Transcript for:
Insights on Distressed Real Estate Investing

I'm happy to have you here today Logan. You're like one of the top business professionals in real estate in San Antonio in my eyes. I mean I imagine there's people that own the Frost Bank and stuff.

Yeah. But I mean just in like my area of understanding you're at one of the top. I mean you're doing what 30 million last year?

Yeah we range on a low end we'll go down to 20 on a top end we'll go up to 40 that's kind of the range. It's interesting because sometimes that can be a good indicator of what you're doing. But us, it's strange because a manufacturing company that runs at a 20% margin, you can come up with where you're at. With us, though, one deal might give us a 40% or one deal might be a 90% margin.

So our top line revenue isn't a great indicator of where we're at. Plus, your deals are all over the board, too. That 40% might be on a whopper, a $3, $4, $5 million deal.

And the 90% is on a... $90,000 deal. So even percentages don't even make sense. That's right.

It's hard to track. But we were just talking about bookkeeping before we got the cameras rolling. That's why I'm getting into that point right now where I'm like, I have to get these books straight. And I'm looking at people like you that are well into business, and you're just like, yeah, this is all the spend. This is all our reports.

And I'm like, I wish I had that. I can't wait until we get to that level. I mean, it's happening right now. But it's just so crazy to see.

and learning from a person like you and that's really what i want to do today on this podcast is try to figure out like teach me something because i'm stupid enough is i'm serious i'm stupid enough if i'm learning something everybody else is that watching this is learning something so talk a little bit about first how you got into this like and then the overview of what you're doing on a day-to-day so i was working in the oil field let me back up i inherited some money uh seven figures ish Didn't do good with that. Within a couple years, I was almost out of it. So I thought, oh gosh, you know, I got to go get sober and clean and get a job.

And I figured this out or I'm going to be out on the street. And I ended up going to work in the oil field. That was the last time I got sober, got clean, and it stuck. Sober and clean on alcohol or drugs? All of the above, yeah.

Yeah. Actually, I stopped doing, I stopped drinking probably three or four years before then. But drugs work, man.

You know, when they say there's no research to prove that, you know, this drug does that. Yeah, there is. There's anecdotal evidence everywhere.

It works and people use them. Yeah. But that was, it was much harder for me to get away from drugs and then alcohol. But I did. And I got to work in the oil field and that was a great place to earn money, get a self confidence, work experience.

And then I started investing in real estate. At this point, I thought, man, what am I going to do? I'm making, you know. Within the first year, it tells me like a hundred grand a year, which is double what I ever made in the past.

But I also looked at it and said, oh my gosh, you know, it takes me one year. It's going to take me 10 years to earn back what I blew in a couple. Oh man, like I really did damage to myself financially. And I started looking at ways to try to earn money, earn more money and best.

And, you know, as you know, I bought a couple of lots downtown San Antonio that was back 10 years ago, right after the... mortgage crisis. Yeah.

So really quick on your age, like what's the age where you got sober, working oil field, started investing? What do all those ages look like? 30 years old, some 43 last week, married, have four kids.

Wife and I both work in our business. Wife works from home though. She does a little bit more than kiddos.

So this was 2012. I was working in the oil field and I got laid off in 2015. Okay. So that's basically nine years ago is when I went full-time real estate. But the last two years in the oil field, I was a project manager.

So I was buying land downtown San Antonio for $5,000 to $10,000 per lot for a single family lot. You're making $150,000 around that time? Yeah.

At that point, I was at the higher end of my spectrum. I'll never forget $187,000. That was the... Salary. You were rolling, got the nice truck, buying lots downtown, top of the world.

So I was living in an RV still because the RV cost me 10 grand and I was getting paid by the oil company for per diem. But I'd moved into the office working here. So I did have the nice truck finally, but I was saving every nickel. I'm talking, I was a miser dude, living in the RV, job in the office, just saving every dollar.

Yeah. Well, me too. I mean, I worked, you know, pipeline construction.

I got into utilities. Yeah. I was director of field ops.

I was living in an RV. I was living in a bus actually. So you're getting truck pay? Yep. No, no, we weren't.

I wasn't even owning my own truck. They were providing a company truck full personal use. So we had an option. You either get the company truck or get truck pay.

I chose truck pay because you get more. Yeah. Well, we didn't have the option.

It was like, here's your vehicle. Let's go. And I was like, great. Don't have to have to worry about a payment.

I had no payments. When I first got into real estate, I had. zero payment.

I actually had a truck payment because I had to buy a truck, but I had zero payments, like living on no payments ever, not a house. I had an RV bought for 10 grand, moved into that, fix it up, spent like four years fixing it up as I lived in it, you know, collecting 25, $2,600 a month in per diem, spending $800 at the RV park. But you're pocketing 1500 bucks a month, dude.

Yep, exactly. I never understood why the guys that didn't. They were staying in a hotel, $150 a night hotel.

Like, what are you doing? Get yourself an RV. Those are the same guys that were picking on me. They were buying brand new trucks, brand new Corvettes, new boats. And I was hoarding money so that I could make this big real estate play.

And they would laugh at me. Before I bought the new truck, I was a project manager. They knew I was making more than $125 and less than $200.

They knew our pay bracket. But I was driving an old crappy truck, living in a crappy RV. And they used to, like, joke. But I was also always wearing nice, clean-cut clothes. I was very clean-cut.

I had this Rolex. Not this one, but I had a Rolex I'd saved. And they knew something was going on.

They just didn't know what. Yeah, it reminds me of a story back home on the lake. There used to be this little trailer house that sat on this big lot at the lake.

And everybody would be like, dude, why is that thing here? Like, you know, all these nice, beautiful cabins. And you get this stupid trailer house. These grandfathered in parked down there. And then one year, the trailer house.

gone concrete coming in pouring boom big old house biggest house on the freaking lake guy retired built himself the big old house he always wanted in the lake and it's like i see that so often um just in life and business and i mean i knew getting into you know oil field that's what i was doing i was building my nest egg there you go i could do something at some point and pull the trigger and i did finally And then I lost it all. You know? I had to figure out how to get it back, but thank God it all worked out. So you're, getting back to you, now you're getting transitioned into buying these lots.

And you get laid off in the oil field. Then what happens? I mean, your $180,000 golden handcuffs are gone. There are a couple of things that happened in that era of my life, I'll say. And let me tell you about one of them that was really important to me.

I'd lost so much money just being basically an irresponsible, unemployed drug addict living off of inheritance. And when I earned all this money, it was a lot of work to earn this money. And I remember thinking, OK, I'm going to invest this, but I can't afford to lose it. I can't do this a second round. And I didn't know enough about investing.

So I was just looking at saying, how do I not lose? And as long as I don't lose and there's a chance for upside, but I got to protect this capital at all costs. Later on down the road, I'd read some.

like prolific investors'writings. And one of the things they said was protect capital, first rule, protect capital. And I learned that inherently because that mattered.

So that's why they have some of those first, second, third, fourth priority rules. But I found downtown lots in San Antonio would cost between $5,000 and $10,000. And this was a lot to be between 4,000 square foot and 15,000 square foot. So about an eighth of an acre to a half acre, roughly.

And you can get them cheap. And I remember thinking, this is downtown, big city, and you can build a house on this. Like there's utility in this.

You have utilities at the street. It's zoned appropriately. Like you can go build a house quickly on it. So I remember thinking it can't get worth any less than it currently is. It can't go down in value.

So I remember thinking that's my downside protection. If I go buy, I bought a couple dozen of them. That's where I ended up. And I thought.

Worst case scenario, if I don't hit this big, you know, tidal wave and all the values go up and I get rich, at least they're probably not going to go down. You were kind of buying those lots like gold and silver. Oh, yeah. At the end of the day, we're just sticking money someplace so we don't lose it.

It's safe. It's safe. And maybe you got opportunity for upside because you got the exposure. Yeah. So what ended up happening is I get laid off and right around the same time, I get a call from a local broker that wants to buy one of the lots for $190,000.

I'm in this thing for 10 grand. And I thought, wow, this recapitulate, I think the whole portfolio was in it for like maybe 300 or so. So I'm going to get 200,000 for one lot. I'm recapitalized 70% of this entire investment. And I still got about two dozen lots left.

Okay. A lot of things happened. The market had moved when I wasn't watching it. That signaled that to me. I'm also not a poor oil field hand anymore.

And I think I'm going to be a real estate guy now. There's no reason for me to go get another oil job. So I sold that one, converted it into cash.

And I did a total couple more, put some money in my bank account and thought, all right, this is my seed money. Let me go do real estate. Yeah.

So was it the, was it the capital that kept you out of the oil field or was it, um, the amount of work required or like what what's the reasoning not going back to the oil field because i think a lot of people get stuck in this idea like yeah i got a two hundred thousand dollar win i got a hundred thousand dollar win but they you know they blow through it or whatever and then they go back like what what was your driving force like i can't go back there uh well first my living expenses were low three grand a month would pay my rent and bill so i liked that my burn rate was low I also didn't want to work for these guys anymore. My bosses were nice, hardworking guys. They were wealthy, built something big and special, but I would always work side by side with these guys.

And I remember thinking all the time, this guy's not smarter than me. He's not harder working than me. Nothing.

If this guy can build his own business, I can do this too. And I just didn't want to go. I was also sick of traveling.

You know, I really wanted to like start a life, you know, meet a girl, start a family, all that. So those are the reasons I didn't want to go back. You talk a lot about your wife in your Instagram posts, and you show her a lot of love. When did you meet her? At that point?

It went away. Literally in that same juncture. A lot was happening, a lot at that time.

She was just coming off a bad relationship, and she just got a job at a local title company, which is, ironically, where I was doing deals. She went to the same church and was baptized there when she moved here at nine years old in the same neighborhood. that I was baptized in six months ago.

So there's all these weird things crossing. Then I bring in a contract in the title company that she's in. And I was living in my little apartment.

She was living in her little apartment. I just came off a kind of a crummy relationship, her too. Like all the stars aligned. That's cool.

That's cool. So getting back to the real estate then is you do that. Now what's your next thing? When did you realize?

getting in and i want to cut this kind of short so we can get into like the really meat of the bones like how to where you're at right now but like at what point were you like distressed real estate the title problems is where it's at well i'd flipped some houses did okay but lost really big on one of them and another guy said you want me to teach you how to really make money i'm like yeah sure so we went to the foreclosure auction together vetted the deals bought a couple and with those we wouldn't remodel them we just well we did a couple but most of the time we just go sell them on mls right after we closed. And what I learned is you can buy property for less than it's worth today, no matter the condition, and resell it immediately and make money. And that's so much better than having to do value add, construction, income, rental, whatever.

So that was it. I started doing that and I liked it. But as the market started to get tougher, more people were getting into the business.

Interest rates are going down. So there's all this capital flowing. And we go to the foreclosure auction and we could no longer buy something for 50 and put it on MLS for 90 the next day. People were driving the price up by competitive bidding and that went away. So I had to go pre-foreclosure and try to buy from people before the sale.

But in that same window, all these things are happening. And I remember fixing a property that I bought without title insurance, had lots of title problems. And I worked through that process and it was still a smoking good deal and it was done.

And I thought, whoa, there are a lot of untransactable properties in this Eastside neighborhood I'm familiar with. They haven't sold and all the others have. Let me see if I can go focus on these and try to solve these problems. And holy cow, went back to the well and that worked.

And that became our main business line nine years later. So all those properties over there had title issues? Yeah.

So in older neighborhoods or just there are different places where you can find lots of title issues. I kind of know what that looks like now, but generally speaking, there are tons of them out there. What's the most common title issue that you're finding in those areas?

Fractured ownership. Well, here's the lead. The lead is they're behind on taxes.

So you can scrape data all these different ways, complicated ways. But what I find is once a title problem happens and it gets out of hand and people give up, they quit paying the taxes. Then it shows up on a delinquent tax list.

To me, that's the best of all. So you look there. You can count on a large portion of them having title problems. You don't know what yet. But as you start getting ahold of those people, you start to learn, then you do your research to affirm.

So I went back to the East side and started looking at that and finding delinquent tax properties were the ones that hadn't sold. And that's how I started going down that route. Gotcha. How often, I'm always curious about this, how often is the tax problem related to that, like a title issue versus like the mortgage is done with and people just don't realize they have to keep paying their taxes?

You know, that's not a big driver there, the mortgage over. There's usually a problem. There's two common threads.

One of them is the problems are just unfixable and people finally just say, forget it. I'm giving up and quit paying. I'm not going to pay anymore if I can't fix this. But the other one is a lot of people pass away and their family is just disassociated.

And there are people that are owners of property that just have no idea. That's a big part of it too. Yeah.

So what's the percentage of people that are able to pay versus unable to pay? Like if you went on a percentage basis, you're looking at a tax roll, you're looking at anything over $5,000 owed on a... $100,000, $150,000 house.

What percentage of people can pay versus they just don't know they need to versus they got severe problems they can't? Probably half of those people don't even know that they own. The other half, most of those people can't pay.

When people have been able to pay in the past, it's been a stretch anyway. And there's six owners. They should be splitting it up. Someone's taking the responsibility and making these payments. But another.

phenomenon that's happened in the last 10 years is the appraisal districts have gotten sophisticated. They use really good data. They're really pushing the tax rates up a lot because the market's expanded so quickly.

So someone used to be able to pay $200 a year, $400 a year. It's almost nothing for making a lot. Now it's $3,000 a year. Well, you're going to think twice about paying three grand over 300. So that has caused people to give up and quit earlier.

And that event happens more quickly. That makes a lot of sense. So let's get more into you. Like your business model today, what let's, um, what's the, what's the, of all the business you're bringing in, where, where is sources from? Is your multi-tiered, there's multiple income streams.

What does that look like? So under the umbrella, I've got five business partners, total four operating partners. And then me and one partner are the managing partners.

Yeah. There's six of us total. Me and Bill are operating, like the managing partners and the four operating partners. Each one of them have a company. Me and Bill have a separate company.

And they run those businesses. He and I operate like, I don't know, he does finance and I do operations. It's kind of how we split it up.

And we do that across the companies. Most of those companies do a lot of distressed property acquisition. That's where a large part of our deals happen at that company level.

Outside of that, we do have a land development division with some partners, and we do have an industrial portfolio that has varying owners. Some of my partners in this business are owners, other people. So there's really three distinct things I look at.

We've got the industrial portfolio. It does about $80,000 a month in net operating income. Then we've got the land development. There are three projects happening right now, but those three projects total to 2,000 residential lots.

And then the distressed property acquisition. That's where the... you know, 20 to $40 million in annual sales occur at the company level there. Okay.

So that's the bulk of it is their side there. Yeah. That's where the money comes from. And at that point, we then use that money to deploy into other projects or whatever else it is.

But a lot of folks look at all the stuff I got going to here on apartment complex or warehouse and they say, how do I go find a distressed warehouse to buy cheap? That's not how it works. Yeah. I'm not shopping by asset class at that level.

Down here in the operating companies, we're shopping by distress and we convert that to cash. Buy low, sell high quickly or as quick as we can. That money is what we'll then use to go buy a warehouse or a ranch development or whatever or an operating business. Yeah, it doesn't matter.

That's why when I first asked you about it, I was like, how do I buy ranches that are distressed? And you're like, I don't know that answer yet. Go flip crappy properties to make money and use that money to buy the ranches.

Yeah. Yeah. So getting into the...

You got a coaching program where you're teaching people how to do them. Your largest asset, your largest operating area is distressed real estate. Now, we're not talking about fix and flip in distressed.

We're not talking about appearance-based distress. We're talking about underlying title issue distress. Yeah, this isn't physical distress. This is ownership. This is paperwork.

This is distressed from a financial situation. It's a little more abstract. And when you look at them, many times they're physically distressed, but that's not the distress we're looking at. How do we go, how do you go about first finding that distress title problem?

Because I can look at a home and be like, oh, a house is in distress, but you know. But does it have ownership problems? Yeah.

Does it have judgments and liens? I've been through every rendition of. County records, land records, all kinds of list stacking.

I've done it all. And what I've found over time is the best way to do it is look for delinquent tax properties. A large part of them don't have a mortgage.

Otherwise, the lender would be paying it. So there's a lot of equity. And then you talk about foreclosures.

Yep. Delinquent tax and tax foreclosures. Those are the best.

A large part of them have old ownership, ownership problems. So we start with the delinquent tax list up there. Where do you find that? Go to your county for a couple hundred dollars.

They'll send you a CD or an email file. You might have to have someone help you modify the file to be a useful format. And then you have this massive Excel sheet of lots of property, assessed value, delinquent tax value, last year paid tax roll value, address, owner name.

Yep. So then from there, you got the list, you got all the names, you got the addresses, you got the asset value, how much they owe on their taxes, how much they're behind. Yeah.

You go sort that list and try to figure out what do you look when you sort that, what do you look for? Because there's a lot of Yeah, when you start at the top, there's 2,000 on this list, right? Yeah. Well, and then there's people that owe 50 cents on taxes that have been paid.

There's people that own So I want to see somebody at least two or three years behind because just like a college kid who can't pay their credit card, after a couple months You keep lying to yourself, telling you're going to get caught up. Once you get six months behind, you know you're not getting caught up and you start to get real with it. Guess it's going to hurt my credit.

Guess I'm going to cancel this account. Same with property taxes. And it's about a 2.8% property tax rate.

So on a $100,000 property, you can run a formula in Excel that says, I want to see $10,000 in delinquent taxes. That's about three years of taxes. Gotcha.

I want them to be about that range. That leaves a lot of equity. There's room for me to pay.

fair money to the person, have a lot of equity and then pay off the taxes. So do you take off the top then too? You take out the bottom, take out the one to two. Do you, do you ever?

Yeah. Usually what we'll do is we'll try to get, depending on the business line, of course, but, um, what I usually recommend to people is we try to get that median price point of real estate in that County. And then, you know, we'll cut the very low stuff.

Like if the properties were less than a hundred grand, I would rather not mess with it because it's the same effort to do a hundred thousand dollars and $900,000 a year. Yep. It's just more worth your time on the big one.

So we'll cut out the $100,000 or less. Once you get into the couple million and above, we'll trim that off too. We kind of get there in that mid range.

So now you've got the list. You've got the list full, figure out the properties you want to target. About 50% of them are people that have problems.

You know, the other people probably figure out a way without you. Yeah. Now what do you do?

So I'll filter that by geographic location, sometimes by zip code. and really just kind of narrow down a smaller subset because you can't, we don't use big data like a lot of people do with, you know, 10,000 leads and a bunch of cold callers and burn through it. That's not how we do it. These require a little bit more research.

So once you narrow, you know, you narrow down your list down to a couple thousand, filter by a couple of zip codes you're familiar with. So it requires less research to value it. And you might get your list down to 500 or 800. At that point, you just start at the top. What's the issue for, okay, so a lot of people at a real estate doing wholesaling, a lot of doing this type of thing, they're just bulk pushing numbers to a dialer. They're calling them, hey, would you like to sell your property?

We want to make you a cash offer. Whatever their script is, they have various ways of doing it. Why doesn't that work or does it work with this?

What's so cool about it is when we get through the process we're doing, we call people. And they've usually not heard from others. When people are using the process you're talking about, they're the ninth person, the 12th person that's called them.

And they always hear it. Oh, my God, everyone's calling. When you look at your process, when you get that lead list and run it through a skip tracing program, the owner of record is who's skip traced.

Sometimes they'll pull other associated numbers, but it's usually that person. Well, when we're pulling a delinquent tax list, usually an owner is deceased or there are multiple owners. So you don't get enough good information. We actually. look up those someone in our office.

You can do use a VA, but we'll take the owner of record. We'll Google search them. We'll put it into the tax records to find out if they're deceased, where there are other people paying the taxes.

If the obituary pulls up in that County by their name, you see other owners and we'll take the ownership that we find after that search and put that into our CRM. And then we'll run a skip trace on all six of those people and dump those phone numbers in it. Then we'll go to the next file.

So it takes. But you're not, it's not a bulk data file. You can't do it on this.

You can't bulk data because you're calling either somebody that's already passed away. Yep. Or their owners.

Or their owners. Or somebody that's acquired that number because somebody passed away and now they're the new ownership of that number. And you're, like you said, you're talking to people that everybody else is talking to, but you're not actually talking to the person that can make the decision.

Yep. So when we go through that process, it's okay. It takes more time to do this.

We have live people in our office doing that work. But you don't have to be so volumetric because in the data minded wholesaling churn, you have to call 100 people to get two or three conversations. Here, if you're narrowing your lead list down like this, every 20 to 30 conversations gets you a deal or property.

So you have to make a lot fewer calls to get a deal. Much more efficient in that regard. Okay.

So now I guess let's back up real quick because it makes sense to me. But. That's because I've been through your coaching program.

What happens at the point of, okay, you got the list. What are you looking for exactly? When you're behind, like where do you start? Like what's the first thing you start doing?

You know they're behind on taxes. Yeah. But like how do you identify problems past taxes?

I don't go further at that point. And the reason is I don't want to get trapped in this never-ending cycle of research. You could spend half your day researching that file and everything about it. And then you call that person and they say, F you, I don't want to do anything.

Yeah. You burned all your time. So we want to do just enough research when we're looking at distressed property files to ascertain there is a problem.

Don't know what it is, but there is one. It's delinquent on taxes and let's get an owner on the phone. Okay. Once you do that and you get some, some interest with those owners, then we decide to dig deeper in the research. But only if we get them on the phone, they're interested in selling and we float very low purchase prices right off the bat in that those early conversations.

Then we'll start digging on the research. Okay. So what you're telling me, just so it encompasses my brain and everybody else's, is you're doing the little bit of research to find the obituaries, to find the heirs of that property, if there are any, which typically is an heirship issue. So you've got to find those people. Then you're skip tracing those phone numbers and calling those people pertaining to this one deal.

That's right. And do you do that as you're researching? Or do you be, okay.

We got those obituaries. Throw that in. Attach that one deal.

Let's move on to the next ones. Or you just stop right there and start calling. No, we'll do it more procedurally.

And the reason is it's really bad for a person to research call, research call. It's not a good workflow. And you're very inefficient because you're changing gears a lot. So we'll burn through and research 100 files and get all 100 files filled out with the data, the contact information, the basics. Then tomorrow is phone call day.

And we start working through that calling because you've cold called just like all the rest of us. I mean, you got to get in the mood. You got to get feeling it.

Like you got to have that coffee. You got to get a little bit of sun in the morning. Like you got to have your food.

You got to be ready. And when you're in the zone, you don't want to stop and do a bunch of research. We're in the zone call. Yeah. So you start calling.

What does that conversation look like? Oh, we roll play a little bit if you want. Yeah. Just so you know what that looks like before we do it. My conversation is more discovery oriented and much more.

I'm not aggressive. I don't do the typical, the Andy Elliott sales, you know, this offer expires today. And, you know, if you don't work with me, you're going to lose it.

All these things. We don't do any of that. I just start out my phone call saying, Hey, my name is Logan. I've got a real estate office here in San Antonio.

And I do projects that have a lot of problems, you know, title problems and stuff. This one popped up on one of my lists and, you know, it looks like it might have some stuff like that. I would be interested in taking a look at this with you because these are the kind of properties me and these are the projects I do.

Would you want to chat about that? I'm non-threatening. They know there's a problem. I know there's a problem.

Let's really role play real quick, real quick. Let's say you had a weird example, something on my head. You have a lake house, Medina Lake, let's say. like down levels like there's not a lot of property value out there um what you know about it is that there's a owner passed away there's six kids now um and you're getting one of the kids on the phone hey good afternoon evan how are you doing pretty good who's this good hey this is logan fulmer who are you why are you calling me hey evan i've got a real estate office here in san antonio um I may have grabbed the wrong person or wrong topic.

If that's the case, just tell me and we'll get off the phone right now. But these are the kind of projects I work on. You know, there might be some title issues here. What kind of projects are you working on?

I don't understand why you're calling me. Because I've identified there's some problems with this property, I think. There may be ownership problems. Which property are you referring to?

The one over down on the cove on Lake Medina. Oh, okay. Yeah, okay. What about it? Yeah.

Is this something you don't want to talk about? Did I get the wrong guy? Well, no.

I mean, it's just, you know, it's family-owned land, a house. you know, we've been having issues with, I don't understand what you're calling me for. What do you want to know about this property?

It's, it's my grand, my grandpa's house. Yeah. Usually folks in this situation are interested in doing something about it, refinancing, selling, or improving the property, but usually the title problems stop them from doing that.

Um, but I run a business that actually resolved these problems and deal with it. So I did identify that probably some of these problems, um, you know, I'll tell you what I actually noticed. When your great-grandfather passed away, it looks like you had seven kids, and I did notice that some folks have been paying the taxes, but some folks quit. Was that because they couldn't fix the problems?

Well, here's the back story on it. We have my uncle and aunts. They all want to use the property.

At one time, we all were using the property. Well, my other uncle wanted to sell it and then created family disputes. Now, some of us use it every once in a while, but it's... just not you know it's a conflict of family issue right so your uncle wanted to sell it yeah did anybody else want to sell with him it was you know they talked about it went back and forth and you know nothing's really been done with it you know right now half the family wants to sell it half the family wants to keep it you know that's really common i know that you guys probably think that y'all are on an island out there and this never happens to anybody and everybody fixes their own issues.

This is super common. We probably have 20,000 properties like this in Bexar County and Medina probably has a third of that many. I do have some interesting research. One of the guys in the office is researching through the files. I'd be interested in talking with you more.

I do have to disclose at the end of the day, when I solve these problems, it is usually per profit. And I usually do become the owner. Now, when you have ownership fighting and... A lot of times there are judgments and liens against people and delinquent taxes.

Each person has to have something a little bit different. But if you'd be willing to have a little bit more elaborate conversation, I could tell you if this is the kind of property that I would like to take on. And probably by the end of that call, you might decide, hey, this is something I would like to work with you on.

Or you might decide it's not. And I respect that too. Would you want to have that call now? Well, Logan, I just think, you know, I respect what you're trying to do here, but In the day we've been in, this has been going on for 20 years, how are you going to fix something that we haven't been able to fix in the family? I hear that question a lot.

Here's the problem. Have you ever hired a lawyer to try to help you on this? Well, we don't want to sue each other or family. Well, not necessarily sue each other, but a lot of the title issues that you may still be dealing with, like the incomplete probate or the probate that no one did for your grandfather, that's got to be resolved.

You probably have some other judgments and liens against some of the other owners and you now probably have a tax lien. A lot of that stuff does require an attorney. Have y'all hired one yet or got consulting?

No, we haven't talked to anybody on it. Well, let me give you a little bit of background. You know, do several hundred transactions like this annually. I've got lawyers that work for me on my payroll.

And I can promise you that if this is a property that fits in the criteria of the deals we do, I can promise that I'll fix it. But here's the way that promise looks. I'm not going to promise I'm going to do anything for you.

It gets real easy. You own one fifth of the property. And once, let's just say we come to whatever price there is, I'm going to give you X dollars for one fifth of the property.

And I haven't fixed all the problems, but I'll buy your share. And if we come to that answer, you can come to my office on Friday, pick up a cashier's check or cash, and you'll sign your deed and you're done. Now I'm going to have to deal with all these people in your family one by one. And I don't even know if you and I are going to work a deal out. But if we get to that point where we can't solve it.

How much money are we talking about here? You know, I don't know that yet. I would definitely tell you an answer if you could articulate all the problems exactly. I mean, that's a $300,000 house. So you're saying one-fifth.

Well, I mean, you own one-fifth, possibly. So I would only buy one-fifth from you. So we're still thinking around $50,000, $60,000 you're going to buy from me?

Well, here's an example I'll give you. So if you go to the Cadillac dealership and you have a brand new Cadillac, perfect, shiny, everything's great, and you sell it, you get top dollar. Go look at the NADA book. That's the number you get. Now, if you bring in a Cadillac that has a broken, a busted window.

quarter panel needs to be repainted and it's kind of sputtering a little bit, you're not bringing me a full price deal. And what you have is property that has some of those things. So during our discovery process, what we're going to work through and figure out is we're going to identify the problems.

We're going to tie a dollar amount to what the problem is and what it takes to get fixed. Then we're going to ratio that out to your ownership share. And that's how we'll come up with some discounted value so that I make a little money for all the work I do.

But you put some money in your pocket that's at least worth you walking away. Okay. Well, I mean, we keep getting these bills every week. You know, so.

A tax man never quit. Yeah, so I guess we could talk. I don't know if I'll be ready, but we could talk about it. Okay. Well, I'll tell you what.

At least I know you're up into a conversation. Me and my researcher are going to sit down and do a little research. You'd be amazed at what kind of stuff we can find in the land records and Ancestry.com and some of this. We'll put together a research project and we'll come back to you in a couple weeks. if you have any other folks in your family that want to participate in that call, you're welcome to bring them.

We can do it on a Zoom. Y'all can come by our office. We can do it on the phone, whatever you want. Just tell me.

And that's when we'll get back together, okay? My brother probably will be interested in it. So we can talk to him about it, but the other family members, you know, we haven't been able to make an agreement or anything. You know, there are a lot of ways to work those out, but one of the things I find that matters the most is he doesn't get along with y'all because all these things in family history, or maybe he's just got some craziness.

I don't know. But usually when it's a new person like me who's never dealt with the family before, if I'm really kind and careful and respectful, sometimes I can get him to work with me. individually separate from y'all. And the neat thing is, I don't know about Gus.

He's, he's crazy. He's crazy. Yeah. Everybody's got a weird uncle. You know what I mean?

Right. I deal with people in jail. We've dealt with people that we had to get, they were in the psychiatric ward and we had to get a, a guardianship appointed for them.

We've dealt with some of the craziest things. So I'll tell you this, my billable rate is really high and I'll be willing to work on this project to determine if we have something we can work on together for. for no cost.

So if Gus gets to the point where he's a deal breaker and you can't deal with him, I'm the one that loses out because you ain't paying me per hour to work on this. So let's do a little research. We'll get back together in three or four days, and then you and I can talk about that.

Okay. Okay. Logan, do you have a company? What's your company?

Can I do a little research on you? Yeah, I would encourage that. My name is Logan Fulmer, Asset Resolution Partners.

Pop it into Google and you'll find out who it is and what we do. And you'll actually find a lot of reviews about folks that we've closed files on. one. Okay. And you're, and you're located where?

Down in San Antonio. Oh, you're local here. Yeah.

Okay. All right. Well, thanks for giving me a call. I'll, uh, I'll be waiting to hear from you.

Very good. Now, the moment we get off this call, the things that stood out to me are there that Gus, he's the crazy guy. No one likes to deal with them. And half the property owners wanted to sell and the other half weren't so sure.

Yep. Next thing I'm going to do is now I'm going to grab my researcher and we're going to go digging and we're going to itemize in the tax lawsuit. Usually an ad latum attorney will go.

go find all of the owners through research, all those owners. I don't have to pry and ask you because sometimes that early call feels like you're prying. I'm going to go find all the owners in an obituary. The tax lawsuit or one of those places, then I'm going to call them all before I come back to you because Gus might just hate you because you used to beat up on him or took his girlfriend in ninth grade and he hates you now. Gus might sell his share for $500 before we even have our phone call.

So that's the process I'm going to call through. Everyone had the same. conversation.

Some people are forthcoming and want to sell immediately and walk away. But the interesting part is when I come back to you and I have a family tree built out, all this useful information, and I'm not mean or aggressive and very easy to talk with. These folks are like, whoa, these people know what they're doing. That's how the process starts. Well, we can do the second role play too.

That's three weeks later. You got all the information. Give me a call back. I mean, that might be even interesting to people.

people like, well, how does your offer get presented? You know, how do you present it? If that's something you want to share? Yeah. Um, what I try to do is assess the problems.

For example, you know, I know you and your wife got divorced a couple of years ago. Cause that was in our research. I'm sorry to bring it up.

Is that a bad thing or a good thing? And you'll tell me, yeah, I hate that B or whatever. And now I know, yeah, man, she really messed you up.

I know which side to go on. Um, but you know, I'll talk about that and say, look, I found found some judgments and liens against you guys good people have bad things happen to them You know, I've had things happen to me early in my life, but they're dollar amounts attached to that. So you've got. So what's the conversation look like when you present them?

You know, I know there's some judgment lien. No, I don't have no liens. I don't have anything. Do you remember that Amex card with a $19,000 bill in 2021 that defaulted and sent you a notice? Oh, yeah.

That's what my crazy. See, that might have been the crazy wife and you didn't get noticed. That's a bummer. But I'm happy to email or snail mail you the copies of those. I didn't originate any of them.

I just looked in the land records and found it. It's got both of y'all's name and your old address over there on Briarwick. Yeah.

So I explained. But that's a conversation for the second call. Yeah.

That's not a conversation for the first call. Usually not. Yeah, because really you don't even know that information yet because you haven't done enough research to get there.

See, the way these guys are working in our office, I call it a sales role, but that salesperson has been trained on research, deal structure, and all these things. So when he's talking to this person, usually the call will be a lot like the one you and I had. But if the person is really engaged and interested, some people are very forthcoming and they just start telling you all the names all the info when that happens sometimes we'll grab one of the researchers and they'll start researching as we're talking or i'm popping stuff into google and making notes trying to figure things out along the way yeah that's one of those yeah Hey, get over here.

Yeah. Got a ringer? Yeah.

Yeah, cool. So, okay, so let's back up for a second. Get off the phone.

You started looking into your research. What's the first thing you go to? What's, you know, with the information? Write to the land records in Google.

I want to type in Evan Big Price. I want to type that in, and I want to see if there are judgments and liens, other properties, other mortgages against your name, any affidavits that have information about your family. Well, I'll actually start with.

with grandpa. Yeah. And then I'll do him.

I'll do your dad and mom. Then I'll do you. We'll also put that same information to Google and see what comes up there.

Gotcha. But it helps us build out. So what we're ultimately looking for is we're going to build a family tree. Or maybe it's just one person.

There's no family tree. It's a single owner. But I want to look at a title report and see if there are breaks in the title chain.

If we have bad instruments of title, like a bogus deed or a messed up affidavit or airship or something. Or unreleased mortgage for a long time. time ago. I want to find all that. And we kind of lay it out and say, okay, there are five owners, you know, 10 grand in taxes, the property's worth a hundred grand.

But this person has a judgment against him for not paying his child support for 30 grand. That's more than his share is even worth. So I start to build those things out. When I have conversations with each person, I let them know, you know, of the a hundred thousand dollar property, you've got a fifth that's 20 grand, but you have all these judgments and liens that are worth 50 grand.

You really don't have any equity, but I'll tell you what, I'll give you a couple of thousand. Now I'm going to be the one that has to try to fiddle with these liens and hope I can get it fixed. I don't know if I'm going to be able to, plus my legal fees. I don't even know what they look like yet, but I can give you a couple of grand for your share. So how do you, how do you determine that?

So you got a $300,000 house out in Medina Lake. You got $50,000 in judgments on this one guy that owns a fifth. Those judgments only attached to his share, not the total property. Yeah, exactly.

So they're only attached to his share. And then you, you're still researching every property. Yeah. everybody else i mean i understand why you're waiting now to call that guy back to make him that offer but you're doing all this research you know end of the day you don't know what the legal fees you don't know if you're gonna get this done i mean that's exactly what i tell people why i can't pay huge amounts of money i explain to him look i gotta fix this cadillac up you know all the problems The problem is when you want to get Cadillac parts, there's a catalog and a price.

But when I'm fixing problems like this, there's no line item for legal fees because it could take hours or weeks or months. And there's problems I don't even know exist. Like there are other things that. are going to come up that we don't even know exist yet, which is why I can't offer a lot of dollars. I'm not buying your share in this property.

I'm buying your seat at the table. And y'all's Thanksgiving table is a mess. Everybody's fighting, throwing food at each other and yelling.

So I'm really just taking your seat here. And I hope I'm going to make some money. But truthfully, there are times where I don't. It doesn't work out for me.

Yeah. So, I mean, just from a back-end perspective, though, you have $50,000 on this one guy. You still got to pay him, plus you got four other family members.

I mean, you might be into this deal, $100,000 plus legal fees. And it's $150,000 plus legal fees on a $300,000 property that might need some work too. Where's your formula where it becomes too much? What I look at is, what's the property worth today? I don't look at ARV.

So for me, a $300,000 might be $600,000 fixed. But I'm looking at what's at work today. It's worth $300,000. You get $300,000. You got five owners, they each own 50% share of three, you know, it's 15% each has 50,000 equity.

That's a sixth. I start out super low because I don't know I'm getting into. So let's say they have 50 grand in taxes. You have 250,000 left in equity. Each person's shares were 25,000.

I mean, I'm offering a couple grand. And I don't know what these things are going to shake out to me. But if I buy everybody's interest for. 20 or 30 or 50,000 all in, I now have $200,000 to negotiate liens, pay legal fees, figure something out.

And at the worst case scenario, I can't figure all that out. I'm not going to pay the tax bill in the beginning. I leave that tax bill pending because if I run into an issue that's not worth solving or it's too complicated I'm just gonna let this thing go to the tax sale and the sheriff's sale will clean up all these title problems and I'll go get the excess proceeds that's my exit now the positive is if I explain that a little bit let's stop right there because that's important I think I think that's a poor you got let's say you got four shares of the city or you got three shares Maybe two shares.

I don't know what the number is for you. You've got two shares of the six. You don't want to clean up the rest. You can somehow cash out equity at the sheriff's sale? So when you don't pay your taxes here in Texas, any other states, the sheriff will sell your property to recover delinquent tax monies owed to the county and the roads and bridge department and all the stakeholders.

So when that auction happens, let's just say there's 10,000 owed in taxes and the property is worth 100, but it only sells for 70, $70,000 sale. The sheriff keeps 10,000 for the tax account. The remaining $60,000 is called excess proceeds.

It was the person's property who was sold. That's their money. The county doesn't keep the auction price. It only keeps the taxes and legal fees. The remainder is excess proceeds.

So with all these properties selling that have these excess proceeds with stuff isn't figured out, who gets to claim that? Where does that money sit? Just sits in the state or county?

It'll sit in the registry here in the county where the sale happened. And if. if a person doesn't go claim that money within a certain timeframe, it becomes cash of the counties.

Okay. Now you don't have to cure all those title defects to claim your excess proceeds. You only need to prove that you are an ownership.

So if you show a little genealogy report and show them like your birth certificate, you can go claim your share of the excess proceeds. Now in our case, I'll buy a bunch of shares and if I'm not going to fix it, it's not worth it. I can't, I'll let it go to the tax sale and then I'll go claim the excess proceeds. That's my profit. the issue is that could take several years and we don't love that.

If I can go in and take this property down, fix the problems and resell it, I can get it done a lot faster than that. But at the end of the day, the sheriff will always fix your messy title problem. That's your, that's your, that's, that's a, that's a beautiful thing about, I mean, it's not beautiful for the owners, but it's beautiful for like just keeping land revolving through the system.

Right. You know, like I think a lot of people don't realize, That when it goes to sheriff sales, everything gets wiped out. It just becomes the land again. Yeah.

Doesn't have anything attached to it. Can you go a little more like in depth, like explain that more fully though. Like, like what all gets wiped out?

So there are a few things that don't get wiped out. Okay. The judgment date and the taxes up to that judgment date are what are, what the property is being sold to collect, but post judgment taxes are not wiped.

So for example, if. The tax lawsuit is dated 2022. Taxes have accrued for 2023 and 2024. So when the lawsuit actually perfects and the sale happens in 2024, the next two years of taxes still attached to the property and they still need to be paid. So if you're buying property at the share of sale, you've got to know what post-judgment taxes are.

And post-judgment taxes are from the date that they filed the case. So if they filed in 2022 and now you're in 2024 at the end of 2024, that case is just getting fixed and sold at maybe tax sale in 2025. Yeah. You've got to go pay for this tax lawsuit, but you've got to go pay the next three years of taxes. That's a separate bill. Gotcha.

I think that's a little I never realize that. I think that's a, this could be a surprise now. Yeah.

Code compliance, especially when your property values in the last three years have inflated and we're seeing property values going from, you know, I mean the, the taxed, the tax, uh, you have to pay going from 3000 to 8,000 to 12,000. Yeah. You know, you think, and you're getting it for a 3000 plus whatever you're paying the County, right?

Like you got some surprises. Yeah. Now, another debt that won't get wiped out is municipal liens, code compliance liens.

Those will also have to be paid. Sometimes they'll be wrapped into the judgment because the municipality deals with it like that. But sometimes you'll have post-judgment liens there.

What else? Mortgages are usually wiped. IRS tax liens, if the county notices the IRS like they're supposed to in the judicial foreclosure process, they will be wiped. If they notice the IRS and the IRS doesn't respond, that's when it's wiped. If they don't notice the IRS, they won't be wiped and they'll actually stay.

Okay. Because due process didn't happen. Okay. I'm trying to think.

I think those are the main ones that will still stick. Yeah. So even if you're buying just straight from the tax sale.

You're having to do all this research anyways. Yeah, you do need to. Yeah, so I think, how many people go down to the tax sale and buy something and get stuck with something? You see it.

You do see it. Yeah, because they're just like, I heard that Logan said this is the best place to buy properties. And it is.

So when you would buy property 10 years ago, the purchase price was so low relative to the value, you could afford to make the mistakes that didn't matter. Today, stuff will sell sometimes 70, 80 cents on the dollar. You can't afford to make those mistakes, so you really do need to know what you're doing these days. Yeah, that makes a lot of sense. All right, so we've researched it.

We know the problems. Call the guy back. You're making him an offer, a couple thousand dollars.

You buy that one guy's share. Now you've got to repeat this step with every— Multiple times. Multiple times. Now what happens when you pay—say the first guy you talked to didn't have any— anything to attach that chair it was just straight up equity you're still making them a low offer just to i'm telling him i got gustavo your crazy cousin or brother who i still have not been able to get a hold of i still i don't even know what the context is going to be like i just can't pay you huge amounts of money for two reasons one i don't know what's coming up i could have some real crazy wild card stuff happening you know i gotta pay the taxes for the next three four or five years till i fix this gotta have budget for that And I'm, oh, and I got to make a little money. I got to like do this and keep the lights on.

And while you might think $30,000 profit or $40,000 is a lot of profit, for me to deal with this for several years and only make $30,000, I can't even keep my lights on. So I got to make a little more than that for a four-year project. Did you ever get into inner family where the families are talking again after this is kind of being resolved and, oh, you paid so-and-so? 10 grand.

Why aren't you paying? Why can't I get 10 grand? I own the same share.

That does happen. One of the things I notice is when we start getting ahold of people, we try to act as quickly as possible. A lot of these folks aren't super connected and attached and working well together. Otherwise they would probably have a better shot at solving it, but you do get what I call clusters. So you get three or four people and one guy's got a huge child support lien, but the other one has none.

And I started out offering, you know, 500, 2000, like very small dollar amounts. And sometimes that happens. One person gets more money and then somebody else comes back and says, you know, that I want more.

I tell them, I can't do it. They weren't encumbered as much as you, like they didn't have as much debt as you do on the deal. Um, or sometimes I get a lot of folks early on that will sell me their shares for low prices and the folks that want more money.

I push them off. I say, you know, I'd like to cash you out now, but here's the deal. I don't know what's going on. If you really think you want more money, I'm going to push you back towards the end. And you might be one of the last people I negotiate because I will convert unknowns into knowns.

So towards the end, it makes it easier for me to budget. But right now, you're very speculative. I don't know.

So I might wait for later. Sometimes we'll do that. So then you just after.

So you got it all done. You got all the purchases. You got all the shares bought. You still have typically things to fix even after you're purchased.

You're fixing. Yeah. Judgments and stuff.

You know, what's your timeframe look like on fixing everything? Along this timeline, I'm kind of ascertaining what all is out there and what my likelihood after doing this long time, you know, okay, I'm going to get this negotiated for this many cents on the dollar, or I can get this one taken off my title commitment because it's no longer collectible or it was indexed poorly, whatever. I kind of start to build that up along the way, but a typical transaction right now takes about 120 to 150 days. And when I. I first started this, I didn't know what I didn't know.

And I was learning my pipe. My cash conversion cycle was between 12 and 15 months. So a deal with an average deal would take me over a year to clean up.

As we got some experience, I started getting better at the process, finding more resources to make it happen faster. But I also started to pick more wisely. So if a deal is something that is not super high price and it's got 40 owners, and I can tell it's going to be a hassle, I'll just kind of look at it and say, you know what?

No, I want properties that have big enough problems where I can negotiate a good discount, but not such big a problem that it's going to be my new best friend for the next 10 years. I don't want that. So I kind of narrow in and the ones that have good spread, probably reasonable enough to fix. And we choose better now. So that makes a big difference.

This is so complicated. There's so many things that are complex in this. I mean, like there's, I understand from your point of view, it's like. That's pretty simple because you have the experience to back it up. You've seen it a hundred times.

50% of these are only multiple owners that you just have to negotiate separately. So half these deals are that. Maybe only a third of them are very complicated title issues that you have to deal with solving. So if you start out this, if you start out wanting to do this, don't try to take on all of them.

Just sort through the ones that only have ownership problems. And you can run a title report for $200 from ProTitleUSA. You send in, have them run the report. And if it's clean, except multiple owners, all you're doing is negotiating with owners. Now that's half.

I recommend people start with those, start making your money, start getting comfortable with the process. As you work through that, then you can start picking up other ones and testing them as you're improving. Gotcha. So I guess while I was trying to lean towards that, I was trying to help you sell your coaching program. But if you don't want to sell your coaching program...

Well, I do. We have a great one. But...

It's not rocket science, but I'll tell you this, you can go figure it out on your own. I did. But for, you know, our program's 30 grand. It's more than some people's, but not as much as some. Most everybody who gets into this thing makes that money or more back, usually more.

And what I tell people is, look, you're going to go out there and make a lot of money doing this. If you have any brains and motivation and you got the bandwidth to do this, you're gonna make good money. Paying someone like us to get you up to speed really quickly is a great deal. So this is a fast track education to getting you years of experience in a four month times, um, time span.

Yeah. So I think it's a no brainer. I always tell people if I could go back to the beginning of my career and pay someone 200 grand to teach me all this upfront, boom, you know, there are guys in this program on the experienced end that are experienced operators and want to add a business line that wholesaling or flipping. You know, one of the guys ended up picking up a couple million dollars, and he needed a million and a half in equity in our five-month program. Million and a half in equity, and his spend was like $400,000 or something.

So he would be on the top end of did really well. And then on the low end, I had a firefighter who owned an RV park with his dad. They were landlords, but they didn't really know lead gen. They didn't know negotiating. They didn't know any of that.

And he did a deal that was $400,000. I don't know, $430,000 sale price and he was all in it for 70 grand. Life-changing.

Yeah. And his ticket was 30,000 bucks. So it sounds like a lot up front, but if you can go make a couple hundred thousand, it'll only do one deal.

You've now learned this skill that pays for itself and really can do a lot for your business. Yeah. What I like about your coaching program is it's not so much based around information because a lot of these coaching programs, they're going to sell you the secret.

Like they're going to sell you what nobody else is teaching and this cool way to do this. You're like, no, no, no. We're going down to the title office.

Yeah. We're getting a lead. What I'm selling you is the experience behind it. When they're like, hey, there's this abstract judgment. What is that?

Like you're selling them to walk them through that, to fix that. Our real support. Yeah, exactly.

Yeah. So the first four to six weeks is education. And I'm on this zoom three hours at a time, once a week, like just pounding on this education in your head. After that, this deal support, you guys put together your program. We help you do it, pick your market, start getting on the phone and we're going to help you piece the deals together.

Yeah. I just think most people just don't realize from the start of getting into something like this is yeah, it's easy to go find the deal. It's easy to go find the problem.

The hard part is actually Working through that problem. The hard part is just from a knowledge standpoint, you've never done this before. You might have a little bit of knowledge in the space. You understand what title commitments are and you understand this, but actually fixing those title commitments, problems, and getting into like the fine details.

Working with somebody like you through the coaching program, it's going back to like the, oh yeah, I've seen this a hundred times. This is how we're going to fix it. Yep.

Like it's, don't worry about that. Like. We'll worry about that at a later date, but you're focused on the wrong thing right now.

We need to figure out this first and figuring out if there's enough money in this. Because this deal might not be worth anything versus you sitting there for 100 hours trying to figure out one thing that you shouldn't even be worried about. You don't have to do what we did. We spent 10 years learning every facet of this in volume, spending all the money up front. You don't have to do that anymore.

In four or five months, we can teach you all that framework while you're doing deals and making money. Yeah. And like you were talking about big numbers here. So I think a lot of people listen to this, like, this is all great information, Logan. Like, thank you.

I don't have 400,000 to spend to make 1.5. The crazy part is people spend 200 grand to buy and remodel a house and they go sell it and make 30, 40,000 when they're done. We're the opposite.

We're spending 40 or 50,000 to buy the property to sell for 200. Yeah. So it's a much more efficient use of capital. If you can get your hands on 30 to 50 grand, you can do one of these deals.

Plus, plus if you can't. And you make big money. And if you can't, through your coaching program, you're doing JV with everybody. Oh, dude, new JV would feel like crazy.

Yeah. Will, sometimes folks say, dude, this sounds like a good idea. You've proven it works. But when it comes time to write that check for their own 20,000 to buy those shares, they get scared.

And I tell people, I'll put my money where my mouth is. I will never encourage you to get into a deal that I wouldn't do. And if I tell you don't do it, you damn sure better not do it because it's not going to work out well. Listen to me. But if I say you can do it, you should do it.

And I've had folks start out in the beginning and say, well, I didn't plan to offer JV because I want folks to know. I'm not trying to bring you in and take all your money. I want you to do these deals and make the money. But if there's a reason you're nervous, I'll write the check and we'll go 50-50 on it.

We'll use my money. That way if somebody gets strung up, it's me. Okay. Well, now let's take this from a different, I know you probably, you offer this in some way. I know you would offer this.

I don't know if you market it, but let's say somebody's listening to all this information. They're like, okay, I don't want to spend 30 grand until I test it out and try it. At what point of collecting information, having people say yes, would you say, don't worry about the 30,000.

Let's just do this JV deal together. You know, not coming through the coaching. You did it by yourself. You're willing to learn all the information, go through it, figure out all the things. Now you need my help.

What does that person need to bring to the table for you to help them not being in your coaching program? So what juncture do you need my help? That's at the time where you got to pay for it and you need the capital or there are problems to solve and you don't know what the answers to it are.

That's when you need me. So I get people call me all the time in my DMs. I found this vacant house.

I can't find any of the owners, but it's behind 20 grand on taxes and all the neighbors say it needs to be fixed. That ain't a lead for me, dude. There are tens of thousands, there might be hundreds of thousands of those out there. I need you to have found an owner and gotten them willing to sell at a very low price. You need engagement and you need interest on low pricing.

You don't have to have the contract signed yet, but if you have one or more owners and they're willing to walk for a low price, that's when it's time to call me. But don't call me when you found this vacant house driving on the way to your shift. Yeah.

It's too early. Yeah, it's true. Colleagues talk to an owner first and get some yeses. Right. I think, I can't remember.

I know I contacted you about it, but when we were closing on the ranch, we had a title problem. I can't remember if I talked to my attorney. Oh, yeah. I remember.

What was it about? So the issue was we were trying to close. Everything was ready.

And then. For some reason, we overlooked this title issue where, or it came up while we were trying to close, but the title issue was that it was an ownership issue of who owned what land. So the grandfather owned 500 plus acres. He, when he passed away, his sons got, you know, equal shares and his wife got equal share. Like it was like a wife got half and then the sons got half.

Well, then one of the sons didn't want it, so he sold his share back to the other brothers and the mother. Okay. So that happens.

He's deluded into the others. He's deluded into the others. And then the mother goes, okay, basically in a verbal agreement, when the mother starts getting sick to pass away, obviously hers goes to these two brothers.

But she... They already kind of set up a fence line between the two brothers. And this side was theirs. This side was the other brother's.

Mother passes away. Through the last 80 years, they said this fence line is the dividing line. Oh, wow.

But that sixth of a percent that the brother transferred back to the mother was never told who owns that. So it's still mom's. Still technically. Yeah, it was kind of weird.

I don't remember exactly how it was. It's been over like two years, but basically we were trying to associate who owned that six percent and one brother said, you know, well, I still own a sixth in the whole ranch. and owned 5-6 on this side, and the other was the same way.

I owned 5-6 on this way, but won 6th the whole ranch. They didn't know that problem existed until we got to closing time. So we wanted to buy, and one of the brothers didn't want to sell. He's like, no, you're not selling. Right?

So we got to the point where we kind of went in and we're like, okay, what do we need to do to work this out? Like you have your side of the fence. I have my side of the fence.

We were working with the sellers. there with the title company everybody trying to help work this out and at that point they were saying no like they were just like nope we're not selling you're not selling we're not selling our one sixth like once they found that they had power over them they decided they were going to use that power to stop the sale oh gotcha yeah the leverage the leverage so basically i i think at the time i was calling you i was like hey what are our options here what can we do like neither side of the family wanted to hurt each other um One wanted to live in more control than the other did. But basically, we were just assigned deeds.

Hey, you guys get R16, you get R16. Hold on. Sorry to interrupt you, but you know that just brought up a point that I want to help develop a little bit.

The context matters. One says, I don't want to hurt the other, but I got leverage over him. Earlier, when we did our role play, you were saying, you talked about differences of opinions and the way people thought and talk and all this.

You know, it's interesting. One is actually kind of damaging the other. And while he might be a nice guy, he's impeding the other person for accessing his inheritance.

So while I'm not trying to hurt him, I don't want to sue him, but I'm going to stop him from getting his inheritance. Like, do you see that a lot? And folks say, my gosh, Logan, your business can be really aggressive. We do a lot of litigating in this field.

And folks say, oh my God, well, You know, I don't want to hurt my brother. I want to get out of this, but I don't want to sue him. Hold on.

You're going to stop him from getting his inheritance. His financial future is being damaged by you, but you don't want to sue him. Like what the heck?

You deserve to be sued, dude. You're damaging his financial future. So it's interesting the way people normalize, rationalize, and downplay some of their behaviors and actions.

Yeah. I look at it and say, sue the motherfucker. Yeah. Because he's hurting you. That's eventually where we got with this deal was, you know, they were like, you know, our seller was like, listen, I don't want to sue you.

If you force my hand, I will. See, that's where he had the guts and he was willing to rise above the politically correct kind words and see it for what it was. Dude, I love you and care about you, but if you're going to hurt my financial future, I'm going to sue you, dude. Yeah.

Yeah. And it was funny because when those words were spoken, oh, God, the whole thing erupted. Like, everybody was like, people crying, you know, like, family members crying about it.

You know, it's funny. Sellers cried about it. Nothing changed the day before that to the day after that.

But someone used words for what they really were and decided to defend themselves. Yep. Isn't that funny?

Now it's emotional. Now it's a big deal. Nah, dude, you've been doing this stuff for years.

Yep. But now it got real. Now I kind of gave it back to you. That's right.

You know, like. Just in a different context. Yeah.

I don't think we ever used this, but like, you know, because the seller asked me, what are my options here? Because he's ready to sell. We're ready to close. He's like, what are my options here?

And this is the only thing holding up this whole deal. And I told him, well, you, we can threaten to sue. That's not going to do a whole lot. What's really problem was we would have to, you'd have to sell the entire ranch. the whole one sick share you'd have to sell like if a worst case scenario.

The partition either gets cut up or the judge orders the whole thing to sell. And that's the worst case for me because I'm not, I don't have many rights anymore to buying more than just what you have to sell and it could go to a higher bidder. There's all these different things but that's your option, you know.

And when I told him that and he realized that maybe this isn't the best thing for Evan, this might be the only way to do it, that's what they used to. You know, further the deal. And then it was like, okay, let's send the papers, eat it across. Nobody was losing anything. Right.

He still had his ranch. The other guy still had his ranch. You know, they were just trying to hold up the sale of the next door. You know, this is another good topic about this stuff, litigation.

Let's talk about that. Yeah. Let's do it.

Early on when I got into real estate, folks, wise men would tell me, you need to get yourself a good lawyer. And I remember thinking. I'm just buying and selling property. You know, I don't know why I need that. Today I look at my business and...

Now I know. I was told in a deposition last month that apparently I'm a plaintiff in at least 30 lawsuits is what the defendant's attorney pointed out. So he was trying to pick on me and say I was a bad guy. But I had to clarify for him that I'm in the business of solving problems that people can't solve on their own. own.

And many times when people can't get along, you've got to get a judge to solve that for them. That's why I do it. And it is part of my business.

So I'm not a vexious litigant who's out there just raising cane everywhere, but I go solve the problems, the worst of the problems, the ones that other people won't pay for or won't fix on their own. So what does a normal litigation look like for you? What's the most common form of litigation you're getting into with these deals?

Two really common ones I see are co-tenant claims and landlocked properties. Okay. Well, how do you get out of those?

What's the litigation process? What are you I mean, what's the argument really? Because all litigation is is an argument. Yeah, you've got a problem with fix it.

Yeah. So on the landlocked property, what inadvertently happens is one property property doesn't have access to a main road, a public thoroughfare, and you need to get that. Usually we'll approach the other party and say, hey, can I have an easement?

Can I have a driveway? And the other party being a non-associated owner. Sometimes it's associated. Sometimes it's not.

Sometimes it's a relative. Sometimes it's just a completely different person. But we'll ask for an easement or a driveway.

Sometimes you get lucky and you find the easement already recorded in the land records and it exists. It's just poorly in that. So it's there.

It's there. You just got to dig. Sometimes you'll get lucky and the first person in the front says, okay, I'll sell it to you for this much, but you got to improve it.

You got to put the fins and you got to put a culvert, but pay me this much. You can have it. And in the other cases where they say, ain't doing it.

No, there's no price. I don't want to do it. That's when you go back and decide, okay, I'd like to pay you the money.

It's going to cost me in this case between 20 or 30,000 to sue. and get the easement. So I'm willing to pay you that money. What, what right, right.

Do you have to get these been through? Is there a, is there a law in Texas that requires everything to have access? So it's, it's not legal to subdivide in a way where a person doesn't have access.

It's not illegal, but you have legal subdivision rules. And if you don't follow those, then you could inadvertently create landlocked property. Okay.

So there's four common law remedies in Texas. You've got got implied easement, prescribed easement. Gosh, I can't remember the other two now.

There are two others. So four total. And the way you choose which one that you have to follow is what's the fact pattern.

So one of them would be, there's a property that landlocks the back property. If a person has been driving over that property for 20 years, daily, weekly, monthly, continuously, you're an implied easement, then you can sue and basically make permanent the driveway you've been using. That's one of them.

Another one is, well, an implied easement is when you sell a property. Let's say you sell this back property. Here's your road. Here's a property.

You sell this property and never give an easement to that person, and you're the front track owner. It's implied that there was an easement that came with it when you sell it. Because it's legal to. Right.

Although you never drew it up and granted it, it was implied that it came with it. came with one. So you end up having to sue to get that. So if this property that prevents, that is between your subject property and the road, if that's the property that was subdivided to cause this locking event, then that's the person you sue. And as long as that fact pattern lays out like that, you'll get your easement.

Okay. So let's say-So you need to understand what caused the landlocking event and what the fact pattern is. And if it is one of the- the four common law claims and it aligns very well, then you want to do that deal and you got a great shot at it. But if it doesn't clearly align to one of those four, I'd be careful because that could be a real losing case. So do you ever, I mean, before you go, you talk to the landowner, you say, hey, you know, Bob, you bought this land.

You know, you thought you were getting 30 acres. You bought this 20 years ago. You weren't the guy that subdivided, but you know, the guy that subdivided made.

I made a mistake. We want to buy some of this land from you. Are you paying a market price for that easement? Or what are you saying for that?

There are a lot of factors that go into it. But one of them and the part that a lot of people miss is what's it going to cost to improve that easement? So if it's only 40 feet, let's say 20 foot wide and 40 foot long. All you gotta do is scrape off the topsoil, put down a bunch of base, water it, roll it, do that a couple of times and maybe put a fence on each side.

That's cheap. You know, it doesn't cost a lot of money, but if it's 1500 feet long and topography changes and you need some drain pipes and things like that, it could get very expensive to improve that. Oh, I know. That's what I do. That's why I build roads.

So you've got to look at it and say, okay. I need to have some profit. I need to have some equity.

Let's say I paid a hundred grand for the property and it's worth five when you get it unlocked. I might be able to give this landowner 50 grand for the easement, spend a hundred on the improvement. Now I'm in it for 200 and it's worth three. I still have 300 or it's worth 500. I paid a hundred for the land and a hundred to get the easement and the improvement.

Now I'm in it for 200. It's worth five. Okay. I have equity, but you kind of have this like math equation you have to back into.

It can be a challenge because sometimes there are unknowns there again. So I guess what I was going to get to too was if that guy is saying, well, you don't have your rights here. You don't have any I don't know of anything.

I don't want to sell you this property. Do you ever come with him to the evidence and be like, look, here's our evidence on that? I do, but I don't lead with that because the moment you start leading with that, he looks at you differently. Oh, this boy knows.

Oh, this boy came for this. Oh, he was ready for a fight from the get-go. I don't want to do any of that.

Okay. I usually try to talk it through nicely, politely. And if I get to the point where they've just shut down or they're being unreasonable, I usually just cool off and say, well, maybe we'll revisit this later. Maybe not today.

I'll come back again, see if I can catch him on a better day, see if I can catch him more calm, see if he's had more time to think about it. And I'll give it a shot again. I usually do this three or four times.

Unless he tells me, F off, get lost. I take several runs at it real nicely because the moment you cross that boundary. And you can't come back from it. You can't come back. Yeah.

That's right. Yeah. Okay.

You're going to sue me? Sue me. Yeah.

I've been through a lawsuit before. Sue me. See how this works out for you.

So what I find is when I do have to have that conversation, I have it very well prepared. I have the case law printed out. I have examples of it. I have a great diagram.

You know, sometimes I'll even have it laid out with an attorney and his information. And they're like, I just, it's a nice, well-delivered package. And I tell the guy, look here, Evan.

Man, we've been talking for three months now. I don't know. We've had four lunches.

I stopped by here twice. I'm in a tough spot, dude. Doesn't look like you want to give me the easement and it's not even about money. It just basically say no. We've been dancing and I just, I've been trying, but I don't think we're going to get there.

This isn't what I want to do. I want you to know that. I really want to pay you for it and just going down the road. That ain't happening.

I can tell. So I have this packet. This is a common law remedy in Texas. I got to get a lawyer to do it.

I've done this, I don't know, at this point, a dozen and a half times. I know how it works. I'll win this.

And I'm going to leave this packet with you. I'd encourage you to talk with your attorney about it. This is my last kind of run at this. You call me now. Yeah.

Yeah. So talk to your lawyer, show him this, see what he thinks. Would you give me a couple of weeks and call me back?

I want to do something in a couple weeks. This is, I'm showing you my cards, dude. Hopefully we can get somewhere.

I don't, I don't want to file a lawsuit. I don't want to pick a fight. I don't want to do all this.

And I'm speaking heartfelt and truthfully. This is honest. And I really would do it the right, I would rather do it the way where we do it together.

Yeah. But I do want you to know that if you refuse to work with me, I'm going to do it this way. I'm going to win.

I've done it a dozen or two times before. I got the money and I, I will absolutely win. So let's try to do it together, please. Is there a time in your career that's in real estate that that's shifted for you? Just like, just drop the lawsuit.

You know, now you're like, I don't even want to drop the lawsuit. I'd rather negotiate it in. I always would rather negotiate. But sometimes when I deal with people that are abrasive, aggressive, condescending, right off the bat, that's when I'm like, you know what, dude? You're going to learn today.

Yeah, we're going to teach you a lesson. I try to not do that, though, because more times than not, you can really get something done by negotiating. You just got to have a lot of patience.

You got to really work through it. Yeah. That's what I try to tell people, too, in a different aspect with creative financing is creative financing is not here's a block of plan, a way to do this creative financing. Let's apply it to this situation. Creative financing is sitting down.

Negotiating really trying to figure out what exactly that person wants. And it takes like hours, like tens of twenties, hundreds, sometimes hundreds of hours, just to get to the point where the guy's confident enough to tell you, Hey, this is what I need. You know, this is what I really want.

I know you're not trying to screw me over here. Yeah. You know, just get to the point where he's confident enough to tell you. And then trying to design a creative finance deal around that, you know, and that's, you know, all the good creative finances deals I've done. It hasn't been a sub two.

It's been a, you know, this is what this guy wants. This is what I can provide. Are we able to work together? Here's, here's, it's worked for you, worked for me, right? That's right.

Yep. Okay. We got to create a finance deal. That's creative finance.

That's right. I mean, love Pace Morby, but like a sub two is not creative finance. At this point, a sub two is literally just a form of a loan or a structured loan assumption, not creative finance. Right.

So the landlocked land is one of the really common causes there. Another one is co-tenant disputes. So let's just say me and you are brothers and we inherit daddy's property. The way the property code works in Texas, and it's very similar in the rest of the states, the United States, you have an obligation to pay your share of the taxes, maintain your percentage of the property when it comes to maintenance, service, upkeep.

And you also have a requirement to not threaten my equity and not commit waste. I also have that same requirement under the Texas law to protect your equity. to pay my share of the bills, all those things.

If either of us are not doing that, one of us has a claim against the other. What's that called? It's called different things, but you have equitable reimbursement claims if you don't uphold your share. So you have an obligation to basically protect my equity and manage your share of the property. So do I.

If I don't do that, you have a claim against me. If you have to pay things on my behalf, you now have an equitable reimbursement claim. So let's put that into play in the real world.

We inherit a ranch together. I don't pay the taxes. You do.

After four or five years, that number adds up. I owe you for the half of the taxes you paid on my behalf. If I don't pay you, you can actually sue me for that. And let's say I don't have a lot of things and you sue me and win. Well, you ain't getting any money out of me, but you know what I do have?

I have property. You can ask the judge for an equitable lien. against my share of the property.

And if I don't ever pay you, you can actually foreclose on my share of the property. So now let's say Logan and Evan are brothers and this situation's happening, but Logan doesn't want to sue Evan. Well, there's another real estate operator that will buy your share of the property and litigate that claim to resolve.

Now, if that investor is going to do all this work and take on all this risk and hassle. He needs to make a lot of money, so he's going to have to buy Evan's share for a significant discount. You know what? Let me talk about what the average deal looks like.

I have deals that are literally worth $3 and $4 million, and I bought a share for $30,000, $50,000, a 50% claim. That's on the big end. And I got some little ones that are a couple hundred thousand dollars.

What I find, I've run several reports lately just kind of analyzing one of our business lines, the most productive business line. And the typical, the average sales price is about $200,000. And our average entry point is about 50,000. So we're spending 50,000 to buy 200,000 on our property.

And then once it's done, we dump it on the market and we'll net 100 to 150,000. That typical avatar of a deal is usually bought and resold within 120 to 150 days. That's our very average deal. Yeah.

But just so you know, like the people watching, we're not talking about ARV. No, no. As is.

As is value. We're not saying, oh, this is a $350,000 house could be. Kills me.

When people call in with a referral, they want to talk about a deal. All he does is, what's it worth? And they say, ARV is this. And I said, I didn't ask what the ARV is. What's it worth?

Well, once you fix it, I'm like, dude, stop it. I'm not a rehabber. Yeah. Right now, if you put it in the market, what's it worth today? I just had a conversation.

the other day because we've been looking for a house actually found one in spring branch we're going to move into oh cool in uh december nice house got a great deal on it but uh i was looking like i was like oh maybe i'll look at a sub two you know that'd be a great option i'm a investor you know so i'm looking at these sub two deals and this guy hey are you interested in a sub two in spring branch and i'm like absolutely what are the details yeah it's your neck of the woods yeah and he sends me this like list of like stuff is like oh the payment is you know 2,500 bucks um the ARV is I don't know where he said 350 or something like that and I was like what am I looking at like you send me numbers for a fix and flip but it's a sub two like and i asked him what what are the numbers send me the numbers and he's like well it is it's 2500 payment like this house this address and i'm like no no no sub two is not that like a sub two is me getting to do yeah i understand you need to make money that's fine i will pay you money that's fine what are the actual number what is my down payment what am i paying you what is the sales price what's the sales price where are we at well it's worth I don't care what it could be worth after it's fixed up. Why are you pushing this information? Let's stop playing hide the wiener. Give me a good. Well, I eventually found out that he's trying to sell me this $300,000 house for $320,000 that I could find on the market for $300,000.

So it's above market. That's why he was playing hide the wiener. He was playing above market, but at the same time, the interest rate was like 4.5%. So you're getting a better, I mean, you're basically buying a rate.

But it doesn't even make sense because you're above market. Right. Like, OK.

I literally asked him. I said, do you think I'm an idiot? Like, do you think I'm a real estate investor?

Because you found me through real estate, like through my content. Like, why would you think that I'm like this idiot that's going to buy something above market for a 3% lower rate? There's a lot of that, man. You don't have to have professional licenses or certifications to get into real estate investing. As a result, a lot of people take a run at it.

Yeah. I guess, I mean, I think there's probably a buyer out there for that, but it's not me. Yeah.

You know, like there's hedge funds. It's like, oh, okay, whatever. Maybe so.

Yeah. Easy deal to get done. It's not appreciated over the next 10 years. Like, we're fine.

We're good with that. That's what we're looking for. So I'll tell you what. So I pulled a report as we go through some management. I brought this up to you earlier.

Okay. I look at one of these business lines, and you have different things to look at. depending on what kind of business you're running.

So if you're running a manufacturing business that spits out 200 widgets a month, you're going to look at your fixed costs, your variable costs, you're going to look at cost of raw materials, you're going to look at overhead, you're going to analyze that business a certain way. So we've talked about so far is cost of the deal and then profit in the deal or how much you sell the deal for. But when you step back and look at this from an operation, it's a whole different perspective.

You're running a business, you're not looking at a deal per deal, although that matters at the deal level, at the ownership level, management level, something else mattered. So the things that matter are how much capital do you have contributed to this business? How much capital does it need to run? What's the cash conversion cycle like?

How much profit is this thing creating? Do you need to use credit lines or debt? How often do you turn your inventory?

So when you look at all this information, you can kind of decide how does the business work? Because like you and I were talking about, you might have an incredibly profitable business. Every deal makes a lot of profit, but if you're reinvesting and buying more deals than your cash converts, you could actually have a bank account with no money in it and all these new great deals and everything you sold, you made a ton of profit, but you have no cash.

So you have to be really careful. To the average guy listening to that, he's like, how is that possible? If you're doing one deal at a time, it's not possible. But as you start to get some inventory and a lot of things happening. We got to watch it.

Yeah. So I looked at this particular business line and I looked at totals for a minute. So I said, how much money do we have in inventory?

How many dollars are we spent to acquire this amount of inventory? What is that inventory worth in total? Not individually because you're looking at the business, not the deals. And I realized in this business we had 61 units in inventory. So it's 61 properties.

That's not 61 deals this year. That's 61 properties. We currently own.

And inventory, that's you? We own it. 100%?

No. We own some. We own anywhere from 1% to 100%.

OK. Some of these are actually on the market. They're listed for sale. Some of them are under contract, closed quickly.

Some of them we might only own 1% or 2% on the other. So just calculating this number real quick, because this is important. That number is that share of that property, not the entire property.

If you only own a quarter of it, you're not associating. No, yes. If we only own a quarter of it.

We own something greater than zero. Yep. We own a share of it.

We don't own it. We may not own it at all, but we own a share of that property. It's in our inventory. It's owned. So we own 61 units in that business line.

So then I said, okay, how much money have we spent to acquire what we own of those 61 units? So we spent $1.9 million to buy the 61 units. Now, some of those we own half, some of them we own 100%.

What we then did It's calculated how much money is left to spend to acquire the balance of those properties, or some of them we own all of it so we have no more balance remaining spend. They call that contingent liability or remaining spend. We did the math based on conversations we've had with people, delinquent taxes that are still owed, settlements that we know are coming, and it's about $1,040,000 remaining. So when you add those two together, total forecasted spend To own 100% of those 61 units is $2.9 million.

Okay. That's a lot of money. It's a lot of dollars, but when you break that down, it's cost forecast per unit.

It's only $48,000 per property. Pretty hard to get a property for $48,000 these days. Now, here's the game changer.

Revenue forecast per unit. So this is total forecasted spend per, or total. Divided by the 61 units.

Revenue, I'm sorry, revenue, not cost. If we sold all 61 of those units at market, what do we anticipate it sells for? Each one of those would sell for $194,000. So on average, we have $48,000 of spend per unit and $195,000 in revenue per unit.

Just to bring the math symbol, 50 to 200. Bam. That's basically $150,000 in profit per unit. 50,000 in cost.

Wow. So we're averaging right now buying property at 25 cents on the dollar. It's good. That's killer.

Now I look at it and say, okay, let's extrapolate that out across all units. What is the value of my inventory? How much money do I have in that inventory?

So the total forecasted spend is 2.9 million, which is $49,000 per unit. Total forecasted revenue is $11.8 million. So we basically have $12 million worth of inventory for what we think it's going to cost about $3 million to buy, to complete all the purchases of that inventory.

$3 million versus $12 million. A lot of margin there. And these numbers are including all your operating? This does not include overhead.

So outside, this is direct cost to the deal. Beyond that, I'll have overhead of like salaries, rent, I don't know. Salaries, rent, we have programs like Salesforce to pay a month for that, things like that.

But our overhead in that company, gosh, I have to look. I don't have it in this report. It's probably about $25,000, $30,000 a month.

So extrapolate that across the year, that's $300,000 or $400,000 in overhead for the year, maybe $500,000. That doesn't move the needle. Well, most of you guys are working on commission too.

Bingo. Which is the I mean employee costs can be ridiculous if you're just doing this on 40 hour a week. So here's what's wild.

It can help, but it can hurt you too. Well, in this business line, there are only four people working in it. The owner operator, which is my partner. Then we've got an administrative person who does pretty much all the paperwork. And it counts receivable, counts payable, stuff like that.

There's a salary for her. And there's a researcher. He's paid on a salary.

There's one commissioned salesperson and then an owner operator. There's only two people on commission there, but it's only four people in this whole business line. Really, the researcher's on... It was on salary.

Really? Yeah. Why would the researcher not be on commission? Well, think about it.

I mean, his job is to research. So, like, I mean, he's like a cashier. Like, that cashier goes and provides this service for this amount of pay each day. So, the researcher isn't paid on commission because the researcher can't influence a deal to get closed. He can't get on the phone and bring a deal across the finish line.

He's got to produce research. So, he's researching all day. Gotcha. So, we're getting ready to modify his pay a little bit.

There's going to be an incentive structure. It's just a profit sharing arrangement. So he'll get a little bonus for each deal closed as an incentive because we're a very profitable business and we want him to be happy. So we're going to give him bonuses. Yeah, that makes a little sense.

I would just think the reason I was like, wow, that's interesting because that is the choke point of your business. At the end of the day, if someone's terrible in research, we're going to get rid of them, get a better person. And if they're not intrinsically motivated to produce work.

then you don't have a place here. So you got to go. Yeah.

So we've got someone in that role in that company. That's really good. And he's very motivated and he loves doing this.

Maybe I'm wrong about that. Again, back to the thing is, is, is, is that the choke point you believe is your business? No, no, no.

The choke point in this business. I mean, I mean, to choke point to scale. No, you know, because our, we have skill in research, we have skill in salesmanship and we know exactly how to identify these.

Capital is not a constraint. And none of those other things are. The constraint is solving those issues and getting the asset to market.

So this is something that me and that particular owner operator are working through right now. We never intended for these distressed real estate businesses to get so big that we have 60 units in inventory at one time. Historically, we'd never have more than 20 or 30. This is huge.

But what happens is you get a lot of deals going. And you can slow down working on this one. This gets on the back burner. Our lawyer's slow on that one. This person went cold and we got to go send a private investigator out to go find them.

The deals get slow. And like a rehab, you can throw more people and more labor and get it done quicker. On these, sometimes you can't.

You have to file a lawsuit and you don't know how long it's going to take. Your choke point is the lawsuit. Right. So these are kind of unknowns in this part of this business right now.

So I'm going through with that owner-operator and looking at all these. files or projects and saying, what's the status of all these? Okay.

How can we fast track some of them? I have a couple of them where a person doesn't want to sell to us cheap. They don't want to give it away. So, and they owe us money because we've had all the taxes. So if they don't cut a deal with us, we're going to file a lawsuit to get the judge to give us an equitable lien against them.

Now that's the aggressive approach. That's going to maximize our profit. But on some of these, I know the person will sell. for 80 cents on the dollar, which is not a good business case to buy their share for 80 cents on the dollar.

But in this case, I say, you know what, for the greater good of the business, we already made a bunch of money on the first 75% of the equity. We're going to pay this last 25% his 80 cents on the dollar to get a deal done, to get the inventory to move. So it doesn't take nine more months to close this deal.

We've got to make some of those decisions to get the inventory turning as quickly as it can. Make 75% on three quarters of deals to make 20% on the last year. Right.

Yeah. It's a good business decision to turn that capital and shrink our backlog a little bit. Otherwise, if you're buying 10 a month, but you're only selling seven a month, you're adding three a month to your backlog over a year. That means you add 30 to your backlog.

That's not a good thing for a long time. You might be able to pull it off for a few months, but over the years that grows. Yeah.

Is there any, the opposite of true on that where you're thinking, okay, we'll just let them sit. They're appreciating assets, you know? You know, some of them, yeah. There are some of them that are entry points. So another thing you look at is your capital.

How much capital do I have in it? Some of these deals I have $150,000 in. I don't want to just let that marinate and just see what happens or wait for the tax man to sell it for the foreclosure.

Now, I have some deals that I only have $500,000 or $10,000 in. Those are such immaterial dollars that I will let those ride for years. I have a community property estate that I purchased 50% of a $5 million estate for $10,000. I can sit on that.

$10,000 doesn't move the needle. I can just let that thing ride, and we'll get there. It's real messy.

It needs a lot of work, like a lot of legal work. I'm not going to get into that right now. I'm going to solve some of these others. But because there's such a small amount of capital and I'll let it roll. But the ones that have a couple hundred grand in, I'm going to work those harder.

Yeah. Yeah. Makes sense. So when you look at this inventory report, total inventory is 11.8 million right now. Total cost forecast is 2.9 million.

That leaves 8.8 million in net profit. Take out half a million for operating expenses. It's 8.3 million.

Realistically, this should be turned in six months probably. If we don't run into any major snags. Yeah.

So those are the things that you'll look at when you look at this kind of business as it scales. You got 61 properties and inventory. How many are you picking up every month? I'm waiting for that report right now.

But I think right now we're averaging 12, which is we're becoming more skilled in that business at acquiring them and the employees in that businesses. In that business, the training is really doing well and they're picking it up a lot. But the problem is if you're only selling eight and you're picking up 12, you have a lot of backlog and you have a lot of capital sitting.

That's one of the things we're working on right now. We need to work on moving that backlog. So I actually would be in favor of don't buy anymore for five months, six months.

Only work on our backlog and clearing that out because I don't really want. We got $12 million worth of property. We're only in it for 3 million. Like, that's a good deal, but I don't want 40 more like that. I can hit the gas and do that any day of the week.

I want to work through this backlog and turn around that $8.8 million. I want to convert that into cash. Here's another thing that a lot of people don't think about.

You're running a manufacturing business and one of the owners gets hit by a bus. Bummer, but the other owner can run the place and keep spitting out widgets. This is unique. There's different ways to handle these projects, negotiate them. Me and that owner both have radically different ways of looking at things sometimes.

If I get hit by a bus next month, there are some problems that he just doesn't know how to solve. Conversely, if he gets hit by a bus, I don't have the bandwidth that he does. The dude is... bright, hardworking and he moves so much faster than me.

No, he's in finance here in operations. Like it'll take me so long to work through some of those issues. Yeah. So we both have to be on the same page and we, we want to keep that, that backlog shrunk because if either one of us gets hit by a bus, the other one's going to be left with a big pain in the butt to resolve. So those are some of the reasons you really want to keep a business like this right size and stay on top of it.

Whereas if it's a manufacturing facility, you just keep putting. electricity into that plant and putting raw materials in it spits out those widgets on the other side this isn't that yeah so you ever look into uh hiring somebody for that like a second logan in your business where you know my operating partners the guys that run those entities are as close in my mind as you'll get to me because we've worked elbow to elbow for some of us as long as eight years yeah so they know my ideology as much as anybody will But at the end of the day, I'm somewhat of a unique guy in that regard. Not many people are willing to do this and are good at it.

So that's still a challenge. I mean, I'm still a meaningful enough part of this organization that, you know, if I got hit by a bus tomorrow, the organization would be handicapped. Yeah. But somebody would be able to step up in some kind of way to kind of relieve the pressure. They would get through this.

They would continue to do business. But it wouldn't look the same way it does now because... Ultimately, when they run into a problem they can't solve, I'm the guy that's got to find the legal answer. And you would think they'd just hire a lawyer to do that. Lawyers are good at some stuff, but they're not good at the project management, the business case.

I drive things home, and those lawyers will figure out how to build the shit out of you and maybe not get a lot of progress in your business case. I found that with so much that I've done in my real estate business is that your title company or attorney Like They only can answer so much. If you really want to get a deal done, you have to answer those questions. You're the dude.

You're the special guy. This business isn't what it is without you. That's what makes your business special.

That's what makes you successful. Yeah. But I mean, seriously, you come to these times where you're like, all right, here's my question.

Answer it for me. And they're like, well, I mean, I mean, there's options. We can talk about options. No, no, no. Just tell me the thing.

What's the thing? Well. And then they never actually tell you the thing and you got to go find it yourself. Yeah.

Cause they don't know the thing. That's you. Yeah. Or they haven't thought of it.

And they're like, you presented it. I could work. It's like, why didn't you tell me that from the beginning? If that could work and you knew about it, you know, you got to go find it. It's, that's what I was like trying to tell people with business.

That's the difference in the value that they bring relative to you. That's why you make a premium above what they make might be like this. That's where your premium is justified and earned.

Yeah. Well, yeah. Yeah.

I never thought about it that way, but you're right. How many hours a week are you like invest into your business? You know, I work from about 7 or 8 a.m.

to usually 5, sometimes 6. At this point, I'm working an 8 to 5. So you're working 10 hours a day. You take weekends off? Yeah.

You know, when I first met my wife, I mean, I would work 12 hours a day, 15 hours a day, seven days a week without fail. But as the business grew, we hired more people, got more stability. We're now far more productive than we ever have been. But we have 20 people here.

So there's a lot of productivity that I don't have to be a part of. I can be over here writing an ebook or whatever, but the times I get involved, that's when I do something that other people typically just can't figure out. So I probably work 50% of the week doing something that the business needs. The other 50% of the week, I'm going to a podcast, working on an ebook, researching an idea that I think might be good for us, things like that. Yeah.

What's the biggest... I would say that it's finance. To answer the question before I ask the question, I think it's finance for you. But what is the biggest thing you've learned about, I guess, what's the right way to ask this?

What's the biggest piece of knowledge, the nuggets you've earned? I would say it's finance just from a business standpoint. You know, I've picked up a lot of the finance because I've had to.

You know. Loss management, risk management is far more important than I ever really gave it credit for in the beginning. A lot of people can come up with ways to earn money, but they don't really understand ways that you can lose money, you can make mistakes, things can fall apart along the way. And that's probably the biggest change in the last four or five years. A, how do you grow in a large way?

And then how do you manage down your risk? Yeah. Those are the two big focuses that I guess I have.

Yeah. Well, and I think probably comes back from. Your inheritance, a little bit of that, like losing the inheritance. Like, I don't know how much it was and you have to say, but like.

It was over a million bucks. Yeah. So like you, you see how fast you can spend. Yeah. And it goes a lot faster than you think it does.

Like, I mean, first time I ran into a big check was when we first closed on the ranch. You know, we got paid 300,000 foreclosing to buy a property. Had you ever had a check that big hit your bank account at one time?

Never. And, and I knew it would go fast because that, that was really. That money was really to pay off my debt at the time. I had $80,000 built up in debt. After spending my nest egg, I built up another $80,000.

So I had to pay that off. I had development costs in that. So I needed to clear a bunch of sand. I didn't have a cat at that time. I didn't have anything.

So I knew I was going to go through it quickly. And I knew there was probably about enough, but it would probably go away in the next year. But when you see that number dropping and you go from literally you get in your bank my situation. Got my bank out. The next day, $80,000 left because, I mean, I just had bad debts.

I mean not bad debts or good debts. They got me there, right? But just a lot of it. Just a lot of it. So paying back loans, personal loans, paying back people that believed in me, paying credit cards off.

Boom, $80,000. OK. Now I got 220 to figure out this ranch thing and you know start renting equipment i need to rent out a skid steer to start clearing well shit dude this takes forever by yourself what if i hire somebody and another skid steer to do more did that boom three months later there's 50 grand you know it's like we got a lot of stuff done but we don't have any sales coming yet still a lot of stuff and it's just like the amount of time that can go fast you really start identifying like you said Risk management.

In your mind at that point, had you become a business owner yet? Or are you still just trying to figure it out? I'm still not a business owner. I'm still trying to figure it out. Yeah.

OK. Like, I've had successes. But like you said, I know how to earn money.

I'm still trying to figure out how to replicate this thing. And that's what I see as a business. Business, to me, is having employees. It's a replicatable process to turn the wheel. Like, I am still very much self-employed.

Gotcha. the highest earner self-employment well you know that's a good place to be and a lot of people don't realize they say i'm a business owner well up until five years ago i thought i was a business owner but realized i wasn't i was just a high paid person today i'm a lot of a business owner you know there's parts that i choose to participate in uh but there's a big shift when you have people to help do the work and you've got a process and you've got just A thing that happens without your hand in it every day, that's when it does become more of a business. Yeah. I would say the closest thing to business I have right now is this content.

Right. Really? It's not producing income right now, but it's a business structure.

We got CRMs. We have the team Edwin's editing, you know, here shooting today. We have...

So that's what you need. The next thing is how do you get the revenue? Yep.

Well, that's a good point. So... Where do you anticipate revenue to come from this? Is it from the business that it brings by your notoriety? That's what I'm after.

I'm after not to be famous. I'm after to have people reach out to me to, hey, I got this land deal. You know, either I want to sell it to you.

I want to partner with you. It's my uncle and I want to, you know, sell or finance with you. Gotcha. Bring you in the door that way.

But also you have to kind of build. It's weird because. because content isn't just so straightforward to be saying, hey, I want to buy a ranch.

Sell me a ranch. Two views. Right.

You know what I mean? So you have to build it out in a way. So I'm still figuring that out where the income is coming from. I just know inherently having viewers on anything is what's the delayed I don't know if this is the right word, but delayed leverage. Oh, yeah.

So the more people you can contact, the more people are interested in you. I haven't had an ask in anything. I just know I'm waiting on that ask.

What is that ask going to be? I'm not sure yet. That would be fun to see how it develops.

producing content i was really like saying what it is i was doing just telling people because i wanted to get the word out and i thought if people start to know who i am they might call me to some deals so it was logan and lisette were buying vacant lots in crummy house on the east side and we were touring with our phones and taking pictures and videos And it was within about six months, people started to call. Got this deal down here on Crockett Street. It really started to then happen. But it took half a year for people to decide what they wanted to do with us, if that makes sense. Yeah.

Yeah. Well, I think the other aspect too, I didn't say this, but the other aspect to me, this whole content thing, I'm talking to people like you, talking to people like, you know, Jamil, I'm talking to people, Pace Morby. Every time I get to sit down and talk to people that are doing these huge things, I'm learning.

Oh my gosh. Like, hold on. Let me see that piece of paper that you were talking about.

Let me see how I can structure my business. They'll take your call. Yeah.

Now that you have a little relationship with them, you can get these guys on the phone. Yeah. That's pretty cool. Yeah.

Well, and like, I've, I've always just to get that, I've always just provided, you know, I've never asked for anything. Provide, provide, provide, you know, how can I provide you with value? Is this something like, can I give you this?

No, no. And that's really not interesting. Okay. Whatever. Still provided it.

Let me provide something else, you know? And that's the, I kind of start building those relationships. A lot of people, they meet somebody and you'll, you'll get to this point. I'm sure of it. You might still already be there is people just recognize you at the airport.

Or people, you know, have the opportunity to come into your office and they're just like, they're just a little starstruck, you know? I'm not sure if you're there yet. I'm a nobody, but a relative, nobody.

But around San Antonio, people pick me and my wife out a lot. Yeah. But how's your interactions?

Is it really awkward? My wife is real awkward with it. But when people come up, they're like, hey, Logan, I saw you on the internet. Or you always talk about the messy deals or something like that.

that, you know, the first time or two, I didn't know what to say, but I thought, hold on a minute. This is what I want. This was the whole purpose in getting recognized to be able to build a brand and a recognition.

And I thought, what should I do when that happens? I'm taking back. Okay. After that, let me talk to these people.

Hey, look, I see your stuff. Oh, great. Are you in real estate?

No, I'm not. But my cousin is, and we share it all the time. That's so awesome. If you come across one of these, let us know. We'd be happy to go speak at your.

event. We're happy to do a training at your cousin's brokerage for people. This is great. You got the message.

I'm glad you did. So I started talking to the people about what I wanted to talk about when they finally found us. Yeah. Yeah. Well, I guess it's interesting because I've, I think you'll get to a point though, where at least with the people that, you know, like pace and stuff like that, where you come to a large following, start getting people that just tense up.

They won't be like, Hey, I saw you that you're the messy guy. You become this guy. They're They're like, hey, man, I really like your hair.

And you're like, what? Like, what's going on? And people, I think they just run into that so much.

You got to give them something else. So like when I first meet these people in person, I almost act like I'm not interested into them. Like, I don't care who you are. You're just another guy in the room. I recognize you're another guy, right?

Yeah. Because you see yourself as another guy. I'm going to also see yourself as another guy.

Right. So funny story. I think I've told this before on podcasts. But.

but I'll tell it again, is I'm in first time meeting Ryan Pineda in his office. After he gets done talking, there's this line that's forming to meet him, to shake hands, take pictures, yada, yada, right? So I get in the line intentionally, but and there's also a food line that's wrapping around the front and going to get food.

So I'm sitting in this line, get up, keep going up, going up. Finally gets to me and he goes, hey, Evan, how you doing? And I look at him and I'm like what's happening right now and he's like well you want to talk ask question i'm like is this not the food line he's like what i wanted my burger not you dude and he was just so off-track by that he was like this guy's different like i don't know about this guy but i believe in his mind yeah a lot of times when i do this is like they just like oh this guy's different i don't know what it is about him but now i'm more interested in him than he is in me you know so i've built a lot of relationships like that you know so that's It's an interesting way.

I think if you can approach people like that, it's just to make, to show them that you're just another guy. Yeah, just slightly different. That's interesting. Yeah, I think when people see you every day or see you often, they start to form opinions about you, have some feeling of closeness because there's a lot about you that they start to know. It creates a semi-celebrity in a way.

And Brad Pitt's no different than you are. He might be a little bit better looking and maybe have a little bit more money, but he's a man. He puts his jeans on, left foot first, right foot second, ties his shoes, and goes into work. Yeah.

He just has a unique skill and you're in front of him a lot. So you start to think differently about him. I think that's all. I think, I think too, you, you get a lot of questions like, um, help me with this. Help me with that.

Help me with this. And I, I, I know I've done it with you too, but like I've. I'm always trying to be cautious of like asking for too much. Like at least let me pay you for this time or let me pay you for this because a lot of people just ask, ask, ask unintentionally.

They don't even know they're asking, but everybody's getting the same question. That's a fair thing. People are busy.

And just because you have a page on the internet where you talk about stuff doesn't mean they deserve part of your time. You know, Cody Sperber is one of the guys that's just a long-timer in the education business. And I had some questions.

And I'd been. Been to his podcast before, but I've never done anything for this guy. He knows who I am, but why would he want to waste two hours of time?

So I sent him a text message and said, hey, I need to buy an hour of your time. I'll Venmo you $1,000. I've got some questions about coaching stuff.

If you want to do it, let me know. And at the end of the day, $1,000 doesn't move the needle in my world. He's rich.

It doesn't move the needle in his world. But the fact that I'm willing to give him a grand for an hour or two makes him say, all right, this dude's not a shithead. Exactly. not taking advantage of me i'll give him some time yeah so i find doing things like that really does help and they have respect for you not because you're buying them but well you're never the problem is like the level i mean you might be close to his level and the amount of money you're making but like the the and i don't know who the guy is so anyways the uh the level disparity between you know if you need help and you're asking so and so for help that level you're never going to have enough money to to pay for his time.

Right. He knows it. But the fact of the matter, if he's willing to help and has that type of mentality, I just like helping people.

You're willing to give a lot of what you have for my time. Right. That's absolutely right.

Yeah. So I think that plays into it too. Like don't be like, hey, can I borrow your time for $10 because that's a lot for me?

Like, eh, it's not going to hurt you enough. Plus a guy like him, you, me, or whatever. We got a lot going on there. A lot of people on the internet watching you.

Yeah. And if we were to stop and take our time to give that much time to every single person out there, we would be giving away part of ourself. I've got to have my own privacy. I've got to have my own family.

I've got to have my own time and stuff. And the balance is you project all this on the internet, so you want to build something, but you've got to have a little bit of your own. So that kind of leads into another segment that we've been working on is directing the internet traffic into the channel it's supposed to be in, whether it's for a JV deal.

It's for advisory work. We try not to do paid advisory because we'd rather just do the deals. But we have some coaching stuff.

We've got online courses. There's just all these different things that we offer. And I don't know what it is that people want.

And it's very inefficient to like work your DMs, even with a, what do you call it? A VA. It's still not efficient. So we've started to add some automation into our direct messaging on the social platforms. So when someone reaches out, I don't know if this is personal.

I don't know if they want information about coaching, an event, advisory, whatever it is. So we've got some automation that will chime in and start to get them the right direction so that we can be more efficient for them and obviously for us. How profitable is the JVs with what you're doing?

We have millions of dollars in JVs right now. So would it be advantageous for you to take the front end, the four weeks you're saying, or the five weeks you're doing your coaching program, throw it on YouTube? so one of the problems you're going to run into is i can put that out there but you're going to be putting power in hands of people who don't have the right guidance and i suspect people are going to go out there and get in trouble there's a lot of good information I can put out there on YouTube and I'm happy to, but when you start getting into this granularity, they're also not getting the support that we then offer after that. Yeah. And man, they're going to get out there and start doing stuff that's going to cause problems for us.

Other people are going to be encumbering titles. They're going to get themselves into an expensive jam up. Well, they may go to the courthouse and buy a property and not understand that there's two years of more taxes you've got to pay.

Yeah, so I'm a little apprehensive to do it that way. Yeah. I don't want to get them I don't want to help create someone who's so dangerous they mess themselves up. Okay. Huh.

I wonder. The other thing, too, is what I've learned over this amount of time, I'm happy to help some amount, but if I'm going to give my intellect intellectual property that I spent 10 years to build and build a multi-million dollar profitable business there's some parts of it that I would like to charge for that I don't know that I want to just give for free yeah there's a lot of give I see that I understand that but somebody will be teaching it So like there's somebody else out there right now doing exactly the same thing you're doing that just doesn't have a coaching program. And they'll be teaching it for free. Yeah, be teaching it for free.

That's okay. They can do that, but I won't. It makes sense. At the same time, it's something you should question yourself.

Yeah. I think. But it's just my two cents. Interesting. I'm just some guy doing ranches.

So don't take it as two cents. Right. Oh, you know, there are a lot of ways to skin that cat. You know, at some point I might develop into a place where I say, I have nothing left I'm going to charge for except for our participation and I'll put everything out there. I don't know.

Yeah. I just think it would be so helpful for you as a business-wise. If JVs make a lot of money, put the information out there. Call me when you're ready.

Call me when you get the deal. Let me help you at that point. Right now as the JV deals come in, people come in once they've got a contract signed. So we've got something to work with on that's really good. And the next thing is when they're in our program, they get trained up so well that they do a great job of finding what it is we need.

So, you know, over the last couple of years, that coaching program has started to grow. We've started to organize it better and just really dial in on it. And we've been able to put together a model that's got reasonable overhead. Well pay to the people in my office that help provide.

And then it's also, in my opinion, for what you get, a very reasonable fee to the people out there. So it's working and we're evolving as it goes. At some point in 10 years, we might find how it changes.

I just don't know yet. Yeah. Tell us how people get a hold of you. Oh.

Facebook, TikTok, YouTube. Yeah, dump my name into Google. Logan Fulmer, F-U-L-L-M-E-R.

Dump it into Google, and that's going to put you at my website. There's some fun information about there. And then also Instagram.

I put a lot of my stuff on Instagram, and I've got some really good links and resources. is out there. Those are the two best places right now for me. Is there anything you're giving away for free?

I've got an ebook. I'm 30 pages in. I'm probably going to clip it at 50 pages. Okay. And I bet it's ready in three weeks.

There you go. this podcast probably won't be ready in three weeks. So maybe we call you back for the link. You know, we put a lot out on my social platform between me and some other folks in the office.

We just talk about the messy deals, what they look like, how you do them, what kind of money you make, how to find them. If you follow, we deliver a lot of that frequently. So it kind of helps you get in the, in the groove here.

Yeah. They've heard enough on this podcast to say, Hey, I want to jump in. I want to start doing this coaching program.

How do they get ahold of you? Just shoot us a DM. Yeah. On Instagram.

I've got a lot of good resources that will come at you quickly. And you can pick what's the right way to go. Cool.

Well, thanks for Logan. Thanks for coming on. No doubt. Appreciate it.

Enjoy it, Evan. Yeah. Thank you.