Transitioning To Virtual Flipping With Chad Weeden

FO 19 | Virtual Flipping

 

There is probably no better time to transition to virtual than now with the pandemic going on. However, for those who have done it long before, doing businesses virtually afforded what many couldn’t at a time where the hustle and bustle of a nine to five job was still the thing. For guest Chad Weeden of Fusion Real Estate Investment Group, being forced to transition his flipping business to a virtual model back in 2018 allowed him to spend more time with his family. In this episode, he sits down with Paul Lizell to talk about this very relevant topic today, giving some tips and tricks to make that move yourself and start fixing and flipping virtually in South Carolina and Denver. He shares some of the different tools that you can use out there to be able to do your business virtually and buy in any market that you wanted. Start working smarter and not harder. Follow Chad and Paul as they discuss more virtual flipping.

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Transitioning To Virtual Flipping With Chad Weeden

With me is a friend of mine, Chad Weeden. Chad and I are in a mastermind group together. We’ve gotten to know each other pretty well over the last couple of years. He has a similar investing model to what I have and that he’s doing it virtually. Chad, introduce yourself and tell us how you got started in real estate.

I appreciate you having me on. A quick story of how I got started, I was prior in the military and worked full-time for Sheriff’s office locally in Columbia, South Carolina. From there, I had a buddy talked me into the car business. I don’t know how he did it and I got into management. There was a finance manager for many years. I’d always wanted to chase this thing called real estate. I wished that many people that I meet probably are like, “I should have started this 10 to 15 years earlier.” I waited around. I’m going to do this and I’m going to do that. I never really did it. What got me started in real estate, I’ll never forget, I was working extra duty in a nice neighborhood in Columbia. They’re paying us as deputies to ride around and protect their community.

I was thinking, “What do these people do to live in this neighborhood?” That got me started on the real estate journey. This is something I feel like I can do. I waited and waited to pursue it and then I got in the car business working a lot of retail hours making good money. There’s only one thing you can chase in that business and that is money. You cannot chase time. We had our kids and we have an autistic little man and things started changing for me there on feeling like I needed to do something or find something where I was home more. Everybody wants to do that. It’s impossible to do, but I’ve been fortunate and have been able to find that. I’ve been able to do it solely because I was forced to have to do this virtually.

Which is a good thing, you already were set up to be able to do it virtually. You’re an expert in the PPC market as well, doing Pay-Per-Clicks. You understand and you’re good as far as tech. You understand all the different tools that can use out there and be able to do it virtually. You could buy in any market that you wanted to in this country. It just happened that you invest mostly in the Columbia, South Carolina area.

I was at working for the same business I was working for many years in the car business. It was an awesome company and awesome folks. I loved my job, but I hated being gone all the time working weekends and that kind of stuff. I took another finance job in Denver, Colorado. I got there and within three weeks I was like, “This place is a shit show.” I quit. I showed up back up home on Saturday and my wife was like, “Please tell me you did not quit your job. You’re three weeks in. We moved 1,600 miles away. We’ve upward at our lives.” I said, “I’m going to focus on flipping houses.” At that time, I was doing wholesaling. I had been doing some flips. When you’re sitting there and you’re having months making more than what you would have made in a single month sitting chained up in a desk, in an office, it’s hard not to kind of dream and think big.

It’s to hit on that real quick too. Nobody likes to sit there in cubicles. You’re wired a lot like I am too. We are not people that like to sit in an office all day and do that thing. We want to get out there and do things and multitask. You already were in real estate. It was a nice, easy, quick transition for you to go full-time, more or less.

My first couple of deals, how I got started with digital marketing and online marketing was in our previous business. I was good at that stuff and I knew about it. My first two deals came from bandit signs. That was labor-intensive. There’s got to be an easier way. That’s why I started doing pay-per-click. Once I started consistently getting deals from pay-per-clicks, I started ramping it up. That is ultimately how I’ve built my business. It has been solely on pay-per-click. We do a little bit of texting, but I hate it. It’s labor-intensive and some of our best deals have come from pay-per-click.

When I quit my job, I sat back and I started doing cold calling and all of that stuff. After about two months of doing that, I took a step back and I was like, “What do I want to do?” What I wanted to do was not a lot of work. To me, it was double down on that form of marketing because everything else from there is much automated until I need to see a profit or speak to somebody on the phone. I could do mail, but here’s the thing with mail. On my end, it’s labor-intensive. That’s a lot of phone calls coming in. It’s not where I wanted to be right then and there. I’ve built my business completely around not the labor-intensive side of the business. I work, but I’ve built it to where I can be anywhere and work from anywhere.

It’s working smarter, not harder. We want to maximize what we can get with the minimum amount of labor as possible. If something’s working that way, why change it? Why do the postcards? The postcards are labor-intensive. You’ve got to update your sheets, your notes, and everything like that all the time. PPC is probably the easiest way to do it and like you said, it’s texting. We know a lot of people that do the texting that people do pretty well with that, but that is super labor-intensive when you’re getting involved with that and all the details. I do think if I was going to incorporate anything else into my model, it would be the PPC. To me, that makes the most sense with what I do. I understand why you do that model. It makes so much sense.

It’s been working well for what I’ve been doing in my business and my market area. I decided to partner with some fellows in the North Carolina market. I handle all of the digital marketing and I’m a small minority partner in these deals. The awesome thing is I got a check or a wire and I did nothing. It’s what I built out. I copied that and took it to another market and we’re flipping there. The awesome thing about that is I’m handling the marketing part of it. I’m not chasing contractors and all of that stuff. I’ve got some residual income coming from that. I could build this out and do it in multiple markets. I’ve got a great team of contractors. I don’t have a lot of headaches. I have headaches, but it’s not a lot of massive headache. That’s where I’m at on the side. Do I want to go into other markets and find new contractors? That’s the whole reason why I didn’t start flipping in Denver. I felt like I’d be starting over in a sense having to find new subs, new contractors. That again is time.

Denver is a hyper-competitive market as well too. Probably going to have a labor shortage and contractor shortage. I’ll say you’re going to be chasing the deals, smaller margins, all those types of things in the South Carolina market.

The survival rate in the car business is very low. It chews people up and spits them out. Click To Tweet

The market is great there and your average profit per deal if you’re the one sourcing those deals directly, you can combine them and you can make some good money on those flips.

Columbia is a decent-sized market compared to a lot in there, but the margins on these deals are far better. If I were to go to Philadelphia and try to do the same thing I’m doing in the Philadelphia market, my margins are going to shrink. I’m going to be running into competition out the wazoo. It makes sense to go after these types of things in Denver. I agree with you. It’s a beautiful place to live. It’s a lot of tougher markets to invest in.

When you’re talking about private money and funding these deals, in that market you’re looking at $300,000, $400,000, $500,000, $600,000 on these projects. That’s a lot of project I can have going in South Carolina with that money. I’ve been fortunate to find folks in the Denver market that want to be involved in private lending, private investing, passively investing in real estate. It’s a lot easier to raise money there when you’re telling them, “You don’t have to have all your eggs in one basket on one house. We can start small. I can start with one and we can move to 2 or 3 at a time versus one.” That’s been a great thing for me there in that market. To live there, raise money, fund money there and virtually do it in a market is much less expensive.

You’re going to be able to do a lot more deals with it and your profit margins are going to be far better. We both want to work smarter, not harder, and the number of hours we want to work. I do coach. We were talking earlier about my son’s travel baseball. I coached him through the net and your son, he’s ten, he’s got autism. There’s a lot of time you’ve got to take. You want to enjoy all that time while you can and now is probably one of the most important times in his life for you to be able to do that. This whole lifestyle enables you to be able to do that and there’s no need for you to do more.

When I first started this real estate journey on the full-time aspect of it and letting go of the corporate world. I want to replace what I am making in that office, which is not a lot of flips a year. It’s simple to do if you know what you’re doing. Once I got to that point, I shifted my focus to chasing time and all of a sudden it was like deals are dropping in my lap. I’ve got more projects than what I wanted to do. I was eating dinner with a buddy. I was talking about pacing twenty houses, flips. I was like, “I’d like to get to 30.” He was like, “When you started this, you were wanting to do five a year.” I was like, “I’ve got systems and processes in place that I feel like I can get to that next step. I feel like somewhere around 30 for me and still keep it manageable and keep this small team.”

That’s key right there too because the smaller team you have lower expenses and lower overhead is, the less issues you have to worry about. Getting all these systems in place, we have systems we use and we have two different VAs we use. We have one on the buy side, one on the sales side there but otherwise, it’s myself. My wife does little with the business and my sales guy who sells all our properties and the two VAs. I love keeping a small that way and I don’t have any intention to grow big that way. I’ve always been able to do between 60 and say 130 deals per year comfortably. I’ve shrunk it down to about 60 to 80 deals a year because now I’m maximizing profit margins. I’m trying to hit the better deals. Forget those little ones who aren’t getting $2,000, $3,000, $4,000, $5,000, $7,000 in wholesale. I’m trying to get the ones who aren’t getting $10,000 to $20,000 consistently on that. That’s changed my model and given me even more time.

That’s why I’ve gotten away from wholesaling and it’s been this sexy thing. When I had to sit back, I started out wholesaling and I looked back at what I had done my first year, my second year on, into my third year. That’s why I stopped wholesaling is I’m sourcing all my deals directly. I can buy these and instead of making $7,000, $8,000, $9,000, $10,000 maybe a $15,000 assignment fee, I can flip the house and make usually no less than $30,000. I’m looking at $30,000, $35,000, $50,000, a couple of $60,000. I can do a lot less work and capitalize on managing something a few months longer or even some cases a few weeks longer than wholesaling it.

That’s why I’ve gotten away from wholesale because I’ve been able to build out my team of subs. By living in Denver and then deciding to invest in Columbia, South Carolina, it was a fast learning curve on you have to do it this way or you’re going to crash and burn and you’re going to be back in the finance office, in the car business. That’s the reason why I started flipping because not that I don’t work for $4,000 or $5,000, but I tell people all the time, “I don’t mess with the deal unless I’m making a minimum of $20,000.” That’s wholesaling and flipping. I’m not saying I don’t take a mover and shaker, but I don’t work for that. I’ll take a mover and shaker if it’s quick and easy, but I’m not working for less than $20,000.

It’s a time value of money. If you’re going to put your time and energy into it, you’ve got to get a certain return on it. It’s not worthwhile for you. Quick question on that. You’re out there in Denver, you go to South Carolina, how often do you check on the properties?

I go twice a month or try to go twice a month. That’s not the case every single month. We’ve got investor fuel and then the kids at school year got pushed back starting later. I think we’re going to take a road trip and go like Mount Rushmore or somewhere. I’m not sure that I’ll make it back. I’ve been here for two weeks or in the area for two weeks but trying to do twice a week. I keep a car in Charlotte. We live a few minutes from the airport in Denver. It’s a 2.5-hour flight going to Columbia or Charlotte and then it’s about three hours and fifteen minutes coming back.

I’ve set it up to be easy. I went through a period where I was not coming to South Carolina as much. That’s when I started having some issues with contractors and subs and things not getting done. I committed to going at least twice a month. Per month, I might be there for three days. I might be there seven days total, maybe ten every now and then. I also have family and friends and my whole life here. I’m still a reserved deputy with the Local Sheriff’s Office. I live between both states. I have the stuff to do. I probably don’t need to come back as much as I do. Those are the other reasons I come back.

FO 19 | Virtual Flipping

Virtual Flipping: If you want to get started right and fast in flipping, then find a coach, but don’t overpay them.

 

It keeps contractors honest if you check on stuff. It keeps them going because I know they can’t slack off. I’ve run the same thing. I buy properties up in the Pocono mountains here that are 2.5 hours away. A lot of times I slack on going up there and then I go up there and like, “What have you guys done? What have you done since the last time I was here?” I got a whole crew. This happened and unfortunately, you’ve probably had to deal with this in the past to contractors on drugs, all these kinds of things. I had to fire them. I had to get rid of him and bring a whole new crew on another crew that I’ve already used and have been using for years and years. They’re going to finish everything for me, but it sucks having to go through that and deal with it, but it’s part of the business.

It is part of the business. I’ve been fortunate I’ve got an awesome contractor. He’s a former Navy veteran. He’s got his crap together. I don’t have to worry about that, but subs and we’re going to be there this day. It drags three more days and the next thing you know you’re two weeks behind and then two weeks turns into 30 days. I’ve dealt with that and we still deal with that. There are times where flipping is a headache. I was in the car business. That is a grind. People coming into the car business, looking to make it a career. The survival rate in the car business is very low. It chews people up and spits them out. Being in the finance office, that’s the hottest place in a car dealership. It has the most pressure anywhere in the business. If I’m at a Rockies game and I have to deal with contractor issues, I’m not all that pissed off. If I’m on the phone or text or email, it’s not that bad.

I agree, plus you get systems and processes down. Your contractors know every door handle you want to use, every type of kitchen cabinet, what tile you use, what kind of flooring, what color paint. It becomes simple and it becomes easier for them to price it for you as well. They’re going in, they can almost do it on a square footage basis. They know that if it’s a 1,500 square foot house, it costs them $35 a square foot to be able to do everything for you. I’m throwing out a random number. It makes it a little bit easier for them to know what their costs are. They can average it. It makes everything simpler for you and then it’s the only things that come up or the unknown is maybe a foundation issue that they didn’t know about something behind the walls. Those are the things you’re more dealing with than crazy issues. Those are probably more of the type that you deal with as well.

I’ve got a hybrid situation going on with my acquisition manager. He’s also a project manager. I’m teaching him the project management stuff and in the process and in what we’re looking for. I’m doing a little bit of coaching and teaching on that end. I walked the property and of course, contractors say it’s done. It’s still a little ways off from being completely done. We get some stuff done. I noticed the floor was a little bit different from what we’ve been doing and from one of the vendors. I was like, “I like this floor.” “They were out of it. This is what we got.” You don’t want a contractor picking out your finishes, but on these houses that are like under $150,000, $200,000. It’s 1 of 3 floors. It’s pretty much the same paint color. All door handles, all doorknobs, anything gold is out of the house. Do we want to repaint cabinets or not repaint cabinets? That stuff’s all easy nowadays. I don’t have to do a lot of management on that. We’re all on the same page.

That helps makes everything much easier because that is truly the biggest part of the whole process. Spending time going through everything exactly how you want to have it done, but when they know and are on the same page, makes life a heck of a lot easier for you and your project manager.

The key to flipping is to find a good contractor. Somebody that you can trust and somebody that has good judgment. I can’t tell you how many times I’ve walked into a house and there’s a barn door somewhere or there’s something done with the fireplace that we didn’t talk about. It’s little extra things like, “I put the shiplap on here. I think it makes it look a little bit better.” Keep rolling. If there are these minor change orders and it’s not costing me any money or not a lot of money and it’s worthwhile, I don’t need to know about it. Do it.

Time is more valuable than a $100 change order. Your time is with your son. You don’t want to necessarily be interfered with a phone call on something stupid like that.

That’s all part of coaching your team. That’s what I try and tell folks that are rehabbing houses. It’s the house that I walked to. The closet doors, they were repainted. They looked like crap. These doors are $100. There are five of them in this house, just replace them.

It can look bright and new and shiny and much better.

First impressions type of stuff.

You walk up to that door, you want it to look good when you’re entering in there. That’s where usually in the house they make a decision, whether they’re leaning towards buying this house quickly when they enter the house. That is the key.

The key to flipping is to find a good contractor, somebody that you can trust and has good judgment. Click To Tweet

Replace the stuff. Let’s not make it over-complicated. I know I bark about budget a lot and that kind of stuff, but sometimes it’s okay to be over-budget. It’s not all the time, but sometimes.

As investors, we pack in a little margin there knowing that we’re usually going to be over-budget. There’s a certain amount. We take it unless it’s going far over-budget. We’re usually going to be okay with it there. Those are huge issues. Quick question for you. Someone is brand new looking to get into real estate investing. What direction would you point them in personally? What do you think would be the best way for them to start and learn?

I would say the first thing that somebody needs to do is you’ve got to find a podcast to get your mind wrapped around what is possible and what people are doing. Find something that people that you’re hearing of other people doing something. If you want to get started right and fast, then find a coach but don’t overpay a coach. Don’t go and pay somebody $70,000 to coach you. The third would be get plugged into a good REIA group. There are some good ones, there some bad ones, but get plugged into a good REIA group because it is all networking once you get started. You can be a newbie and you can JV a deal and find somebody that’s flipping houses or wholesaling. They can walk you through on the first couple.

There are many different ways to put it together. I feel like if you don’t have a vision on what you’re wanting to do, whatever that is, whether you want to be buying whole and you want to start with wholesaling, you want to start flipping or maybe you don’t know where to find the money. Those are all the same questions I had starting out. My number one thing was money. We had money. We could have bought our first couple of deals, but I wholesale because I didn’t want to tie up money. I learned that when you have good deals, money is easy to find once you have a good track record. Once you have social proof of, “I’m doing this, I’ve got these many flips, we’re on the number,” whatever we’re on. It’s much easier to raise the money. I would say find a good podcast, find a coach. Don’t overpay ridiculous stupid money for a coach, whatever that money is. Set some goals and start obtaining those goals. Small goals and then go from there.

I think that’s key. It’s great advice. As much as we like to grow out of REIAs, as we’ve become more seasoned investors, I still hit mine once a year. Just for the fact that one to make the contacts there. There are new people there, there are new vendors. One of the vendors I picked up a couple of years ago for kitchen cabinets and granite blows the doors off. It’s base grade Home Depot, lowest cabinet pricing, but all solid wood. Full extension drawers and half the price of granite I would pay at Home Depot. It’s unbelievable that source alone has been a huge let alone. Some of the other resources I found, private lenders that I’ve found in those REIAs. Many people are walking around there with private money. People that want to fund deals. They’re looking for deals to fund. They aren’t looking to get into hands-on. They don’t want to be there. They want to invest their money, park it, and make a good return on it.

Here’s the thing where people fail in trying to find funding. I feel like they don’t provide value. It’s like the deal is with finding money is not hitting folks up for money. It’s finding out what they’re looking to do. If you sit and talk to people and then you tell them your experience is flipping houses, they have a full-time job and they’ve got kids and they’re working 60 hours a week, it’s better to say, “Let me do the heavy lifting. Why don’t you passively invest? I know you’re wanting to flip houses.” Everyone wants to flip houses. The first thing is to figure out, where are they going to find the money or do they have the money? If they say they’re going to have to get a conventional loan or like, “I’m still going to fund it.”

A lot of times, people will tell you how they’re going to fund their deals. You can go in on the other side and say, “Have you ever flipped a house before?” “No.” Of course, they haven’t because they’re wanting to do that. You can give them all of your experiences. You don’t do this at the REIA meeting. You sit down with them in a private meeting somewhere and have Q&A to a degree. I’ve been successful in raising money that way. REIAs are a good thing and it’s a bad thing. For guys like us, I would say, if you’re not in a mastermind of some sort around people doing what you’re doing, when I’m bigger than what you’re doing, then you’re missing the boat.

Masterminds are the greatest resource I’ve ever known. I joined the first one back in the year 2014. It’s the greatest thing I ever did. I’ve been in the Investors in People since its inception, great group of people. People that do a lot of different things than I do, which I love. I try to institute some of their business models into mine and vice versa. It’s great for shared knowledge relationships. We all do a lot of business together. There are a lot of people who do deals together. A lot of people privately lend in that group. The mastermind is important. If you’re somebody reading and asking, “Should I join the mastermind or not?” We highly recommend you guys join one.

You’ve got to get around the people that are doing what you’re doing or have the same visions that you have. You’re not going to find that at REIA. I was picking up my wife one time. She was giving me a hard time. She’s like, “What are you paying for that investor for your mastermind?” I tell her because you have to travel and all that stuff. There is a substantial cost to it and I was like, “This deal over here wouldn’t have gotten done if I wouldn’t have been in that group. This one over here wouldn’t have gotten done. That one over there, I was putting this together listening to somebody else how they put that together.” It’s invaluable. I’ve made way more money than what I’ve spent.

I’ve had the same conversation with my wife. I show her, “Look how much I’ve made off this,” and now I’m in a couple of different masterminds. I’m explaining to her like, “This helped me make this and that,” and she’s like, “It sounds like a no-brainer.”

It is a no- brainer without a doubt.

FO 19 | Virtual Flipping

Virtual Flipping: Where people fail in trying to find funding is they don’t provide value. It’s like the deal is with finding money and not hitting folks up for money.

 

Chad, do you do any coaching at all for people?

I’ve had people ask me. The jury is out on that question and solely the reason being is I’m a perfectionist to a degree. I’m also one of those people that if I tell you I’m going to do something, I do it. The issue is I do not have a schedule. For example, one Tuesday morning, my little man was up early like 7:30. I said, “What do you want to do today, buddy?” “Go to Moab.” We packed an overnight bag to go to Moab for one night. I was there for two nights. I don’t have a schedule and that’s the sole reason why I’d have not pursued that because I feel like that’s going to be a time suck. I love helping people. I’m on the phone and take calls and messages all the time with folks, but to sit down and coach, I’m not saying I’m not interested. It’s just that it’s a level of commitment.

You’re not ready. Within our mastermind group, you’ve helped many people at the pay-per-clicks and you’ve helped so many other people in that group. As far as being able to setups, they understand and learn to see you kind of do stuff like that. That’s a whole separate animal there.

I’ve spent some time with them and help with them. I’m probably not going to have a bar tab when I’m in Fort Worth. That’s a plus. I like helping those guys and I want to help people that I like and that I assimilate with. I don’t know that I want to take on that. I don’t want to be a babysitter per se.

We do the coaching and it is a bit of a babysitting. No doubt about it. You got to schedule these calls and these different things and be ready and available if they call or text message. It is a time suck. it’s important that if you want to spend time with your son, make sure you’re focused in on that. Coaching always come late, you don’t have to do it now.

That’s what I was going to say. I’m early on in my investing career. I’ve not been doing it nearly as long as you. I feel like it’s the evolution of investing is at some point I probably will start taking on some coaching clients. What that looks like future wise. I know how, I know what to do, I put all the systems together. I can do all of the online marketing. I can handle all of that. It’s that one piece. It’s not even the work that’s involved in it. It’s the one piece of I have to commit to certain times and certain things. I’m non-committal in my mid-40s.

I’m with you on there and I keep the schedule similar to yours. I keep these wide open. The days end up evolving into what they do, especially with the local fix and flips I have going on here. I enjoy it and I still am able to do the coaching and work it around there. We do evening stuff with the coaching. It does take a lot of time. Chad, I appreciate you taking time with us and going over things. If somebody wants to reach out with you or have any questions on anything, what’s the best way for them to contact you?

The best way to get in touch with me is to find me on Facebook, go to my website, FusionRealEstateInvestmentGroup.com. You can find me on Instagram, @FlippingChad, email is FusionRealEstateInvestment@Gmail.com. You can find me there. I love to connect with like-minded folks, folks that are looking to grow their business, and maybe I can help you and maybe you can help me. That’s how I got started with doing AdWords and PPC for those folks in Raleigh. It was a coffee get together. It was one of those things where when you talk to people and there’s value on both sides, things get done.

That makes sense and you’re a natural giver. You give a lot. People gravitate to you for that too.

When you have good deals, money is easy to find once you have a good track record. Click To Tweet

I tell people all the time, “I’ll help you all day long and if I don’t know something, I can find it, but also tell you all the bad stuff.” I’m an open book. We had a business prior. We lost everything. I know there are a lot of things that I’ll tell people that in depth of the good, the bad, the ugly. A lot of people don’t like to hear the ugly, but it’s our life.

In your last presentation, you let everything out there. It’s awesome. I love that. It’s the best. It’s everything we can all relate to because we’re all going through these things. Everybody has their trials and tribulations. I appreciate it. Chad, I appreciate your time. I’ll catch up with you virtually at the mastermind meeting and then live in November. We’ll catch up there.

I’ll see you. Then we’re talking about trying to put a backpacking trip together sometime or something.

That would be fun. Hit me up on that. I appreciate that.

See you.

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About Chad Weeden

FO 19 | Virtual FlippingChad Weeden is a military veteran, law enforcement officer and a former car business finance manager turned full-time real estate investor. He moved to Denver, CO on a whim in July of 2018 and was forced to transition his flipping business to a virtual model. He primarily focuses on fix and flips and has a few cash flowing properties. Chad has also become a master at structuring creative finance deals. He talks about why he decided to continue to invest in a market that’s 1600 miles away and explains how he’s found success by shifting his focus to chasing time. He also discusses how he has focused solely on digital marketing vs other forms of marketing that tend to become time and labor intensive. More than being an investor, Chad is focused on spending as much time as possible with his wife
and kids. Chad further shares how he manages running a successful real estate investing businesses while he and his wife Wendy navigate being a special needs parents to their 10 year old autistic son.