picking up buyers. But I just come in with the sole purpose of buying. And if I don't buy, you outsource it or get a referral fee. Yeah. But it's also, again, talking about the ramifications of being licensed and doing real business without, you know, taking advantage of anybody and and doing things above board and transparent.

So I to me, I leverage it as, a huge benefit because people wanna know that you're accountable. You're responsible. If an investor is not licensed, screw somebody. What's what's your recourse? Right?

You can take them to court, court, whatever. If I screw somebody, you're going to the board of realtors.

Steve: You're

Zachary: you could lose my license. That's your longevity.

Steve: So there's there's an actual consequence.

Zachary: Abs oh, major. Yeah. So when you tell them that, say, listen. You wanna do something that does things above board and ethically and honestly and transparently, Here, we're the right resource for you.

Steve: Alright. So being licensed, are you doing any traditional business?

Zachary: Zero. I mean, every once in a while, you get a buddy who wants you to represent them, of course, for free and this and that. I really try to create with you know, you know how it is. And I'm like, you're so busy. It disrupts my mission, which is buying homes and

Steve: Mhmm. You

Zachary: know, creating more rentals and flips. You know, if it's a family member, you can't really say no when you do it. But, you know, they're always yelling at you when you're on you, and you're like, woah. I'm doing this for free. So I really try and shy away from that and focus on my core mission.

If you get into business, it's a great way of, you know, penetrating the business. I highly recommend doing that, and I have done traditional business, ancillary to the acquisition side. So I'm not opposed to it, but it just, it deflects from my core competency, which is acquisitions.

Steve: Absolutely. What does your organization look like today? I know you touched on it a little bit, but let's elaborate on it.

Zachary: Yeah. I mean, it's me, myself, and myself. You know, it's not like some big company. You know, people say, I'm a staff again and just, just myself. I have good banking relationships.

So that was key. I remember we kinda touched on this prior. Mhmm. Not only the hedge funds knock on your door, all of a sudden, I was going to Bank of America's and local banks. Hey.

Who wants to loan on, some single family? And everyone's throwing up because they, you know, they just lost their shirts. Mhmm.

Steve: You

Zachary: know, 2007. Finally, 02/1112, you know, they get a knock. Hey. You want a line of credit? I remember I got my first line of credit on a class cross collateralization deal of six or seven homes for, like, $400.

I'm like, this this is amazing. Finally, I can get some leverage. I think it's around 6%. It real you know, at a decent rate at the time. So through that and you continue to grow the business and you add, sustainable assets to the organization, you can then continue to grow through, solid, strategic leverage with local banks.

So that's been instrumental in the growth of the organization. But, again, it's really just having the available capital, the proper crews, and the family of guys to do the rehabs.

Steve: So the six crews, are they on salary or?

Zachary: Nope. They're all independent, but I pretty much and they can go work for anybody they want, but and they've some of them tried, oh, they're gonna make more money doing this and that. And they do all very well because they're constantly busy, but they're all independent contractors. So I keep it super clean. No one's on salary.

You know, you reap what you sow. And if you finish the house this time and this is our contractual agreement, you get paid, you know. So it's kind of So

Steve: you got an assistant, a bookkeeper?

Zachary: Yep. These are two handymen?

Steve: Two handymen. Yeah.

Zachary: And but then the handymen are independent. So, you know, based on, hey. You do these homes. You give me the invoices. Everyone gets paid on Friday.

And that's my thing. I don't care if I have to work till two in the morning. Everyone's getting paid. I mean, people a lot a lot of people in this business, they care about how much money they're making. They kinda neglect everything else.

I think it just falls into place. I think one of the key components of my success is just taking care of the people that are taking care of you, you know, and remember that this is your family and everyone's gotta eat and, you know, holidays come around and take care of everybody. But make sure that they get paid and, you know, you're always there for them just like you're there.

Steve: It's amazing to me how much people, miss out on paying their people on time. Mhmm. Like, how often that happens.

Zachary: I've never yeah. I mean, it's it's key. I mean, if they're these guys are working, you know, twelve, fourteen hour days. The least you can plus, you wanna be on-site. I mean, you can't get to the point again talking about going out and seeing houses.

Like, I drive all my houses that are under construction. Now my rental properties take forever. But every home that's under construction, at least once or twice a week. Because you wanna be out there. You're making critical decisions.

You're being with the guys. You're supporting them. You know? It's funny. Les, I did a video the other day on, House on Lawrence.

And right before that, I should I should have filmed it. The guys had what's called Mexican Viagra. Mhmm. It's a big pot of stew, which is, like all this seafood. They said, Zacharias, I speak Spanish.

Preva la sopa. What is this? Mexican Viagra. You know, so it's about bonding with your people again, but it's just it's a great time.

Steve: So you mentioned a moment ago about cross collateralization. So then are you, implementing, like, the BRRRR model? Are you buying everything or you're you're owning everything free and clear and just doing lines of credit on it? Like, what is Sure.

Zachary: So, yeah, before the, the leverage situation came in, I had to use cash, which was great when things were $30,000 But then, of course, that dried up, so you need a OPM or some bank financing. So finally, when prices appreciated and banks shot saw some stabilization in the market, now they went out there and said, hey. We've created programs for investors like yourself. So I'm buying everything with cash, and it could be through a line of credit or just sedentary capital from dispositions. And then as you acquire new properties, obviously, whether it be through a line of credit or cash, they're unencumbered.

So a certain point, if you needed more capital and you have good debt to income ratio, etcetera, and you have transparent accounting, which I talked about before, building a good solid business Right. With transparency and and full deposit, reporting, then the banks do absolutely wanna work with you, and you can continue to grow through that. So that's how it looks.

Steve: That's super impressive. I see there are a couple of questions that we missed. So, JL Rivera wants to know. So, being licensed, you have to have approval from your broker to market to homeowners?

Zachary: I mean, you're gonna have a to market to homeowners, meaning on the on the retail side?

Steve: Yes. Or yeah. On the no. I mean, on the probably on the acquisition side.

Zachary: I'm not doing any marketing to homeowners. So if you do, then absolutely, you need to represent that you're especially if you're doing any contracts in anything that I do, whether it be a rental or an acquisition or purchase, even if it's an assignment, it has to all when in doubt, disclose. It's kind of the cardinal rule of thumb. If you have a question on it or you think it's iffy, doesn't matter, disclose. It'll keep you out of trouble.

So I would always especially if you're out there with your license and you're acquiring from a homeowner, a 550%. I'm licensed. I'm buying for profit and loss to give every disclosure. I'm here to take all of your equity and make it my own. No.

I'm kidding. But the point is, no. You always, when in doubt, disclose a 100%. You don't wanna get yourself in in trouble.

Steve: Sam Balasquez wants to know what banks are you recommending for lines of credit? Sure.

Zachary: I've worked with FirstBank. I've worked with the Biltmore Bank, and I've worked with, JPMorgan. And lastly, I have a new bank called Sunflower Bank. They're a newer bank. They're out of Denver, and I've, doing some really nice deals with them.

Steve: So So

Zachary: I I fully endorse right now. For the most part, Sunflower has been the most aggressive. You can pay me later, folks. No. I'm kidding.

So that's and I'm happy to make any introductions for anyone.

Steve: Aggressive as in interest rate or LTV or both?

Zachary: LTV and interest rate. You know, I think being a newer bank, they they wanna get capital on the streets and develop a nice presence. And a lot of times when you're a new player, you know, you get a little more aggressive. One thing that's nice about now is there's just tons of, capital around the markets right now. I mean, deals are drying up.

There's a lot of people. As we know, it's harder and harder to get deals. But one thing is there's a plethora of of capital opportunities out there. Even the the big REITs and funds have created ancillary arms of of loans versus just acquisitions because they're getting good yields. So you're seeing 9%, you know, and stuff like that.

In alternative, you got the capital funds and the Lauren's and Josh's.

Steve: So I know, like, right now, personally, I use MidFirst. And we're at, interest rate isn't isn't attractive at all.

Zachary: But What's the rate?

Steve: I think we're at, like, seven

Zachary: now. Yeah. But what's the LTV?

Steve: So the LTV on our investment properties is 60.

Zachary: Okay. That's also pretty low Yeah. Which is very conservative, which is okay. But that's high. I mean, I think look.

There's a lot of different ways. It depends. If you're looking you if it depends how many homes you have Mhmm. You may be better depending what your ex's strategy is. Right?

Everyone's different. So if your ex's strategy is to hold this thing and pay it off in fifteen years, put a long term debt on there and get it down to five. You know? And probably because depreciation, you probably get 75% or 80% LTV. Your payment will probably go down because you can get in the fives or maybe even fours with a long term 30 or 50.

Steve: It's like you. We're just using it to buy properties cash.

Zachary: Okay. So in that respect, then it's it's fine.

Steve: Yeah. Yeah. Okay. So, Pace wants to know how many grams of protein you're putting in your arms.

Zachary: Yeah.

Steve: Okay. So, one thing we didn't really talk about here, but I think it's super critical is something that, Pace and I talked about this morning. The importance of relationships in, something that you ran into, something that other flippers I know have ran into is they've got an asking price. You commit to the asking price, and then they're like, oh, actually, I'm still shopping it against someone else. Yeah.

Talk to me about that in this because relationships is super important in this in, in Maricopa County, Phoenix Metro. Sure. But then you got this real estate community, which is small. Yep. And you got this wholesaling flipping community, which is tiny.

Yep. So talk to me about that, this this, retrading or, like, making offers that don't be pulled, don't honor. Like, what is that? Yeah. I mean, that stuff really bothers me.

Zachary: I mean, I I don't wanna say I'm old school, but I've been doing this almost seventeen years. Mhmm. Been around the block. I wanna work with people that are solid. There's a very you know, there's definitely a lot of players in this market.

By no means, am I the only buyer out here. Right. But I pride myself on saying I'm I'm always gonna honor what I do, and that's why people will continue to endorse me, send me deals, or work synergistically.

Steve: You're here to you're here to continue working. You're not here for a fly by night.

Zachary: Correct. I'm not looking to get rich on one deal and and adios. And I think that's super important. And I was telling Pace not too long ago, a wholesaler, new guy to the business, younger guy. And I respect these young guys.

We all started when I was 21 years old, whatever. So, I mean, you're out there hustling. God bless you. But they're not knowing all about the real estate. A guy calls me on a deal.

I bought his first deal. It's kind of a, you know, struggle process with them. But finally, we got the deal done, and I did what I said closed on time. No retrading. Okay.

Great. So the guy knows I'm for real just like I expressed. The next day he calls me up, he says, hey. I got this deal. It's 195,000.

It's in North Phoenix. I said, okay. Sounds reasonable. Just wanna come out there and walk it and see it just like always. Give me twenty seconds myself in the property.

When can you come? He says, I can be there in, you know, an hour. I'm an hour away. I'm surprised looking another deal. So drive all the way out there.

I get there. Walk through the house. I walk outside. He was asking $1.95. I said, I'm good at $1.95.

You know, let's get the paperwork together. He goes, well, I'll let you know. I said, what do you mean you'll let me know? I just came out. I drove an hour.

Mhmm. And you what do you mean you're gonna let me know? I've never even heard of such. I'm giving you a full price. It's not like I'd understand if I said $1.92, $1.85, $1.94.

Okay. I'm not bringing you full price. You have other people. Go for it. I understand the risk.

But at that point, I spent an hour, basically, two hours, come driving there and back to come out, evaluate the deal. I just bought another one from you. I've helped you and and taught you some valuable lessons on the first flip and giving you information. And then I say, I don't understand. You're asking full price.

I'm giving you full price. You'll let me know. Because I wanna give other people an opportunity. I said, you're burning bridges right away. I said, I'm gonna make this very clear, and I'm not trying to be a dick.

If I can give you sixty seconds to kinda rethink what you're doing here, you can go show other people the property if you think I'm gonna default, which is not gonna happen, and put them in backup, but shake my hand right now, sixty seconds. Otherwise and I'm not gonna mention this guy because it doesn't I don't need cash or anybody. It's irrelevant. But the point is the principle. It's like, if you listed your home on the MLS for 200,000, a cash buyer comes in and says, I'll give you 200,000.

You're not gonna say, let me think about it. I'm gonna wait for some other offers. You say, amazing. Most rational people.

Steve: Right.

Zachary: So the people that are trying to get greedy or, you know, create other relationships, maintain good relationships and, you know, from the Ground Floor. Otherwise, your reputation is gonna be tarnished by real people doing deals. Right. It doesn't make any sense.

Steve: So you probably know Brian Kangusky, another flipper in town. I do know. He's got that same exact complaint. He's like, you send it to me at two hundred. Yeah.

I told you I'm good at two hundred. Mhmm. What do you mean we don't have a deal yet? Right.

Zachary: It'd be the same thing. Exactly. And it

Steve: was the same exact thing. It's like, alright. I'm deleting your phone number.

Zachary: Like Absolutely. I said, don't even call me. Like, honestly, like, you think I'm joking. Thankfully, I don't need to buy your deals. There's plenty other real people.

And I'm not here to bash you, and I wish you the best of luck. But learn from this mistake. You know? It's like again, I don't try and get if I list a property, and I love this is a good, kinda takeaway as well. If I list a home and someone brings me a really good offer, you always even wanna counter.

It may not even be price. Maybe a term. Term. Let let's do a shorter inspection period. Let's do something.

Otherwise, they you get what's called buyer's remorse. I'm overpaying if you jumped on that first offer hypothetically. Oh my god. I I could've done better. The buyers, you know, I could've bought it for less.

If you don't counter something, it's just strategically, you get again, maybe that buyer gets remorse if I have overpaid. But again, it just, you know, enhances a great relationship to build cultivate those good relationships.

Steve: Well, that and that's what that's what works. That's what lasts. So, marketing. So zero marketing.

Zachary: Right? The marketing really, I think, was done from, like, building a house and the foundation. You know, it's through just the years of of solid relationships and execution and and reputation. You can lose your reputation in one you screw one person out here. As you know, it's a small wholesale market.

You get one bad name. There's a couple bad names flowing around for business. So you just wanna be on the good side of things. And and and everyone there's plenty of money made for everybody. There's, you know, no reason to fight on stuff or do dumb stuff or illegal activities.

My marketing is really just on execution and performing. It's really I'm blessed now that because people see that I buy a lot of properties, a lot of wholesalers or companies will actually come to me and say, I see you bought X amount of properties. You know, are you interested in this? I bought a deal the other day. Guy says, hey.

I have a home around the corner from the one you just bought. I'm a new wholesaler in town. Would you be interested? Like, this is a talk about free marketing. I mean, just by doing deals, it's that domino effect Absolutely.

That keeps kind of giving back, which is great.

Steve: And I know when I was pulling a list for a while to see who's buying properties, like, your name definitely came up. So Good. So you're you're, so you're not pulling down. You're gonna skip tracing. You're not cold calling.

Zachary: I'm not in competition with any of you wholesale guys. I wanna buy from you. Let's be clear.

Steve: And you're only in Phoenix?

Zachary: No. I buy in all over Maricopa County, so not just Phoenix. So, you know, there's not

Steve: in, like, Seattle or Orlando, nothing like that.

Zachary: There's a lot of companies, and I respect that. But it being just me, I don't have aspirations of getting 10 Zacks and whatever. I like to see if you'll touch it. I mean, I worked on Wall Street for a little bit, and so I have this whole thing about the tangibility of real estate and just knowing that it's here. Stock market, you know, you get a whiff of a bad rumor and a stock, you lose 30% equity.

I know if I drive down the street, I can see my house, have insurance on it. I feel good about it.

Steve: Right. So the other part I found when I was doing some research is you're one of the top 10,000 CrossFitters in the world or you were. Let's let's talk about that.

Zachary: I don't know about that quote. I was a I got into coaching. I love I have a huge thing about health and physical fitness. Any guy with all the money in the world, they've give up all their wealth for good health. Yeah.

So I think kind of that's what I practice and preach. You know, eat healthy 80% of the time. And, I got in a crawl I like competition. I used to do Ironman. So anytime that we can

Steve: do Ironman too. Wow. Okay.

Zachary: Anytime you could do something that sounds outrageous, count me in. You know? So my buddy says, Hey, come on. We can compete every single day by throwing weights around. I'm like, What are you talking about?

Sounds like fun. Got into that and just like anything else, the cycle did that for three or four years, got my coaching certificate and

Steve: Oh, you were I

Zachary: was a coach. I was a coach and

Steve: Okay.

Zachary: You know, enjoyed it. And then I I moved away from the gym. The gym actually shut down. Actually, it was Brian Gubernick's gym. You know Brian Gubernick?

Yeah.

Steve: Yeah. You

Zachary: have Kevin. So he had a gym with his partner, Derek. And Mhmm. You know, we had a great time. He actually did deals.

Noah Brosius was a member of that gym.

Steve: Oh, really?

Zachary: Kevin. And yeah. I mean, it's just funny how. And it goes back to the whole thing, getting yourself out of that comfort level and doing things outside of your, you know, daily routine and asking the question, what do you do and how can we do deals? You seem like a fun guy.

If you're working out with somebody, you're throwing weights around and at the end of the day you're laying around on the floor and you say, hey, let's go go make some money together. There's nothing better than that.

Steve: See, I did the CrossFit thing for a little bit. Yeah. It was too humbling. So I stopped.

Zachary: Of course, it was humbling. There's always gonna be somebody who's better looking and stronger and fitter than that.

Steve: It wasn't that. It was losing because, you know, you got the what was it called? Is it is it the workout of the day, right? The the WOTD. Yeah.

The WOD. Yeah.

Zachary: The WOD. Yeah. The WOD. Yeah. The WOD.

Steve: And every time, I was, like, second to last. Like, there was, like, these 50 year old women, like, finishing it before me. I was like, I just can't this this ego cannot keep taking this abuse.

Zachary: It's good for you. Listen. If you're always the best and the smartest and most fittest in the room, then you're in the wrong environment.

Steve: I didn't have to be the best. I just had to not be like the bottom fifth.

Zachary: It's okay. It's humbling. It's definitely humbling. And I was too. I don't care.

Coach or no coach, I get my ass, you know, whooped too. But that's good because it makes you come back and work stronger and, you know, go from there. It's like losing a deal. You get pissed, but it's like I wake every day. I wake up dead broke.

You know, I go back to when I, you know, was 2007 dirt poor. You wake up and you gotta get moving, get out of bed and, you know, make your money. And so it's it's a humbling experience. So you keep that mentality of that aggressiveness Mhmm. You know, you're gonna do well.

Steve: Oh, absolutely. I have that everywhere else. Just not in CrossFit or golf. So you went in 2009, you experienced or 2007, you experienced this dip. Right?

You've seen it. I've seen it.

Zachary: Yeah.

Steve: What is your plan for if there's another recession?

Zachary: I mean, look, I hope that there's not. I mean, everyone always ask me, should we start selling? If I knew everything, I'd be in Vegas on the past line or, you know, on on

Steve: the blackjack table if I could forecast that. Yep.

Zachary: I'm very, confident about the future of Arizona. We've got major companies, our population growth, our jobs, you know, everything the numbers look good. But again, the big litmus test is not just, you know, reading in the news, it's secondhand information. It's already too late. When I stopped getting phone calls or people, you know, my tenants are moving out and there's no calls on sales, that's a pretty quick sign to start making some sort of modifications.

If there's a dip, you can always do what's called dollar cost average. So as prices come down, you're still getting good rental yields. You obviously buy into that market, which will average out your overall cost basis for a long term hold. So it's all about the stability. I tell people that are overlevered, you know, to, you know, take some money off the table if you start sensing that, you know, not be greedy.

Again, I I know it's hard for people to compete at 16% or 18% money. You'd be nervous with any sort of, volatility, and most of these guys haven't experienced that. So you get arrogant. I'm flipping. I'm making all this money.

But, again, they haven't experienced that that dip that we have. And so it gives me a different mindset again into what's my downside risk in any deal even if I have to hold this long term and you weather the storm. If you woulda held from 2007 to today, you'd actually be fine as long as you could have weathered the storm.

Steve: Right. Well, that was my house. I bought it in 2006.

Zachary: There you go.

Steve: Finally over what I bought it for. Amazing.

Zachary: And you've been paying down principal and writing off interest and

Steve: The whole time.

Zachary: There you go.

Steve: Oh. Of course. What is your why?

Zachary: What is my why? Hopefully, one day for my the future of my my husband. I have some kids and a wife and, you know, give back. I'm a advocate for charities and doing it's not just about myself and someone's got a good cause. I'm a huge dog advocate and dog charities and things like that.

Handover Rover is one that I love. But just to have fun and and continue to build relationships and wake up every day and, you know, have fun and, just keep doing what I'm doing.

Steve: So we're talking about charities. This has not been formally announced yet, so maybe this will be kinda like an informal announcement. Okay. But we're looking at something possibly in July. We're doing a poker tournament.

So, someone I know in my office, we've got this Steph Curry jersey. Right? A science Steph Curry jersey that I won in a in a in a charity, event. And his goal this year is is to raise 50,000 for the was it lymphoma and leukemia? Lymphoma.

Yeah. There you go. And so his goal is to raise 50. I was like, let's just do it in one event. Let's just do a poker.

Zachary: Come in.

Steve: Let's go.

Zachary: Let's do it.

Steve: If we get if we get a 100 people We

Zachary: should get a bunch of real estate guys, it'd be fun too.

Steve: Well yeah. So that's something to to to to keep on your radar.

Zachary: Tell me and put it on the dates. I'll disseminate it. But no pros. We don't want any pros coming to this term. It's gotta be amateur owned.

Steve: Well, I'm a failed poker player. Failed professional poker player.

Zachary: So Great.

Steve: So I should be fine.

Zachary: Well, you'll take my money. Hello? So that's fine.

Steve: What is your biggest struggle right now?

Zachary: The struggle is always finding great deals. I mean, yeah. You know, you see a lot of deals, and a lot of times, you get these distribution lists, but really making good sound business decisions to not just jump on something. There's one you know, it's easy to buy a deals per se if you assume it's a deal, but you really wanna underwrite it. And especially when you're in a liquid position, the struggle is, a, again, the full underwriting to making your sound business decisions, and finding quality, quality deals.

I mean, deals are getting thinner. People are getting more you know, people are spending a lot of money on marketing, so their margins are thinner. Everybody's trying to jack it up, so there's really no meat left on the bone. Mhmm. So it's really kinda stepping back and making sure that you're deploying good money.

You're not just chasing deals, making sound business decisions. I would say it's kind of the biggest issue. It's always about the deal and finding quality deals. You can buy something and you make, you know, 7%, 6%. And I've done some of that just just to keep kind of the crews busy and make sure that they're, you know, continuing on, which is important, is that retention.

But it's really about the quality of the deal, and the underwriting standpoint.

Steve: And what is your superpower?

Zachary: Execution, you know, and enhancing other people's relationships. I'll make anyone, you know, look great and continue to grow your business. So in other words, if you bring me a deal wholesale and now I'm interfacing with the owner because I'm the end user buyer, and they say, hey. My cousin, for example, they wanna sell their house. I'm not gonna buy your cousin's house.

I'm gonna make sure that you, who brought me this deal, goes by as the cousin's house because I wanna continue that relationship. That's where it originated. And there's a lot of times too, my superpowers, the loyalty, execution and loyalty. So if, you know, somebody brings me a deal and they make an an introduction to somebody else, and that introduction and that guy wants to sell me a house direct, I'm gonna make sure that that guy is gonna get paid because you've originated that relationship.

Steve: Yeah.

Zachary: And that's few and far between. So I would say the loyalty, the transparency, the the execution. Like, if I tell you, hey. I'm gonna be here, you know, over deliver and under promise, you know. Just get it done.

Steve: Do you have a CRM for all this or is it all in your head?

Zachary: It's all in my head. Yeah. I swear to god. Yeah. My my head is, you know, sometimes I have a problem sleeping.

It's all in

Steve: my head. What is the greatest lesson you've learned?

Zachary: Not to be greedy. You know, we again, going through, having navigated the volatility in the waters and and knowing that things can happen, overnight and change the trajectory and pace. You know, when there's a good deal at hand, like, going back to that wholesale deal, there's full price. Take the deal. You know?

Like, again, if I get good offers on properties, next. You know, leave some money on the table. Yeah. Make sure that everybody in that deal comes out ahead, the agent, the buyer, yourself. If everyone in that room and it's a, you know, zero sum game, somebody loses, it's not a good deal.

So every deal that I do, I want it to be a win win win for everybody.

Steve: Right. If everyone's not winning, they're not coming back.

Zachary: No. I want I want repeat customers. You know, we're we're in this for the long haul. If we're having fun, you know, I wanna buy deals with you for the next fifty years. You know, let's do it.

Steve: So what's your favorite, best, or most interesting, failure?

Zachary: Most interesting failure. We've all had a lot of them. I would say, I guess, trusting in a previous partnership, in a previous partnership, you know, not really documenting an operating agreement. You know, I've invested in some alternative businesses. You get arrogant, think, okay, making money in this niche.

So just like in anything else in Arizona, a statute of frauds. So just like in anything else in Arizona, a statute of frauds. Write a statute of frauds, write it out, execute it, get a solid documentation to protect yourself, you know? I mean, yeah, it's unfortunate you can't trust everybody and not everyone is, you know, a person of their word. But document, everything so you're protected in case of, you know, default by the other party.

Yeah. You know? And so that hurts your core because if, you know, it's a good friend or it's a family member and you're investing with them and all of a sudden it's taken away from you, I mean, that's a gut check quickly of, like, wait a sec. I thought everything was good. You're stopping a distribution payment or whatever it is, you know, and, so, unfortunately, moving forward with any deals I did, it's all about the documentation.

I mean, I I talk about the guy who invested a lot of money in my business before. I mean, the other guy had DNA samples of me, background checks. I'm like, jeez. I'm spending 20,000 with an attorney. We haven't even done a deal yet, and times are you know, this is 2,010 or whatever it is with this investor.

I'm like, I sure hope this guy invests in the companies, go indeed. My attorney is spending all this time and energy, but, of course, you build up a proper foundation and protocols and everything else follows. Right. Yeah.

Steve: So I

Zachary: think that's a huge takeaways. Trust people, but protect yourself. You know, do things in writing. Don't do any of these verbal arrangements and make sure that you're fully protected to mitigate risk. Risk.

Steve: Yeah. And that's one of the unfortunate things. Right? Because I'm a handshake

Zachary: guy. I am too. I gotta tell you something. Yeah.

Steve: But you gotta document it because when shit hits the fan, people's memories change.

Zachary: They sure do. Yeah. Absolutely. I mean, that's a great point. Money's on the table.

You could be the best friend in the world. I have money on the table, and it's the same thing. It's they're greedy and you're not. Or, again, I wouldn't another takeaway is I wouldn't necessarily buy, rentals or deals with buddies because you never know your utility. You wanna sell, they wanna hold, you're to stand still, they get a divorce.

There's too many intervening variables. You wanna cross collateralize, but now you need two signatures. It screws up everything. I would tell anyone just to do the deals on their own or have some sort of just capital partnership with somebody, and that's it because it gives you the most flexibility in terms of a disposition, strategy.

Steve: Right. Is Is there a book that you've gifted more than any other? Is there a book that what? You've gifted more than any other.

Zachary: No. I mean, it's funny. My dad laughs at me, thinks I'm illiterate. I'm not you know, I'm I'm out in the field. I'm kinda just learn you know?

I probably read two books my entire life. I'm just out doing I like to do deals. I'm just a street learner. I went to business school, and I've always had that entrepreneurial spirit. But I, you know, I respect all these people, these good books and this and that, but I'm not a reader.

I'm more of a doer. I gotta tell you, I get antsy. If I'm sitting there, my mind's thinking about deals, I'd rather be underwriting properties and looking at stuff than

Steve: Branch is always going 100 miles an hour.

Zachary: A 100 miles an hour. Yeah.

Steve: Yeah. Is there any one thing you wanna leave the listeners with?

Zachary: I mean, I put a couple of notes to see if we talked about some stuff. Definitely stay humble. You know, there's a lot of people you you get, some success in this business, and it's easy to get arrogant and get, you know, all these material things and promote all that. No one cares about that stuff. Be humble.

Be real. Mhmm. You know, make sure that, you know, like I said, everyone's coming out ahead. You don't wanna be driving fancy cars to buy houses. People are gonna say that, you know, you're underpaying when you roll up in your sports car.

You know, again, I've had a home faster guy call me the other day, Hey, you wanna buy my, Tesla? I said, No, I can't be driving any Tesla. I'm driving my Prius. You know, it's more beat up than that Tesla. So, again, stay humble.

You always wanna leverage all your title, your realtor relationships, and your banking relationships to have the ammunition, to execute. And I always think outside the box. I mean, we talked on this briefly. It's all about the consultative selling. It's not just about what you can buy the house for.

How can you make that seller a winner and and and tap on all their emotional, tangible, and intangible needs and then cultivate consultative deal that's, again, mutually beneficial. Don't buy sight unseen as we spoke about. And, again, if, look at look at the macro picture of things. I think in this business, people say, and you ask me before, how do you manage all these homes without going crazy? I mean, it's easy to get caught up and you have a broken AC, you have a water heater, you could get stressed out about little things, but you have to look at the macro picture and things and kind of step back from it.

When you're in the forest, it's hard to see the tree. So when you kind of step back and you have that broader vision, if you have a 150 stock portfolio and three or four, even 10 of your stocks suck, but a 140 are doing really well, you're in a very good position. Awesome. It's easy to focus on those 10 or whatever that suck or went down that day. But if your other ones are really performing, again, macro perspective and your portfolio is continuing to appreciate, you're in a good position.

So try not to focus on, you know, those little hardships or overcome them through. And to me, it's exercise or whatever you're reading or whatever works for you. But, again, you don't wanna let that fully penetrate you and have this negative aura. So if you stay positive and optimistic about the macro picture of things, you can work through those temporary hardships.

Steve: Awesome. I think that's that's a great place to end. So, obviously, you're a buyer. Right? Cash buyer.

Zachary: Cash buyer.

Steve: Someone wants to send you a deal, how should they send you a deal?

Zachary: Yeah. Thank you. Appreciate the opportunity. Best way is texting me. I'm at 602405 602405 9225.

Text or email at zkeeps@gmail.com. That's kasinKatie,EdwardPaulEdwardSamuel@gmail.com. But, again, if you have a deal, text me an address, a price, some pictures, and I'll give you an answer whether it's feasible the same day and if it looks good to come out and see it for twenty seconds. Love to, you know, build some

Steve: more deals with you. Yeah. Awesome. Awesome. And, guys, if you want a copy of our script or assignment contract, go to realestatedisruptors.com, opt in, and my assistant will send you what we use.

And, again, if you do like this show, please share this episode right now because the rising tide does lift all boats. This is not a scarcity, market. This is an abundant, market. Everyone here is is helping each other. It's it's crazy in in Phoenix.

I It's how how much giving back there is. So with that, I think this is a great place

Zachary: to end it. Thank you. Appreciate the opportunity.

Steve: Thank you guys for watching. This was awesome and learned a lot. Likewise.

Zachary: Thank you. Thank you.