Four years ago David closed all his businesses and moved to San Antonio with his family to support his wife’s dream of serving our country. She became a captain in the Air Force. Now she works with wounded veterans at the Veteran’s Administration.
So David is a stay-at-home dad for the last 4 years. When he realized they would be in San Antonio for a while he started looking around for something he could do and still let his wife fulfill her dream. Two years ago he started investing in real estate.
He has the freedom to come and go as he pleases and he takes his children to the properties and educates them on what he’s doing.Robe de Soirée
He owns 40 doors. Both multi-family and single-family. When I talked to him he was in the process of buying 4 more doors without using any of his own money — infinite returns.
As you listen to this interview you’ll notice how David’s success is correlated to freely helping other people and the relationships he forms.
Transcription by SpeechPad
Damon: Hey everyone, my name is Damon Janis. I’m the founder of Eyes on Investors, where we learn from successful real estate investors and were part of Lifestyles Unlimited, which is the education and mentor group for real estate investing. I had a great interview today with David Fisher. I met David a couple of months ago in San Antonio, last January actually, and I immediately realized I needed to interview him. He was just totally on fire. He started investing in real estate in 2009. He’s already got 40 doors. His whole life has just completely changed. He’s so free and independent, and he’s built up a really great real estate investing business. I wanted to learn how he did it and share that with you.
So, this interview is a little different, because we started off just chatting in the pre-interview, and I realized it was so great that I wanted to just make that the interview. So I asked him, “Hey, can we just turn this into the interview?” He said yes. So you’re going to see some real casual chatting between the two of us, very frank discussions, and it’s all in there. It’s all on the interview. I think you’re really going to enjoy this.
He talks about how to run the business, how to make it viable, and do it successfully and how to just get out there and make it happen. He’s a great example of the results. He spends a lot of time helping people without even being compensated for it. He just loves to help people. He loves people, and I’m finding as I interview more people that that’s really common with a lot of successful real estate investors. They love people, they connect with people, and that takes their investing to whole new levels.
So here’s the interview with David Fisher. I hope you enjoy it.
Damon: Hey, David.
David: How are you doing?
Damon: Good. Let me turn on my video here. Oh, wow; I thought that hair was fake when you posted the picture on Facebook.
David: No. I’m crazy, I know.
Damon: So, are you liking it?
David: I don’t know. It’s just been the last night, so . . .
Damon: Oh, wow.
David: It’s a wife thing, you know.
Damon: Oh, okay. It’s fresh.
David: Well, no, I lost a bet about a month ago with my daughter. So I said she could dye my hair any color she wanted. That was the bet we made about two years ago and she remembered it.
Damon: All right. So let’s do this then. I’d like to talk just for a couple of minutes about what we’re going to be talking about and make a couple of notes, and then we’ll actually launch into the interview itself.
Damon: What I’m thinking of, my understanding is that you started your real estate investing in 2009. Am I getting that right?
Damon: Okay. So it’s just been a couple of years, and you’ve already got 40 doors. You’ve got some multi-family properties.
David: Right. A 29 unit in Houston and the rest are all here in San Antonio.
Damon: Okay. I know that the latest video you put on Facebook was a fourplex. Is that right?
Damon: So do you have any single family properties, or are they all multi-family?
David: No, I have three single families and I have two fourplexes.
Damon: Two fourplexes?
Damon: Okay. And then you’ve got the 29 units in Houston?
Damon: Was that a partnership, or did you buy that yourself?
David: No, it’s a partnership we me and one other person.
Damon: Okay. So a small partnership.
Damon: What else do you have?
David: Two fourplexes and three single families.
Damon: Oh, gotcha, okay.
David: I’m trying to buy another four unit right now.
Damon: Oh, gotcha, okay.
David: But the way I’ve been progressing is, my first four unit I bought all cash, and the second four unit I did hard money and finance. This third one, I’m not going to put in any money.
Damon: So you’ve done all cash.
Damon: And the next one you did hard money.
Damon: And this one you’re going with no money.
David: No money. So the first one I have 80 grand in it, the second one I have 20 grand in it, and the next one I’ll have zero into it.
David: The terms get better and better. I go from making 25% to a 90% return to infinite.
David: Good transition.
Damon: Okay. Yeah, absolutely, and that shows that it looks like as you’re getting more experience, you’re getting better at leveraging your money and all that stuff.
Damon: Okay. This is going to be so good. Okay. So one of things I would like to talk about is how this has changed your life. What was it like before? What is it like now? And just to provide some inspiration to people so they can kind of get a taste of if they would just go out and take action and start doing this, what difference it makes. So just in a nutshell, and of course we’ll talk about it more in depth in the interview, but what do you see as making a difference in your life?
David: Well, what it gave was a lot of financial freedom. When I first started doing this, I was in it for myself, and then what really inspired me was actually to help others. It’s kind of cool the transition you go through. That’s what’s exciting to me is, is I started off with, even when I went through Lifestyles and the two-day, I’m like, “I’ll just buy my own complex, I don’t need other people. I’ll buy one and I’ll be done and that’s it.” But what’s funny is, is as you get to know these people and as they grow on you, you find out that there’s a lot people who want to be involved, but they have full-time jobs and they can’t do it. Then they found me. Now all of a sudden, I’m working with other people. So that was the biggest transition for me. What it actually did for me and wife is, she was active duty Air Force and she decided she wanted to get out of the military and she said, “Well, you’re allowed to work again.” Because I wasn’t allow to work, because she might go overseas or something like that, and I couldn’t have a job for the past four years. Before that I was a businessman. I had two car stereo stores and a used car lot. So she allowed me to do this. So I attended Lifestyles and I said, “Boom, I can do this.” And I went at it 100%.
Damon: Yeah, evidently, ‘cuz in the last two years you’ve done a whole lot. Let’s see your video just froze up. Are you able to hear me?
David: There we go.
Damon: There we go.
Damon: All right. You know, I’m thinking, David, of trying a little bit different this time. We’ve been just kind of casually chatting and I’m liking that.
Damon: So rather than formally start the interview, let’s just keep chatting, and what I’ll do is I’ll edit it a little bit and I’ll create an introduction to introduce you, and then I’ll just start playing what we’ve been doing. Does that sound okay?
David: Sure, I’m easy. That’s sort of like Lifestyles. I never try to . . . I just go up there and [inaudible 06:31].
Damon: Excellent, okay. I’m finding I’m just more relaxed this way, and I found on the other interviews I did, once I said, okay, now let’s officially start, then I got all tense and it wasn’t the same.
So you were explaining, before we had the technical problem, how you had been doing in other business and then your wife said, I think she said she was okay if you did real estate. You went to a meeting and you were like, “Yeah, I can do this.” And you just took off like wildfire.
David: Right. So basically what I was saying is that my wife was active duty Air Force. She’s a captain in the Air Force, and the whole plan for her was to do that for 20 years. Four years before that when she joined it, I had to close all my businesses down to give her her dream. Her dream was to serve our country. So I had two car stereo stores, a used car lot, a hobby store. I had all these businesses going and they were all successful. But I closed everything so she could pursue her dream. She thought she wanted to do this 20 years, because I served my country, and she says, “I want to do that.” She’s very patriotic.
Damon: That’s really cool.
David: So I wanted to make that happen for her. So what I did then was, she joined the Air Force, luckily got stationed here in San Antonio, Texas at Lackland, which was great for us, because that gave me the opportunity to get to know this market as well. So she gets stationed here. I’m going on doing the stay-at-home dad for the past four years, taking the kids to school and whatnot. Then she decides, “I don’t like the politics of the higher-ups,” because she’s a captain. She just got announced they were going to make her a major.
David: She decided to get out, but she stayed in as a reservist, because she still wants to serve. Now she’s got a job recently with the Veteran’s Administration, because she wants to help the veterans or the wounded warriors. So it let her do her dream at the same time. But now it’s like, “Okay, we’re staying in this area, I can actually do something. So what kind of business can I create again?”
Well, I’ve learned that real estate is the best opportunity for me, because it gives me the freedom to come and go as I want. I can still spend the time with the kids; I couldn’t do that in my old businesses. I worked 16 hours days, I was a slave to the businesses. Well, with real estate, I don’t have option where I can be stuck to it. I can go around. I can bring my kids to all my properties, and I’m educating them as they grow up with real estate, which has been great.
Damon: Yeah, I saw that on the Facebook video that you just posted a couple of days ago. You see your kids running around in the yard. Your little son, he looks like he’s, what about five or six maybe?
David: Right. He’s turning five, and my other one’s seven.
Damon: Okay. Yeah, and they’re running around the property and you’ve got one of your rehab guys is working on the property. It’s really cool. You’re doing this activity with your children.
David: Right. And what’s cool is I actually go to places like Lifestyles. I actually bring my kids sometimes, and they interact with the people and the people love them, because my seven-year old will talk about NOI and CMAs and she knows what it all means. They’re like, “What?” And I’m like, “Hey, you’ve got to educate them young.”‘ So it’s just fun. I love it.
Damon: That’s awesome. So you’re actively keeping them included, teaching them obviously, and giving them that opportunity to learn and see you do this.
So this is really cool, David. I did not know that you had sold all your businesses to give your wife that opportunity. I mean, that says something about you to be willing to do that. Then you were able to find something that actually allowed you to continue to do things and take care of your children and give your wife that opportunity. So it sounds like it’s worked out really well.
David: Oh, it did and I’m having a great time. I’m the happiest that I’ve ever been in my life. All of a sudden with the extra income that we have, we’ve had more opportunities as well. Like I never had a housekeeper before. I have a housekeeper now. She comes in once a week and cleans the house. So I’m actually giving other people work, helping their lives out as well. So there are just so many cool things that come along with investing that you help other people along the way, which is great.
David: Now, it’s all of a sudden, I get all these phone calls from other investors, “Hey, how did you do it?” The biggest thing I want to teach new people is buy that first house. They’re always trying to think of the apartment complex or something big right away, and I really want them to learn, buy that first house first, start it, get in the game and go at it 100%.
So many people will come to seminars and whatnot and learn all this stuff about real estate and think about how wonderful and great is, and how it can change their lives, but they don’t take action and fight that fear. They go back to their normal 9 to 5 jobs and get back in that grueling corporate world, and they forget, wow, I could be sitting here and spending more time with their kids every day, like I do. I pick my kids up and drive them to school every day. Most people don’t have that opportunity in life. I do, I can stay home and do this.
David: It’s my choice. It is that freedom, and people don’t realize how powerful that free aspect is.
Damon: What you’re saying is that if they do want to realize it, then they need to just get out there and do that first deal.
David: Yeah, they need to do it and need to follow through. I have a lot of people that will come and bring me a property. I’ll look and I’m like, “This is a great deal, do it.” And they just don’t want to pull that trigger sometimes.
Damon: What do you think it is?
David: There’s a lot of hand holding and dealing with people. Everybody’s a different individual, but it’s that fear in life of everything they were taught by their parents and whatnot of negativity, of this doesn’t work. But it does work. It’s great. There are a lot of examples like me out there that you can do this within a year or two and change your whole life. My wife wouldn’t have to work if she didn’t want to. She does it because she loves to. That’s a big difference between people who have to work and people that like to work.
Damon: Oh, yeah. Yeah, that’s a huge difference. That’s true.
So when you first started getting involved in real estate, your motive was to make some money, and you said that you transitioned after you got started into wanting to help other people. So are you getting paid to help these people?
David: No, actually the way it works is I don’t work for anybody. I just do myself. I do it more for love right now. It’s people that want to do it, sometimes they have full-time jobs and they can’t do it.
David: Well, they might want to partner up with me and do deals together. Like this next four unit I’m doing, I actually had one of my hard money lenders, who lends to everybody, all of a sudden goes, “No, Dave, I don’t want to just lend you hard money. I want in the action. I want to do a partnership with you.” Which is really cool when they want to do something like that. It’s like, “Wow, a hard money guy wants to work with me.” So it’s the credibility factor when they see your track record, you build yourself up, but I have individual members call me all the time, they’re like, “Well, you know, I don’t exactly what’s going on here. My agent tells me this. What do you think, Dave?” I sit down a lot of times at lunch with members, all the time, and I don’t mind giving my time to that, because I want everybody to be able to do this and be successful. So it’s really fun.
Damon: This is just so incredible, David, because so many people that have been, and I’m speaking of myself too, for 20 years I worked in a cubicle and professionally I did okay. I had a pretty good career and everything before I got into real estate, but I just never believed that somebody would out of the goodness of their heart want to help other people, and you’re a great example of someone who loves and you’re so passionate about what you’re doing with real estate. It’s helped you so much that you literally are out of the goodness of your heart taking time out and helping people and not getting anything in return. I mean, you probably feel good about it, right?
David: Oh, I love it and that’s what’s cool, because I’m at a point now where I really don’t need more in my eyes. Everybody has a certain plateau. Some people want to make $100 million a year. I’m not that person. I want all my bills paid and everything, and living a happy life, and we have freedom. I mean, we just spent two weeks at Disney. Then we went to a Volkswagen show for over a whole weekend. I just went on a hunting trip for a couple of days. I never had that freedom before, and we have fun all the time now. So it’s like my way of giving back and helping other people. I want to see them do the same thing as me and there’s no reason that people can’t. It’s just wonderful. So yeah, I do spend a lot of time with other people, and that’s really what I want people to do.
Damon: Yeah, that’s wonderful. I’m finding too, as I’m getting more real estate done, I’m helping other people who are just getting started. They come to me with questions. I’m happy to help. In fact this Eyes on Investors interviewing thing that I’m doing, I’m not getting paid for it. I’m doing it because I really want to help other people primarily get started in their real estate investments so they can realize what you’ve realized, which is this new freedom. It’s wonderful.
So I’m interested in how you’ve actually done this. What are the mechanics of how you . . . by the way everyone who’s watching, David has an automatic zoom on his camera that I think has a mind of its own. So it may zoom in and out once in a while. But how did you get started? How did you get financed? How did you find the properties? How do you get them fixed up? Let’s talk through that.
David: Okay. My whole deal started with this. I lost a ton in the stock market, like a hundred grand. It was crazy. It was right when it was crashing and stuff is when I actually joined the investment group, Lifestyles. They said, “Get out of your IRA’s and all this.” I actually did it. I took the hit that year and said I’m going to go at it 100%. I bought my first deal cash.
Damon: So you actually took your money out of the IRA and you paid all the taxes and penalties and everything?
Damon: And what was left over, that’s what you used to . . .
David: Right. Which wasn’t a big amount, but I also learned something else about debt equity. I bought my house a few years before that. I sold a lot of my stock portfolio to buy this house. It was a foreclosure. I knew nothing about foreclosures at the time. I paid $190,000 for my house. Well, they appraised it at $300,000.
David: So without having to explain about real estate or all the different foreclosures and whatnot and equity capture, I captured a lot of equity in one deal without even being mentored at all.
Damon: You didn’t even realize what was happening.
David: Right. I just thought, wow, this is a great house. It’s half price. Let me buy it. So I bought it. I have three acres. You’ve seen this house. I love it. So I bought that house and I bought it cash. I created my portfolio. When we first moved down here, my wife was still in the Air Force, because we didn’t want to worry about bills and having all that over our head, so we had no mortgage. Well, I didn’t realize I could pull the money out that to really help me do my real estate.
So the first deal I did, I did with just some 401K and IRA money and stocks that I sold, and I bought my first one cash. That’s the one that you see on the Lifestyles site. There’s that video.
David: That was the first one. I pulled all the money I had invested in that. Six months later, I refinanced it, pulled out 80% of it, which ended up being all the money I had in it, plus I think I put $3,000 in my pocket. So had zero dollars in my first deal and I said, “Wow, this is easy.” So then what I did was, I refinanced my own house, pulled out I believe it was $260,000 out of my house, or $230,000, plus I had $30,000 left.
David: So then I put $260,000 into a 29-unit apartment complex I bought for $9,500 a door.
Damon: Okay. That was in Houston, right?
David: Right. And I have one other partner in that one.
Damon: Okay. So you have a small partnership in that 29 unit deal?
Damon: You bought it for $9,500 a door. How much is it worth right now?
David: I believe in that market they’re about 20 a door on average. So the market is up and down in there. It really goes off of your NOI and your occupancy rate and whatnot, but this was a total fixer upper and we really turned it around. When I bought it, I bought it 50% occupied. It dropped down to about 36% occupied, because we kicked out bad people. Then we got it back up to 90%. But right now we’re struggling a little bit. We’re dropping down into about 80%.
David: So you’ll have this up and down, but once it levels out, my goal is to that, because I don’t want to be in the Houston market. I want to be here in San Antonio with my people and buy a big 100 unit complex or a 200 unit complex with some partners.
Damon: That’s great. So that’s what your goal is, is to move into a 100 or 200 unit . . . [SS] . . .
David: Right. So right now, I want to have the down money so that I can be an equal share partner with people if I buy a big one, but I don’t have enough down money right now. That’s why I’m doing all these small partnerships, buying all these little fourplexes and stuff like that.
Robe de mariée blanche/ivoire
Damon: Okay. Interesting, excellent. So you did a bunch of rehab on the 29-unit apartment. The occupancy dropped to 36%, because you all the bad characters out. Then were you able to refill it back up with good tenants?
David: Yeah. We refilled it pretty quick. We got it up to about 90%.
David: But then you’ll find that when you move that many people in, there’s still some bad apples that still get through the process. So then I dropped back down to about 80%.
David: So I want to get it to 90% for six months, and then I’m going to sell it. That’s my goal.
Damon: Gotcha. Okay. So what kind of cash flow is that generating for you right now?
David: It varies. My expenses are about seven grand a month, and it brings anywhere from about 14 so about $7,000 a month.
Damon: So about 7 average, cash flow?
Damon: Awesome. Okay. Now the video I just watched on your Facebook, on the fourplex, I think you mentioned that even while it was being rehabbed you got tenants signed up to live in it.
David: Right. And what’ really great is, I built a team. Actually the guy that’s the contractor, Rob, he’s a Lifestyles vendor now. I brought him down from Pennsylvania. He used to work for me in one of my stores.
Damon: Oh, really.
David: I knew how great he was with people. He went off and used to do the cell phone industry, ran my own cell store for me. Well, he went into his own business doing tile work. Well, he was doing million dollar houses up there in Pennsylvania. I actually brought him down to do rehab work here in Texas, in San Antonio for me, and I built him a business overnight. So you give back to others in weird ways that you don’t expect. It’s like, here’s a guy I knew who was in my business a few years ago. He called me up and said, “Hey, the industry up here is horrible. I can’t even get jobs anymore.” Pennsylvania the market crashed, kind of, for the million dollar houses, doing the rehab.
David: So I brought him down here and he’s doing all my rehabs. Well, he’s the guy that actually shows all my units now, rents them out for me, plus does the rehabs.
Damon: Oh, my goodness. So you don’t have to worry about all that stuff.
David: And that’s what’s kind of neat about that last fourplex I just did was the appraiser came by to look at the property, and I don’t have keys to any of the units to show it to her. I didn’t know she wanted to see all the units. So I had to call up him to come over to show her all the units. What was weird about it was I was gone over the weekend, and actually we had a tenant move out in the middle of the night. We had it 100% occupied right away on this place. They moved out in the middle of the night. Well, I was going on vacation. I was actually hunting with some of the other Lifestyles members. He did a make ready on, and it was all ready by Monday be the time she got over there.
Damon: Oh, wow.
David: I didn’t even know he did it, which is kind of cool, because he knew I was away. That’s how close of a relationship I have with this guy, who I have do that and I give back to him, because he gets a percentage now. So it works out and that’s how we grow and grow and grow and build our team up.
Damon: See, that’s a really key point. I want to focus on this for a minute. So what you’re saying is that you don’t do everything yourself. You build a team of people who do a lot of work. These are people you trust. You build a business relationship with them, and then would you say that’s part of what enables you to live so much more free?
David: Yeah, that’s what it’s all about. For me, it’s about building a team and being smart about it. There are a lot of people that’ll buy fourplexs and they’re new investors. It’s the wrong thing to do if you’re going to handle everything by yourself. You’re going to be driving all over the city driving yourself crazy dealing with all these different tenants in all these various different ones.
Well, what I did was I found somebody who can do it for me. Your want to leverage your time. I can’t replace my time. I can replace my money. So what I found is I’ll find people that can do stuff for me; pay them and pay them well, and let them earn as well. It expands what they can do, and it’s also you growing. Yes, you’re given a little small portion, but you’re gaining that freedom. I want that freedom, because I want to be able to teach others. That’s why I can go to lunch all the time with people. I don’t have to worry about my properties. I have people handling it for me.
Damon: That’s awesome. So you’ve got Rob who’s doing the rehabs and kind of managing and working with the tenants. What other people do you have? What other services are you having done by other people?
David: Well, it’s sort of like, it’s even with insurance, just the different things how you grow. I started off with Spearhead Insurance, and they’re doing me a single family plan. Then all of a sudden as I grow and I get more and more properties, all of a sudden you get into commercial plans and all your expenses on everything just drop so much drastically as you get bigger. All of a sudden, my cash flow were I was, for example, one of my four units I was paying $1,300 on an individual policy, once I put everything under one large commercial policy, it went down to about $700. Well, look how much extra cash flow that adds each month. Just little things like that, and it’s all these different aspects and all the vendors and different contractors. I meet so many people and I ask them what their skills sets are, because that can benefit me later. If I get a house and I need foundation work, well, I’ve got three foundation friends. So you trade off, you introduce them to other people, and they return that favor back to you. That’s what’s so wonderful about this industry.
Damon: You know what I’ve seen, and I think you’re the 11th or 12th interview that I’ve done, with successful investors, and I’m starting to see this real common thread and you’re right there with it. That is that successful investors tend to network with people and they like people. It just seems like people who try to do it all themselves, they’re not rising to the level where I can even interview them, if that makes sense. But they have to just like people and connect with people, and you definitely are doing that it sounds like.
David: Yeah, and that’s the key. This is a people business. If you don’t like people, you should not be in this business. I hate to say it. If you don’t like people, be a passive person, invest with somebody else, because in this you’re always going to talk with tenants, you’re always going to talk with contractors, you’re out there, you’re fighting for these deals. Know your agents well. Get the feel of each other. My agents now know, when I offer a price, that’s what it’s going to be, and they’re not afraid to put them in at that price, and I get them at that price. So it is really a people business, and that’s a very important aspect of it.
Damon: That’s great. Now, let’s go back to financing a little bit, because you mentioned earlier on that the first property you did, you paid all cash and I think you explained that. Then you used hard money, and now you’re working on a deal where you’re not going to be putting any money into it. So, if we could, let’s go back and talk about the hard money. How did you utilize the hard money? How did that work, and how was that beneficial to you?
David: Okay, first I’m going to do a bit of education. Fourplexes in San Antonio, all the hard money lenders will not lend on them.
Damon: Okay. Say that again, your audio cut out there for a second.
David: Okay. Four unit complexes, duplexes, triplexes, hard money lenders in San Antonio do want to lend on those. It’s too risky for them. There are no comps. They have a really hard time, but my credibility is what will allow me to get hard money. So, a new investor, they really won’t let them do that. That’s when experience comes in. So one of the hard money lenders, Blake from Capital Concepts who started this for me, he actually came in and said, “You know what, Dave? You’ve such a good track record. We’ll take the risk on you and see if we can do this for other members.”
So the first one I did, the last one is the numbers didn’t just come out right, and I ended up buying that one cash.
David: Basically, it came down to, “Dave didn’t want to leverage his money. He didn’t want to pay out.” I wanted to have zero in deals, because that’s how all my other deals worked.
David: That first one, I ended up paying $80,000 out of my pocket to get the whole deal done from start to finish. But then the second one, I ended up having about $19,000 out of my pocket on this one through the hard money, which is still better than having $80,000 out having a 25% return. Now, I have $20,000 out with hard money and conventional loan and switching it around, but I got a 90% return. So now this next time I’m working with somebody, who’s a hard money lender, but they’re putting up all the money, so I’m going to have a what, infinite rate of return, because I have zero dollars into the deal.
So you have to get away from that, yes, hard money does cost more, into the factor, but that’s the cost of doing business. For a very conservative person, that’s hard to jump over that. So that was the hard thing for me in the growth pattern was to get over the fact that I have to help others by giving the hard money lenders a little more chunk of change to make these deals happen.
Damon: But in doing that, even though it cost more, if you look at it technically, you’re actually leveraging your money a lot more so your returns are higher.
David: Way better. Instead of that $80,000 I put in on that first one, I could have bought four more at $20,000 with four times the money and percent rate of return. It’s just so much better, but sometimes you just have go each hurdle and suffer the wrong way, to teach yourself, “Yes, let’s do that.”
Damon: That’s great. So how are you setting this up with the one you’re doing right now, where you’re not putting any money in? Where you’re not putting any money in; are you doing a partnership with the hard money lender on this one? How’s that working?
David: Right. Well, we’re just in contract now. It was basically something that was on the market for like $70,000. Well, we just offered $35,000 cash. We’re going to close quick. So he’s going to put up all the money, all the money for rehab, so this will have even better numbers than all my other fourplexes, because I’m getting such a good deal. But I’m staying in that same market, but we’re going to split it 50/50. He’s putting up all the money. I’ve found the property. I’ll do the rehab. I’ll organize everything. I’ll find the tenants, and he just puts up the money and he just wants a solid return.
David: So it’s a great match for him too. He has the security of I’ll make him a lienholder so that way if I screw up, it goes back to him. He can get a . . . [SS] . . .
Damon: Yeah, and then he’s covered.
David: It’s protecting the person you’re working with at the same time.
Damon: Well, it sounds like you’re structuring it in a really simple way, but in a way that’s beneficial to both of you.
David: Right. Right, exactly. And he’s happy because he doesn’t want just a hard money rate of return until I refi. He wants to get a much better rate of return. So on this last one where I’m making 90% rate of return, if we take 90% and divide it by two, he’s making a 45% rate of return. That’s better than he would have made in hard money.
Damon: Yeah. So is he wanting to learn how to do this? Is that partly why he wants partner with you?
David: Well, the guy I’m dealing with, his name’s John. He has a full-time job during the day, plus he does the hard money lending. So he doesn’t have time to do this himself. He wants people like me to work with. So you’ll find that thing where people have a regular job or a corporate career, they can’t do this full time, so they want to find people they trust and, “Let me just put my money with you and it will work out for both of us.”
Damon: Okay. See this is another interesting thing that I’m starting to see as I’ve been talking to more people, that the more experienced you get, the more opportunities that come so that you’re able to use less of your own money, more of other people’s money, which helps them, but it also helps you, because now you’re not having to put your own money into the deals. So you’re not only leveraging your money, but you’re leveraging your time. I see all this synergy happening as you form these kinds of relationships with people, and this is a perfect example of that where you’re going to do your next deal and not have any of your own money in the deal, but you’re helping your partner, John. He’s benefiting from it. It’s going to increase your wealth and your cash flow, and you’re bringing your expertise to the table. It totally makes sense.
David: Right. I was very leery of partnering. When I first started doing investing, I didn’t trust anybody. I’m from Pennsylvania. It’s a different world up there. Philadelphia area, you don’t trust anybody with your money. So I did not want to partner at all. It was the furthest thing from my mind. It’s funny how you grow over time. Then I realized, “You know what? I can really help other people.” And it’s funny, because I was very in it for myself when I first started investing, and now I’m in it to help everybody, because I see how it opens your doors and opens your mind to helping other people. That’s one thing with partnering, sometimes people join up right away and want to partner. I’m like, “Get to know the people, really get to know them, because if you’re investing this kind of money with people, know the person, make sure they have the credibility and the integrity to do this.”
David: A lot of times people will join and they will go to some type of seminar and next week they want to deal with somebody else. I’m like, “Do you know that person? Make sure you know somebody.”
Damon: Yeah, really get to know them.
David: Little things I want you to know, look at their track record if they have financial statements and whatnot, so you don’t regret it.
Damon: Yeah. That’s really good advice, very good advice. So as you’ve been helping people, is there any kind of funny anecdote that you can share about something just interesting or off the wall that you’ve worked with somebody that’s been new to investing that would be interesting to us?
David: Well, I kill a lot of deals, which is kind of sad, but I’ll have investors come up to me and their agents telling them how wonderful the deal is. I go, “Okay, let’s not think about the deal at all, and let’s just look at the numbers. When you came in here, what percentage did you want to make? How much equity capture? Does this meet your criteria? No.” But then they go, “But I don’t want to let these people down. I feel so attached to them. I’ve been working with them for a month.” I’m like, “Take your emotions out of this game. This is real. This is your money. This is your life. Don’t take these risks.”
Just one I think of is Josh, he’s an Air Force major, a good friend of mine, and he did this a couple of times to me. He would call me up all the time about different deals, and I call myself the deal killer, because I want him to be successful and he keeps trying to make these newish mistakes, but he learns from them each time and now he’s successful. He actually has seven houses.
Damon: Oh, awesome.
David: So he’s following the right path, but he’s listening to people telling him that have actually done it.
David: One word of advice, don’t take advice from people that just read books, that actually do it. Because there are a lot of people that will give advice at these different meetings and they don’t have any deals behind them. You really can’t learn from somebody who doesn’t do it. They have to actually be in the game.
Damon: That makes sense. When you were first getting started, what was it that you were learning from other people? You joined Lifestyles, I guess, two years ago or something, in 2009.
Damon: So did you avoid some mistakes that you would have made if you hadn’t had other people looking over your shoulder?
David: The biggest thing I learned was actually going through an apartment deal. I’m a little crazy. I was working like 20 hours a day on that apartment deal to get it turned around. But for a month straight, I was with a mentor step by step doing everything. That was the hugest learning curve you can get, is to have a mentor work beside with you every day. That was a mentor named Chewie back, and he was a great guy and he really taught me everything I needed to know. That really gave me all the tools to now teach other people. So it passes on, it transitions. I really like the small apartment model, and I learned a lot from him. That’s what helped me do all that I’m doing now.
Damon: Well, that’s awesome. This has been such an interesting conversation, David. I’ve enjoyed it so much. Is there anything that we haven’t covered that you want to share with people?
David: I don’t know. The point is you have to fix yourself before you do any of this. A lot of people come, I meet new investors, and it’s like they don’t realize that you have to fix your credit, you have to do this, unless you’re going to find partners that are going to partner up with you. But a lot of times people have and they want to buy a deal the next day. But they don’t realize you have to really structure yourself, get that pre-approval letter, following these first initial steps a lot of people skip over. You can’t get into the game until you fix yourself. So get everything lined up, and that’s really an important aspect and a lot people think they can do this the next day and really it may take a week or two, but you can get yourself in order.
Damon: Right. So you’re not saying that it’s impossible or even that difficult, it’s just you need to do that before you start. You need to fix yourself, get yourself in order, and then you’ll be able to move forward successfully.
David: Right. Anybody can do this at any income level. You have to have a reality check. You have to be honest with yourself and honest with people, what you have and what you don’t have. Don’t lie or try to build yourself up. If you only have five properties, you only have five properties. If you have zero properties, you have zero properties. But a lot of people act like they did all these deals and never did, and once they find that out, you lose all your credibility. You can never get that back. So be honest and if have a 680 credit score, tell the lender you have a 680 credit score before you even talk to them. Don’t waste their time or your time. If there’s something wrong, you can fix it and there are people that will help you fix it. That’s what I find about this whole industry, everybody wants to help you. Everybody wants to see you succeed. You’ve just got to be upfront with them.
Damon: It kind of goes back to what you were saying earlier about relationships, where if you do build credibility in the relationships, just be straightforward and say it like it is, then you’ll have more success as you work with these people. You don’t want to blow your credibility with people and ruin those relationships.
David: Exactly. You’ll find people come in and out of your life. I had tenants that moved out of one place and moved into another place, which is weird. You think you’ll never see them again, but you do. Always be nice to everybody. Don’t ever burn bridges.
Damon: Never burn bridges. Very good advice. So I think we’ll leave the interview on that. And, David, just thank you so much. This has been an awesome interview. People are going to really enjoy it, I know that they are. Thank you for giving of your time and your knowledge and experience and sharing that with us. I’ve benefited, and again I just want to thank you. I appreciate it.
David: Also you can search, if you ever want to watch my videos, I don’t know if you’ve looked at them, go to my channel, Fisherwholesale on You Tube.
David: I also have these befores and afters, and kind of what the numbers are so you can learn from them. So if you ever go to Fisherwholesale, like search Log Wood, one of my properties, it will give you an idea.
Damon: Perfect. Fisherwholesale, that’s a You Tube channel, and of course you’re on Facebook if people want to find you there.
David: Yeah, have everybody friend me on Facebook.
Damon: I think you have 600 friends on Facebook.
David: It’s fun. I could have 3,000 or 4,000, but I have another page for that.
Damon: You’re only one person. Yeah, exactly. All right. Well, thank you David. Have a wonderful day.
David: Okay, Damon. Hope to see you soon.
Damon: Thank you. Take care. Bye-bye.